Appraising the Green New Deal

The purpose of this blog is not to praise or bury the Green New Deal. We have tried here to show how it could work in practice and provide order of magnitude costs (in practice, shooting for the right number of zeros) for the listed elements of it.

Unsurprisingly, the process of this analysis has left us with some opinions, which we share in this post.

As currently described, the GND is imprecise enough to force us into giving ranges of the costs rather than precise estimates. The fact that the GND does not prioritize specific elements makes it impossible to determine any level of path dependency. To take just one example, if the government takes steps to spur infrastructure improvements and a build-out of green energy–solar panels, charging stations, domestic electric vehicles, etc.–prior to implementing a universal basic income that kicks in at $61K household income, the resulting increased employment will undoubtedly reduce the number of households receiving the UBI. There are many other aspects of the initiative that have path dependency impacts.

The vagueness of the various descriptions of the Green New Deal does more than make life difficult for analysts. It allows for suggestions for improving and listing our own priorities.

If we take as a given that we share the goals of the Green New Deal–an uplifting of living standards for the poorer fifth of Americans and an overall quality of life matching or exceeding those found in Northern Europe, as well as a dramatic decrease in our impact on the environment and our contributions to climate change in a short time frame, then perhaps our suggested changes can be welcomed as well as challenged.

To start, let’s divide the Green New Deal into the obvious two categories–economic uplift and environmental remediation.

We feel strongly that the economic part of the Green New Deal needs to be the top priority. The poor in America need help now, and some of what we do to help them can also help the environment. The converse is not true. Much of what we do to address our environmental deficit of care will divert resources from helping the disadvantaged unless great care is used in implementation. Furthermore, a number of high profile economic elements of the GND are actually inexpensive–$50 billion a year (which we guess is now considered chump change) would address homelessness, housing upgrades, education for all and access to healthy food and nature. And there are existing programs that could take that money from day one and use it effectively.

Providing jobs for all Americans, perhaps through a federal works program, can be directed at the poor and those jobs can include installation of solar panels and charging stations and retrofitting or manufacturing electric vehicles. The training and education needed can be considered as higher education credits leading to re-entry into tertiary (and for some, secondary) education. The poor can be employed in building or renovating social housing, or in environmental remediation of soil and water.

Addressing environmental concerns needs to first consider the elephant in the room. The Green New Deal has no provision for using nuclear power to reduce emissions. The hostility of environmentalists towards nuclear power is as old as nuclear power itself and much of it has been validated by negligent or criminal behavior at certain sites. But the technology of providing nuclear power has advanced considerably and adopting best of breed modular reactors, perhaps sited on federally owned land with federal guarantees for liability, would ease the burden on other strategies to arrive at net zero emissions.

Much of the environmental agenda put forward by the Green New Deal can be achieved by getting out of the way of current trends. Solar power has historically grown at a rate sufficient to meet the needs of the GND, although practically speaking we should shoot for 30% of electricity provision from solar and wind. Continuing policies put in place during the Obama administration would actually get us there. Removing some of the bureaucratic holdups for permitting and licensing would speed it up. Removing tariffs on international providers of solar panels would decrease costs. This is all very low-hanging fruit.

Encouraging the take-up of electric vehicles would again be easy. Provide incentives for both consumers and manufacturers–carrots for electric vehicles and sticks to discourage gas or diesel vehicles. Remember that half the electric cars in the U.S. were purchased in the past two years. That’s a good beginning to build on.

Reversing some of the current administration’s efforts to revive coal would help. Encouraging the decommissioning of the dwindling number of coal-fired energy plants would help more.

These ‘nudge’ type initiatives could be implemented quickly and inexpensively, relative to the overall costs of the entire GND. They would have a noticeable impact and hopefully would pave the way for the more ambitious elements later on.

Imposing a carbon tax at a low level (perhaps $20 per ton) and rebating it to consumers would influence behavior at the margins. Evaluating the correct level of tax every ten years, based on climate and economic metrics, would help shape behaviors while financing parts of the GND. Adding an increased royalty on fuel production and imports and instituting a sovereign wealth fund can provide a capital base for financing the infrastructure of the future.

Or, as they put it back in the halcyon days when Silicon Valley actually was innovative and fun, ‘Start small. Succeed quickly. Scale fast.’

Electric Cars–A Foundation Stone For The GND

There are at present 276 million registered vehicles in the United States. About 1 million of them are electric.

If the Green New Deal is to have any chance at achieving the Green part of the New Deal, almost all of this vast fleet of cars, pickups and SUVs will have to be electric by 2030. Is it possible? Yes. Will it be easy? No.

Let’s start with the glass half full. 2018 saw a phenomenal jump in the sales of electric cars–an 81% increase over 2017, which was also a banner year. Put another way, half of all the electric cars in America were sold in the past two years.

To get to 276 million electric vehicles, sales would have to grow at a phenomenal rate–but less than the 81% recorded in 2018. We’d ‘only’ need sales to grow at a 60% rate every year for 12 years. But things are not that simple, obviously.

Continue reading “Electric Cars–A Foundation Stone For The GND”