Green New Deals….Yes….but What does that Mean?

April 9, 2019

A large part of the left have embraced the idea of “Green New Deals” – making an analogy to the response to the Depression of the 1930s with an idea today that with greater state expenditure a huge effort can be put into developing the infrastructure of an economy based on renewables and a decarbonised energy system. This would simultaneously create jobs…it sounds good but….

Unfortunately there appears to be little recognition that such a Green New Deal must address a much bigger set of issues than merely climate change. It will be taking place in a context in which the global economy has already overshot the carrying capacity of global ecology – and climate change is only one part, a very important part, but only one part of the problem. Global ecological footprint analysis suggests more than 80 percent of the world’s population lives in countries that are running ecological deficits, using more resources than what their ecosystems can renew. Humanity uses the equivalent of 1.7 Earths to provide the resources we use and absorb our waste.

For any new deal to be helpful and not add to the ecological chaos it must take into account:

1. A recognition that renewable energy systems are a relatively expensive form of energy that is not always reliable because there are no affordable means for long term electrical energy storage on a grid scale. It is possible to store energy to buffer and even-out hour by hour fluctuations in power brought about by intermittent sunshine and wind. However season by season fluctuations have as yet no affordable purely renewable solution. Industry has been trying to improve batteries for over a hundred years. An economy that relies only on renewable energy sources would be intermittent and expensive– as was the case before the industrial revolution. There is thus an issue of who is to pay and how they are to afford future energy. More expensive energy will mean less money for everything else and drag down the economy.

2. Mineral and energy sources needed as inputs for the construction of “green technologies” (turbines, solar panels, car batteries etc) are in increasingly short supplyAn economy with electrical vehicles powered by renewable energy would have to ramp up the production of EVs by 100 times by 2030 (which is the current EU target). Corresponding to this would be an increased demand for production inputs of cobalt, lithium and nickel and copper to build the electrical vehicles. However at 100 times the demand world cobalt resources would be exhausted in 8 months, lithium in 5 years; nickel in 4 months and copper in 5 months.

3. It has become more expensive to extract coal, oil and gas from harder to get at sources – but users of coal, oil and gas struggle to afford the rising costs of extraction so that many fossil fuel companies are heading to bankruptcy. This is particularly true of fracked oil and gas in the USA.  If a Green New Deal is to maunfacture solar panels, wind turbines, smart grids and EVs it will need energy to manufacture the new systems. There are not enough renewable energy systems to generate energy to build new systems. At this stage new systems will need to be built from mainly fossil fuel sources. If an increasing part of fossil energy production is set aside to build renewable energy systems then consumption of fossil fuels for other purposes will have to be throttled back even more drastically. As one author puts it: “But here’s the rub. The construction of that shiny new infrastructure requires not just money, but…energy. And that’s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term — effectively steepening the decline — for a long-term energy plan? It’s a trap!”

4. Slogans like those calling for a “Green Industrial Revolution” miss the fact that a greater priority is a Green Agrarian Revolution. Humanity has already overshot a safe level of CO2 and other greenhouse gases in the atmosphere and needs to suck greenhouse gases out. The only credible (affordable) options for “draw down” of carbon dioxide already in the atmosphere is into biomass and soils which means programmes of different kinds of land management and cultivation using different practices.

5. Creating jobs and investment leads to further expenditure when people spend their increased income – without additional mechanisms this is likely to include expenditure, further expanding “bads” as well as goods and undoing whatever environmental benefits have been done (eg people spend their increased income to fly off on holidays with climate implications from aviation en route and with impacts on the ecology of the places they go to ).

6. Non-climate ecological problems like biodiversity collapse and loss of topsoils  must be addressed simultaneously.  Otherwise there will be other types of crises like the extinction of pollinating insects and animals and fertility collapse. This also means a focus on different approaches to land management – which is vital too if drought and flooding are to be managed by different practices to make soil and land better able to hold moisture. For the same reasons responses to avert a danger of fire will require different approaches to land management.

7. Well meaning ideas like the suggestion that we should all be on a vegan diet are not as straightforward as they seem. It is true that feeding crops to people rather than to animals and then eating the animals is more energy efficient when we are moving away from factory farming and fodder fed animals. However the depletion of fossil fuels and their increased expense will be a serious problem for arable farming because of the heavy reliance of tractors motivated by fossil energy – and the added problems where petrochemical fertilisers and pesticides suddenly start to be in short supply. Some land is likely to be left fallow and the obvious thing to do is graze cattle on it. Animals can also be walked to local markets and their dung helps recreate soil fertility. A regrowth of grazing land also creates better conditions for bio-diversity revival.

8. Then there are the money and economic management issues. There is the question of how a Green New Deal would be financed. This is not straightfoward. One idea is that the state could deficit finance – “print money” to spend. In theory extra demand would lead to extra employment and extra production to meet the extra demand. Nice idea – but will it be possible for production to expand?

As explained above, depletion means that there are likely to be shortages of energy to work productive machines and equipment, as well as shortages of materials like metals. The availability and cost of energy, minerals and raw materials would set a constraint on material production and lead to shrinking production capacity. Nor would “unemployed labour” always be fully available to produce stuff – people would be having to work harder on their domestic and household arrangements. Shopping is likely to be harder work and stressful in the daily struggle to make ends meet. In a period of power cuts household appliances might not work for periods too – so your planned weekly laundry doesn’t get done and on an increasing number of days there is no petrol to drive the car to work or no power to charge the batteries. “Unemployed people” will be very busy!

This means managing a contracting economy is going to be difficult – any extra money might end up chasing a declining number of consumer goods – particularly if there is a prioritisation to use scarce resources to build wind turbines rather than things for homes. In these circumstances general economic production capacity would shrink while additional purchasing power would chase fewer goods leading to rising prices that might ultimately lead to collapse of confidence in the currency.

9. Another approach must be to tax the wealthy. 10% of the global population is responsible for 50% of global emissions – they must bear a proportionate burden of putting things right. But with the economy contracting and needing to emit less there is limited scope for rising income for the poor. Instead we need institutions that enable people to save on resource use (like insulation) and share more. Unfortunately if the income of the rich is re-distributed to the poor, and the poor spend more on goods that require burning fossil fuels to create, then we are not solving the problem.  The Green New Deal….contains a basic contradiction that anyone pursuing it will have to wrestle with as it develops. Many of the measures proposed – such as investing in infrastructure and spreading wealth more evenly – will intrinsically work in tension with efforts to decarbonise the economy.” 

Conclusion – the Green New Deal, if presented as a way of investing in energy techno-fixes, could be a misleading magic formula. If seen as a start of a dialogue about a wide ranging transformation of society including communities setting up arrangements to help each other, it could be helpful.

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Brian Davey

I now live in Nottingham in semi-retirement. This means doing much the same as when I was 64 but with a state pension and tiny private pension as well. In 1970 I got a 1st in Economics at Nottingham University – and then in 1974 an M.Phil. for a thesis on a Marxist approach to the economic development of India. This led to a varied career working with mainly community projects both in the UK and abroad. In 2003 John Jopling of Feasta followed a suggestion of Richard Douthwaite's and invited me to a yearly group discussion by the sea – at Rossbeigh in Kerry. I have been going virtually every year since then and have spent much of my spare time involved in the ecological and economics discussions of Feasta, particularly in its climate work. After Richard's passing I stepped into part of a teaching role that he had had at Dublin City University teaching on a degree in Religion and Ecology. This teaching led, in turn, to this book.

Tags: Green New Deal, limits to growth, Renewable Energy, renewable energy production