It’s green, it’s new and it’s a deal of some kind.
That is as much as many Americans know about the plan by some Democrats, led by New York Congresswoman Alexandra Ocasio-Cortez, to make the country carbon neutral.
The confusion is reflected in opinion polls: while one shows that even a majority of Republicans back the idea, another finds that 82% of the American public don’t know what a Green New Deal actually contains.
CEOs and CPOs of companies that have any link of their supply chain in America cannot afford to remain in the dark. Although it is unlikely that Ocasio-Cortez’s entire plan will become law, it is influencing the policy agenda and encouraging carbon reduction initiatives in states such as California, Hawaii, Illinois, Minnesota, New Mexico and New York.
So what is this new deal exactly and what is green about it? The central aim is to turn the US into a carbon-neutral economy within 10 years, powered entirely by renewable energy. As ambitions go, it is even more audacious than John F. Kennedy’s pledge to put a man on the moon by the end of the 1960s.
At the moment, most of America’s energy comes from natural gas (35.1%) and coal (27.4%), with renewables supplying just 17.1% (wind power accounts for 6.9%). Investment in renewables is growing but, as Ocasio-Cortez notes in her Congressional resolution on the Green New Deal, not quickly enough for the sector to supply all of America’s energy needs by 2030.
The only way for America to expand its renewable energy sector by a factor of 10, she argues, is for the government to step in, take a long-term view and invest, as it did in 2009 when the Department of Energy (DoE) gave electric carmaker Tesla a low-interest loan of $465m. (This was repaid four years later.)
That loan was made when George W. Bush was president and Samuel Bodman, a venture capitalist with chemical energy expertise, was running the DoE. Ten years later, Trump is president and the energy secretary is Rick Perry, a former governor of Texas, who once declared that he wanted to abolish the DoE and is skeptical about the scientific case for climate change.
In his book The Fifth Risk, Michael Lewis suggests that Trump has effectively outsourced energy policy to the private sector. Trump’s transition team for the DoE was led by Thomas Pyle, president of the American Energy Alliance, which Lewis describes as a “propaganda machine funded with millions of dollars from Exxon Mobil and Koch Industries”. Pyle met the outgoing energy secretary once, for an hour, and seemed most interested in finding out which department staff had had anything to do with climate-change research.
Trump’s energy policy seems to be based upon a mysterious, yet deep-rooted, hatred of wind power, recently telling a Republican conference that turbines kill birds, destroy property values and are a public health risk. (“They say the noise causes cancer – ‘Rrrrr, rrrr’ – you know the thing that make the – it’s so noisy.”)
Such remarks have prompted Ocasio-Cortez and her allies to make their case now, with an eye on the 2020 elections. Their deal has caused a firestorm on social media and surveys suggest that many Democrats now see the environment as the most urgent political issue.
The most formidable obstacle facing Ocasio-Cortez is that the deal isn’t just green. Some of the proposals – universal healthcare, income support, and jobs for all – will strike many right-wing Republicans as downright red. Ocasio-Cortez does not shirk from this – like presidential hopeful Bernie Sanders she describes herself as a democratic socialist.
That said, given the partisan intensity of the debate over Obamacare, which was affordable but not universal, it is hard to see such policies becoming law. Lee E. Ohanian, an economist at the University of California, Los Angeles, has dismissed the Green New Deal as a “pipedream, not a serious policy proposal”, warning that it would represent “the largest peacetime shift to a socialistic economy – and the largest drop in individual freedom – that any of us have seen in our lifetimes.”
What is more likely to happen is that individual states, especially those where Democrats control governorships and legislatures, adopt parts of the deal. California, Hawaii and Washington (the state) have already voted to decarbonise their electricity supply. Colorado has agreed carbon reduction targets and Nevada has outlined non-binding goals. Clean energy bills are being debated in Illinois, Maine, Minnesota and New York. More than 100 cities – including Chicago and Washington DC – have adopted similar proposals.
Such moves have already provoked a backlash. In North Carolina, one Republican state senator has introduced a Bill to outlaw wind turbines within 100 miles of the coast and near military bases, claiming they are a threat to national security.
Despite Ocasio-Cortez’s caution, the private sector is playing its part, albeit spurred by government incentives. Wind power supplies 6m homes in Texas, with more than 24 gigawatts already installed and a further seven gigawatts are in development. Ironically, the Lone Star state’s wind power boom began in the early 2000s when Rick Perry was governor. Yet some Republican leaders in Texas want to cut tax incentives to wind energy. This is an unlikely vote-winner. Wind power projects are the only economic development some rural parts of Texas have had in decades. Wind was also, according to a Bloomberg study, the cheapest global source of energy in 2018.
The gazillion dollar question for Ocasio-Cortez and her allies is: how is America to pay for the Green New Deal? Her argument is that if the federal government can spend billions on military equipment – and billions more on tax refunds – why can’t it invest in the Green New Deal?
Saikat Chakrabati, Ocasio-Cortez’s chief of staff, argues: “Big things will happen. The two options are: either we’re going to intentionally do the things we want, or big things we don’t want will happen to us.”
In politics, life is never that simple. Franklin D. Roosevelt had a mandate to create the original New Deal in 1932 because the vast majority of Americans could see, with their own eyes, that the nation was in a crisis. There is no such unanimity about the impact of climate change on America.
That doesn’t mean CEOs and CPOs should be complacent. A coalition of groups – including some religious leaders – is targeting individual companies. Even in Idaho, where politicos are lukewarm about carbon reduction, the town of Boise – and the Idaho Power energy utility – have committed to 100% renewable energy.
The bottom line is: you might be prepared to defend your carbon footprint against environmental activists but do you really want to argue with God’s representatives on earth?
☛ Want to stay up to date with the news? Sign up to our daily bulletin.