Last Friday (19th Sept) I attended a debate at The Guardian titled: 'Triple Crunch: Can we solve the credit crunch, climate change and energy shocks with a Green New Deal?' The New Economics Foundation (NEF) have just launched the first report of The Green New Deal Group, you can find out more about it here:
It is a radical policy proposal that takes F.D. Roosevelt’s response to the great crash of 1929 as its inspiration. That ‘New Deal’ responded to the great depression through a wave of economic, fiscal and financial reforms that sought to re-build the economy and provide employment for the masses who had been forced into unemployment by the crash. Larry Elliot, the Guardian’s economics editor and member of the Green New Deal group, was first to speak at the debate and was adamant in saying that the week that had just passed would go down in history as the week when the failings of Neo-liberalism were most dramatically exposed. Last week saw huge financial catastrophe’s that signified that last summer’s Northern Rock disaster and the credit crunch were not a fluke or one off. We are on the brink of recession. The timing of this debate, which was already timely, was now suddenly too timely! All the talk was of the future of the economy and the events of the last week. I can’t pretend to be an expert on financial matters, so have desperately been swotting up over the weekend to try and understand the financial sector. I have to admit I am still as confused as ever about how it all works, short-selling, hedge funds, credit crunches…. I have also been reading the Green New Deal, its details were hardly touched upon during the debate. The debate focused on the problems, the document offers some solutions.
The Green New Deal is something that I have been hoping for, for a while; it is a discussion of the big question. The question is one that John Naish brings up in his book ‘Enough.’ It is a question that environmentalists and economists need to ask, together. Naish (2008) is optimistic that the present consumerist, hedonist culture can shift towards one that is emotionally and environmentally sustainable. He is, however, troubled by one big question; he puts it like this:
What would happen to our exclusively growth-based economy if we suddenly did all start to embrace enoughism? Would the world’s finances collapse? This question turns out to be the fiscal elephant in the eco-living room.
I’m troubled by this question too, but it is in my opinion the only question worth asking and I am very greatful to the Green New Deal group for their efforts to answer it.
So, what does the Green New Deal propose? It basically says we, in the UK, need to prepare ourselves for the energy crisis that is sure to evolve from the imminence of Peak Oil. Climate scientists have long been telling us that climate change is happening and is caused by the burning of fossil fuels, which gives us another reason to change the way we produce energy. Investment in a widespread renewable energy infrastructure is according to the Green New Deal the answer. Not only will it make the UK less dependent on the imports of fossil fuels, it will provide an alternative to re-opening the coal mines, it will provide jobs during a time of recession and it will, importantly, provide an example to the rest of the developed and developing world. All sorts of clever financial regulations, including tightening up on tax havens, accountancy and the availability of credit would need to happen. A second huge step would be to decrease interest rates to 2% to encourage investment in long-term renewable energy projects. The third requirement is the will of the Government to invest heavily in renewable energy. I really do hope the Government sit up and take notice of this report and other policy recommendations made by NEF. To an environmentalist it goes without saying that radical reforms in the way our economy and society works are needed. Hopefully, we in the UK can be brave enough to take a real stand on climate change, the credit crunch and the energy crisis. We don’t really have a choice.
(Please email me for references).