Green New Deal: Saving America or turning it socialist?

The plan calls for a vast remaking of the US economy. In just 10 years, it envisions a phaseout of all greenhouse gas emissions from power plants. Ditto for cars on the road. Meanwhile, massive spending on high-speed rail systems would coax long-distance travelers off airplanes and onto trains.

Oh, and while all that is slashing greenhouse gas emissions to zero, this legislation would also seek to fix a host of social ills, with the promise of things like jobs and health care for all. Absent from the legislation are references to things like incentives, markets, or private-sector innovation.

Welcome to the Green New Deal, which depending on your view looks like either the salvation or bane of the US economy.

Given its sweep, it’s not surprising that critics are blasting the plan as “socialist.” The label may not be fair in a literal sense, but it points to a vital question of how to best care for both the planet and its people at a time when climate change has rising urgency. Is the answer more capitalism or less? 

The Green New Deal is drawing attention in part because the polarized responses to it are pushing that discussion to the fore. 

“It seems like a big-government kind of approach,” says Yoram Bauman, a Utah-based economist who has been active in the politics of climate change. But to call it “socialism,” he adds, “is up to the eye of the beholder.”

For his part, he says addressing climate change is so urgent, and the difficulty of passing national legislation on the issue so great, that he welcomes any and all efforts to put proposals forward to see which might fly.

At the very least, the Green New Deal is bringing heightened focus to the climate issue and stirring deeper debate about how to tackle the problem. It comes as some others in Congress are pitching a more market-driven approach: taxing carbon emissions to deter the use of fossil fuels while recycling the revenue back to taxpayers in the form of dividend checks.

So, even if the Green New Deal fails legislatively, it’ll be a chapter in a longer story. And it might already be shifting what analysts have called the “Overton window” of what ideas are seen as feasible – in this case on an issue where gridlock has long been the norm. 

“I think an open question is whether the moves on the left more recently are sort of moving the Overton window to where these carbon taxes become seen as a centrist, business-oriented approach” that can gain favor, says Daniel Cohan, an associate professor of environmental engineering at Rice University in Houston.

Mutually exclusive ideas?

To many economists, the idea of “carbon pricing” is the most efficient way to tackle greenhouse gas emissions. It would create antipollution incentives while leaving consumers and businesses free to find the least costly paths toward a clean economy.

And by recycling the revenue into “carbon dividends” for taxpayers, proponents hope the plan could become politically popular with bipartisan support rather than being seen as a drag on the economy and on personal incomes.

But proponents of the Green New Deal say their ideas don’t preclude some form of the “carbon dividend” scheme and have the virtue of steering the economy more aggressively toward zero net emissions of greenhouse gases by 2050. That’s the target set by scientists at the United Nations-backed Intergovernmental Panel on Climate Change, or IPCC.

To many voters who care about climate change, that ambitious target-setting is exactly what’s needed.

“We need to understand this is an issue that merits a wartime mobilization,” says Robert Larson, a resident of Columbus, Ohio, who’s working on a PhD in history. He says he appreciates that Alexandria Ocasio-Cortez, the newly minted congresswoman from New York who has become Democrats’ leading champion for the Green New Deal, has been framing the legislation in that light.

The scientists at the IPCC, for their part, have warned that “warming by the end of the 21st century will lead to high to very high risk of severe, widespread and irreversible impacts globally” unless the world acts collectively to halt the buildup of greenhouse gases in the atmosphere.

So far, even now that there’s an actual bill in Congress, the Green New Deal is more a vision statement than a detailed climate action plan. But it has rapidly gained fans on the left even as Republican officials have jeered at it.

Numerous Democratic aspirants for the 2020 presidential nomination are backers, including Sens. Kamala Harris of California, Elizabeth Warren of Massachusetts, and Cory Booker of New Jersey, among others. But many establishment Democrats have refrained from jumping on the bandwagon, including House Speaker Nancy Pelosi of California. 

January polling by Rasmussen Reports found 81 percent of likely Democratic voters favor a Green New Deal that would focus on climate change, income inequality, and racial injustice. Among Republicans, 63 percent said they were opposed, while unaffiliated voters were roughly evenly split, 38 percent in favor and 41 percent opposed.

Beyond climate, a social vision

By attaching “New Deal” to “Green,” framers of the plan are casting climate change as both an environmental and a social justice issue, an echo of the way Franklin Roosevelt’s New Deal aimed at social justice as well as ending the Great Depression.

“Our first concern is solving the problem, and we define the problem ... more broadly than climate change,” said Rhiana Gunn-Wright of New Consensus, a policy nonprofit that’s helping to shape the Green New Deal, at a recent climate-change discussion in New York. 

The framing as a 21st century New Deal could help galvanize voters’ support on an environmental issue that, while on their radar, isn’t often at the top of their priority list. But it also carries political risks.

On the one hand, to voters wary of capitalism’s flaws and excesses, it could signal something too tentative.

“If the Green New Deal is going to do what the old New Deal did, which is to try to save capitalism by softening the problems around it, then I do not think that it will really stave off catastrophe,” says Mr. Larson, who is a member of the Democratic Socialists of America (DSA) in Columbus.

It’s not that Larson favors socialism in the form a state-run economy; his preference is for something more like Scandinavian-style democratic socialism. But he lacks faith that light regulation or harnessing market forces will be effective at the rapid decarbonization that the climate problem calls for.

On the other hand, many Americans don’t want to see a larger federal government, and the Green New Deal looks like a case study in that risk.

“I don’t think central planning is a good way to address climate issues,” says Michael Rieger, a self-described moderate libertarian in Ann Arbor, Mich., who cares about global warming but also about economic growth.

The Green New Deal plan is vague on many fronts. It calls for big public investments and refers to an “appropriate” level of public ownership. It doesn’t overtly call for state control of industries, but such provisions, plus the plan’s array of social welfare goals, have drawn fire from conservatives.

“The more control you put into the hands of a few people, the more volatile it's going to be” and the more politically divisive, predicts Mr. Rieger, a young voter who’s preparing to enter law school in the fall.

In Ohio, Larson worries that free-market approaches could fail to slash greenhouse emissions fast enough, and he says society needs to accept some economic sacrifice – just as Americans made in World War II – to get there. By contrast, Reiger in Michigan is wary that that the Green New Deal could result in bureaucratic fiefdoms that stifle democracy, innovation, and prosperity.

Those contrasting views represent the political needle that climate policy will have to thread.

A middle ground?

Where the Green New Deal has energized the left, the idea of a “carbon dividends” plan has won endorsements from bipartisan sources including former cabinet officials, Federal Reserve chairs, Nobel laureate economists, and current members of Congress.

Advocates of harnessing market forces say sustaining economic growth is crucial to maintain political support for climate action. And they say a price on carbon can be effective at reducing emissions if it’s tried on a sustained, economy-wide basis.

“I don’t think we need to fundamentally rewrite the rules” of the economy to aim for net zero emissions, says Joseph Majkut, a policy expert at the free-market oriented Niskanen Center in Washington, D.C. “I’m not saying that it’s a small transition,” he says, but Americans can check on a carbon tax every five years to see its results and potentially adjust it if needed. 

But in practice, even middle-of-the-road policy ideas have had trouble succeeding politically. Mr. Bauman, the economist in Salt Lake City, found that out when he spearheaded an unsuccessful attempt to pass a carbon tax in Washington State in 2016.

And many experts argue that, in the end, creating a clean economy will require a blend of policies, not just carbon taxes. 

Martin Hayden of the group Earthjustice, which supports the Green New Deal’s vision, says voters should think not just about the costs of reducing emissions, but also about the much larger costs of environmental damage if climate change goes unaddressed.

“Doing the kinds of things that need to happen to rapidly decarbonize our economy is going to create a ton of jobs,” adds Mr. Hayden in Washington, D.C. “There is real genuine opportunity for economic growth.”