October 2019 – The Green New Deal

Costing the G vs. the ND

A couple of posts previously I tried to ballpark the costs of the entire Green New Deal.

I wrote, ” The (rough) annual cost estimates of implementing the Green New Deal to range from $2.65 trillion to $5.88 trillion. Almost all of the variance is due to the differences in estimates for healthcare.”

Today I would like to split out the costs, showing what the annual costs are for the environmental portion vs. the economic part. I’ll do it with the high end estimate of $5.88 trillion.

Medicare for All: $3.2 trillion

Affordable, safe, and adequate housing (solving homelessness): $9.3 billion

Upgrading schools and public housing: $6.8 billion

Economic security (universal basic income to those earning less than $61K/year): $768 billion

Providing resources, training, and high-quality education, including higher education, to all people of the United States: $32.5 billion

Total annual spend on non-environmental aspects of Green New Deal, high range estimates: $4.016 trillion.

68% of the annual cost of the Green New Deal is non-environmental.

A Climate Survey! (Not mine…)

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Rough Look at Overall Costs of the Green New Deal

Since Alexandria Ocasio-Cortez and Ed Markey introduced their resolution for a Green New Deal, a number of people and institutions have tried to put a price tag on it.

The prices they come up with seem to reflect their political orientation more than an objective evaluation of the costs, with conservatives who would naturally oppose the Green New Deal saying it would cost a lot, while progressive Democrats who favor some or all of the elements of a Green New Deal insisting it would not cost very much at all. Before we provide our own estimates, here are some of the costs put forward by others.

Let’s start at the high end. Mises Wire, named in honor of the Austrian School economist Ludwig von Mises, says it would cost $93 trillion[1]—and they say that their estimate is conservative. The estimate relies on other work done by the American Action Forum (whose founder actually estimates a range from $52 trillion to $93 trillion[2]) and does not analyze the whole of the Green New Deal in great detail—from the article accompanying the estimate it would seem they threw up their hands in despair after arriving at such a high figure. They do note that some elements of the Green New Deal are redundant—for example, if the energy grid is powered by 100% renewable sources, why does the Green New Deal call for improving the energy efficiency of every building in America? That’s potentially helpful criticism. But in other places, they estimate a range of costs for elements of the Green New Deal and present the highest end of the range for each.

Defenders of the Green New Deal have been much fuzzier about costs, with Congresswoman Ocasio-Cortez merely remarking that it would probably cost at least $10 trillion[3], with other vague estimates from various sources at ‘around $2 trillion.’

Somewhere in between lies the real number—or numbers, as many elements must be estimated within a range.