Environment – The Green New Deal

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.’

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.

The GND and Solar From The Rest Of Us

We talked earlier about the potential of solar–with 70 million single family homes in this country, that’s a lot of roof space. Of course, there are a lot of homes in regions that are not best fits for solar, but the idea of 70 million rooftops is enough to spark our interest.

Remember that our interest is sparked by potential ways of reducing emissions without much in the way of government investment. This is based on the idea that the current administration is not committed to a Green New Deal, and it’s not guaranteed that the next one will be either.

The Green New Deal and 100% clean, renewable and zero-emission energy sources. Gulp. Phase 1–2021-2030

We have written posts that were shorter than the title of this one. Sorry.

We talked about America’s energy consumption in this earlier post. The U.S. currently consumes about 100 quadrillion British Thermal Units a year. This is not expected to change much over the next few decades. Which is easy for calculations, being one hundred. Of that 100 ‘quads,’ at the moment about 11% is renewable (but this includes hydro-electric power) and a further 9% is nuclear. The rest of our fuel portfolio consists of oil (37% of the total), natural gas (29%) and coal (14%).

It’s a lot of energy–about 15% of all the world’s energy consumption happens here.

Of our current renewable energy, a quarter of it is provided by hydroelectric facilities (25%), 21% by wind, 6% by solar and a whopping 45% by the various types of biomass–waste, biofuels and burning wood.

It’s a tall order–hence the use of the word ‘gulp’ in the title of this post.

Residential Solar Power And The Green New Deal

20% of all US energy consumption happens at home. While we will need laws and politics (and lots of both) to deal with the other 80%, we as individual can make a real difference. And really, nobody is going to take care of that 20% for us. If it’s going to get done, we’re going to have to do it.

The idyllic solution of course would be solar panels on every roof with a tracking mount to follow the sun, feeding not only the immediate electricity needs of the house below it, but charging the standalone battery that will be used to recharge the electric car when it gets home. And there are a lot of homes that could do this. But not enough, sadly.

Access to Nature and the Green New Deal

There are 59 national parks in the U.S. and 8,565 state parks and a lot of local and city parks. The map looks full:

So at first glance, you might wonder why access to nature is part of the Green New Deal. And once again, the answer is equal parts poverty and inequality.

Air Quality

One of the goals of the Green New Deal is to provide clean air to all Americans.

Here is a picture of what air quality in America looks like on April 27, 2019:

Green is good, yellow bad, red worse and purple just horrible. The picture changes from day to day, of course, but it’s clear that most Americans do enjoy clean air on most days of the year. But as with water pollution (and almost everything else that is bad in our land), air pollution is tougher on the poor and minorities. Not only are they exposed to more of it, they have fewer resources to deal with it.

Is The 12 Year Target For Zero Emissions A Hard Target?

Let’s talk about time. The Intergovernmental Panel on Climate Change (IPCC) wrote a special report on what will happen if global average temperature rises above 1.5C. They say that if we don’t get to zero emissions by 2050… well let’s let them say it and let’s start with the good-ish news:

Clean Water, Air, Healthy and Affordable Food, and Nature

In a nod to the environmental movement of the 70s, the Green New Deal has as a goal the delivery of clean water and air, healthy and affordable food and what I presume to mean access to nature.

Again, due to the length of the posts, we will have to deal with these one at a time. Today we’ll talk about clean water.

The Environmental Protection Agency is budgeted at about $8.9 billion a year at present. About 52% of that goes to improving water quality. About half that amount (45%) is in the form of grants to cities and states for specific projects. It could be more.

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.

Moonshot or Pyramids?

Should the U.S. decide to pursue the Green New Deal, there are different approaches to take–but although one is probably optimal, we can expect to pursue two parallel tracks at different rates of speed.

One is brute force–we mandate (and probably finance) the environmental aspects of the GND, build out the needed solar and wind power generation, require a changeover to an electric fleet, and use regulation and legislation to push people into desired behaviors. We liken this to ancient Egyptians building the pyramids with slave labor, but then we’re harsh critics at times.