Tuesday, October 21, 2008

The Green New Deal

All but the most determined nay-sayers (who, in another age similarly insisted that the Earth was flat) agree that the global environment is under stress, largely man-made, and getting worse. Addressing this reality is the most pressing issue of our times. So what's getting in the way? Would you believe fear of strangling the economy?

There's any number of people claiming that the goal of reviving the economy (much less economic growth) and the goal of addressing environmental needs are mutually exclusive--that you can't do both:

So that's it, then, choruses the commentariat. Collapsing confidence, crashing stock markets and credit-starved banks spell doom not just for the economy, but for environmental concerns. Saving the planet may be all very well in the good times, but is an unaffordable luxury when things turn bad. The argument is pervasive, persuasive and gaining ground. Even some environmentalists half-accept it, believing they should mute their message.

However, the state of the economy is not a reason to scale back investment in the green economy. Quite the contrary as the United Nations Environment Programme (UNEP) will advocate Wednesday:

Its multi-million-dollar Green Economy Initiative – already being funded by the German and Norwegian governments and the European Commission – aims to convince the world, that, far from restricting growth, tackling the growing planetary environmental crisis would accelerate it. UNEP plans to "make and communicate a strong and convincing economic case". As The Independent on Sunday exclusively reported last week, it envisages a Green New Deal to create jobs, revive the international economy, slash poverty and head off environmental disaster.

The Stern Report also makes a convincing case with respect to peak oil and the relative costs of migrating from the fossil economy.

Other examples supporting this thesis aren't hard to find.

For example, California'a far-sighted emphasis on energy efficiency hasn't been good just for the environment, it's also been good for the economy. According to a study done by David Roland-Holst, an economist at UC Berkeley's Center for Energy, Resources and Economic Sustainability, state policies created nearly 1.5 million jobs from 1977 to 2007, while eliminating fewer than 25,000. The study, released Monday, also found that net growth in total compensation paid due to this policy was $43B over the same period. The study goes on to estimate an increase in household wealth of $48B and the creation of more than 400,000 new jobs over the next 12 years.

Germany has seen the percentage of its electrical generation from renewable sources in the last 10 years nearly triple to more than 14%. The renewable industry has also created 250,000 jobs.

Even China, despite building coal-fired electrical generation at an astonishing pace, is more green-focused than most people think:

In China 600,000 people are employed in making and installing solar water heaters: they are now used in one in 10 of the nation's homes – a proportion forecast to rise to one in two by 2030. Chinese wind-energy capacity has doubled in each of the past two years, while its production of solar cells soared from virtually nothing in 2005 to the biggest in the world last year.

Politicians are fond of talking about how their policies will create jobs, but from where will those jobs come in the next decade? What will be the cost if government is the driver in creating such jobs?

Derrick Z. Jackson, writing in the Boston Globe describes what the Green New Deal might entail:

There have been several attempts to project what this would look like nationally. The US Conference of Mayors said an economy that shifts to generating 40 percent of its electricity from wind, solar, biomass, and other fuels will generate 4.2 million green jobs by 2038. The Apollo Alliance coalition of environmentalists and business leaders says a $500 billion investment over the next 10 years will create 5 million green-collar jobs. The alliance says the $50-billion-a-year average "is a smaller share of our gross domestic product than what we spent on the original Apollo program" to go to the moon. "It is one-third the amount that we spend each year in Iraq."At the University of Massachusetts-Amherst, the Political Economy Research Institute is a bit more conservative, but still estimates an impressive net increase of 2.5 million green jobs over the next 10 years for an investment of $150 billion a year. Institute co-director Robert Pollin testified last month before the House select committee on energy independence and global warming - chaired by Ed Markey of Massachusetts - that the jobs could be created with the same kind of cash that President Bush plowed into those $600 stimulus checks (remember them?)."It is actually very simple to think about," Pollin said by telephone yesterday. "For the most part we are talking about construction and manufacturing, retrofitting buildings, improving the electrical grid, boosting public transportation. Then, once you get the energy savings, then there is a lot of money around to spend on other things, instead of spending more on importing oil from Saudi Arabia. The money can go elsewhere in the American economy."Democratic presidential nominee Barack Obama has made a pledge of 5 million green jobs a staple of his stump speech, calling them "jobs that pay well and can't be outsourced; jobs building solar panels and wind turbines and fuel-efficient cars; jobs that will help us end our dependence on oil from Middle East dictators." What is unclear to researchers like Pollin is how Obama will get there if he is elected. Obama's pledge to spend $15 billion a year to create such jobs is well short of the annual investment estimates of Pollin and the Apollo Alliance. Also unclear is how Obama's pledge will weather the economic storms waiting for him."When I was testifying, someone suggested we can't do this because we're in a financial crisis," Pollin said. "We have to do this precisely because we're in a financial crisis. I just watched Ben Bernanke (the Federal Reserve chairman) call for another stimulus package. What we ought to be doing is rethinking regulating the financial market to channel credit into useful investments instead of useless, destructive speculations. Putting money into green jobs is useful in many ways."The investments can come none too soon as America has already fallen, as Pollin put it, "dramatically behind" Europe and Asia in the wind and solar manufacturing sector. The Globe last week reported that wind turbine projects are being delayed for up to two years because the parts cannot be made fast enough, hurting one of the few big American players in this arena, General Electric. "You can't retrofit a building in Amherst in China," Pollin said. "You can't rebuild a subway system from abroad. The technology is there. We know we're going to get a fast payoff if we get going."

You know when Thomas Friedman is thumping the tub, it's truly gone mainstream. Not everyone agrees, but both support and opposition has transcended the tired politics of left vs. right, and when both Barrack Obama and John McCain are trying to outdo each other on their alternative energy credentials, you know change in national policy might really be coming at last.

The prospect is truly exciting in part because it represents a true break from decades of fossil-centric policy. Thus:

If all this has been happening under the old, now failing, economic regime, which has not been at all favourable to green growth, what might happen if the world decided to promote the new green economy? For a start there would be many more jobs. Renewable energy, says Professor Daniel Kammen of the University of California, Berkeley, "has been shown to generate three to five times more jobs per dollar, or yuan, invested, than comparable investments in fossil fuels". Similarly, recycling creates 10 times as much employment as dumping rubbish in landfills, while the International Labour Organisation reports that worldwide move to energy-efficient buildings could create "tens of millions of new jobs".

Worldwide, renewables now employ 2.3 million people, a figure expected almost to quadruple by 2030. How much of that will be in the United States? Other countries are making big investments and bold plays.

Will we lead or cede?
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