A Green New Deal

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The BBC has reported that:

A "Green New Deal" is needed to solve current problems of climate change, energy and finance, a report argues.

According to the Green New Deal Group, humanity only has 100 months to prevent dangerous global warming.

Its proposals include major investment in renewable energy and the creation of thousands of new "green collar" jobs.

I am a member of the Green New Deal Group.

As we say in our press release:

The Green New Deal is a response to the credit crunch and wider energy and food crises, and to the lack of comprehensive, joined-up action from politicians. It calls for:

  • Massive investment in renewable energy and wider environmental transformation in the UK, leading to,
  • The creation of thousands of new green collar jobs
  • Reining in reckless aspects of the finance sector - but making low-cost capital available to fund the UK's green economic shift
  • Building a new alliance between environmentalists, industry, agriculture, and unions to put the interests of the real economy ahead of those of footloose finance

The global economy is facing a 'triple crunch': a combination of a credit-fuelled financial crisis, accelerating climate change and soaring energy prices underpinned by encroaching peak oil. It is increasingly clear that these three overlapping events threaten to develop into a perfect storm, the like of which has not been seen since the Great Depression, with potentially devastating consequences.

Proposal's set out in the Group's report include:

  • Executing a bold new vision for a low-carbon energy system that will include making 'every building a power station'.
  • Creating and training a 'carbon army' of workers to provide the human resources for a vast environmental reconstruction programme.
  • Establishing an Oil Legacy Fund, paid for by a windfall tax on the profits of oil and gas companies as part of a wide-ranging package of financial innovations and incentives to assemble the tens of billions of pounds that need to be spent. These would also include Local Authority green bonds, green gilts and green family savings bonds. The monies raised would help deal with the effects of climate change and smooth the transition to a low-carbon economy.
  • Ensuring more realistic fossil fuel prices that include the cost to the environment, and that are high enough to tackle climate change by creating economic incentives to drive efficiency and bring alternative fuels to market. This will provide funding for the Green New Deal and safety nets to those vulnerable to higher prices via rapidly rising carbon taxes and revenue from carbon trading.
  • Minimising corporate tax evasion by clamping down on tax havens and reforming corporate financial reporting. A range of measures including deducting tax at source for all income paid to financial institutions in tax havens would provide much-needed sources of public finance at a time when economic contraction is reducing conventional tax receipts.
  • Re-regulating the domestic financial system. Inspired by reforms implemented in the 1930s, this would imply cutting interest rates across the board- including the reduction of the Bank of England's interest rate - and changes in debt-management policy to enable reductions in interest rates across all government borrowing. This is designed to help those borrowing to build a new energy and transport infrastructure. In parallel, to prevent inflation, we want to see much tighter regulation of the wider financial environment.
  • Breaking up the discredited financial institutions that have needed so much public money to prop them up in the latest credit crunch. Large banking and finance groups should be forcibly demerged. Retail banking should be split from both corporate finance (merchant banking) and from securities dealing. The demerged units should then be split into smaller banks. Mega banks make mega mistakes that affect us all. Instead of institutions that are 'too big to fail', we need institutions that are small enough to fail without creating problems for depositors and the wider public.

It's bold vision. But we believe w are in need of such boldness.

The Green New Deal report is available here.