Blogs >> A Green New Deal could deliver ‘Zero Carbon Britain’ if the political will existed.

A Green New Deal could deliver ‘Zero Carbon Britain’ if the political will existed.

Ruth Potts

There can be few more apposite moments to consider the future direction of the global economy than the immediate aftermath of the latest report from the Intergovernmental Panel on Climate Change. There are no real departures from the previous report, published in 2007, just more evidence of the extent of global temperature rises: the melting of ice sheets and sea ice, the retreat of the glaciers, the acidification of the oceans, and changes in weather patterns. The conclusion is familiar and devastating: “It is as bad as we thought it was.”

When even the head of the OECD – effectively the economic think-tank of the world’s wealthiest nations – urges the ending of fossil fuel subsidies, massive investment in renewables and urgent action to decarbonise the global economy, it is time to act. The world’s governments could act now to implement the essence of a plan that would set the world on the path to a post-carbon future while also creating high quality jobs around the world.

Five years after the collapse of Lehman Brothers sent shockwaves around the global financial system, the Green New Deal Group, whose groundbreaking ideas were taken up around the world in 2008, have published a ‘National Plan for the UK’ that would shift the nation from the politics of austerity and rapidly-growing inequality to the age of the ‘Green New Deal’. Building on their original proposals, the Green New Deal Group’s plan outlined in their report A National Plan for the UK: From Austerity to the Green New Deal, is designed to fundamentally transform a still-broken financial system and reduce the deficit, while transforming the UK’s aging infrastructure to meet a range of environmental and social challenges

The principles of the Group’s plan could be applied anywhere, in the UK context it would help to rebalance the economy away from the South East, make the nation’s energy supplier cleaner and more secure, homes warmer, streets safer and communities more vibrant. The Green New Deal would also ‘detoxify’ the UK economy by reducing tax avoidance and evasion, ending hidden subsidies to the UK’s biggest banks, and the destructive ‘Dash for Gas’. It would create quality employment in every part of the country and, in a transformed economy where we really are all in it together, ignite a shared sense of national purpose. It is a political, social and environmental win-win, in the words of Group member Andrew Simms: “an economic detox diet to correct the consequences of the worst current financial, work-place and environmental abuses.”

The investment needed to implement the plan is not only readily available, but a carefully targeted programme would also help to reduce the UK’s budget deficit, according to the Group’s analysis. “It is crucial that government replaces destructive austerity policies that have created a low-investment, low-wage, heavily indebted, unbalanced ‘Alice in Wongaland economy’ with massive investment in a Green New Deal” says Ann Pettifor, a co-author of the report. The economic benefits don’t stop there: a Green New Deal that creates real jobs paying a living wage would also overcome the present lack of sustainable and adequate effective demand in the economy: “This could be financed, in part, by a form of ‘Green QE’: with government co-operating with the Bank of England via its money market operations, to create financial products at very low rates of interest to fund green infrastructure investment. This investment would, thanks to the multiplier, pay for itself,” according to Ann.

In addition to ‘Green QE’ the programme would also be funded by a range of measures designed to end some of the worst abuses of the finance system, while fundamentally transforming it to meet future needs. Tackling just some of the £95 billion currently lost to tax evasion and avoidance in the UK could be achieved by increasing obligations on individuals and companies to prove tax paid is tax owed, and employing enough tax inspectors. Controls to ensure that bailed-out banks also invest in the Green New Deal at low, sustainable, rates of interest would be a simple quid pro quo for the taxpayer guarantees and low interest rates that have enabled the bailed-out banks to survive. Buying out costly PFI schemes using Green QE, and then using the money that would otherwise have been spent on interest payments to fund the Green New Deal would provide resource and put an end to costly and unpopular schemes. After initial investment needs had been met, encouragement for pension funds and other institutional investors would be vital for the longer term in areas like energy efficiency, providing secure returns for pensioners and increasing intergenerational solidarity.

What would the Green New Deal do, and who would benefit? Building on the plans laid out in the Centre for Alternative Technology’s Zero Carbon Britain: Rethinking the Future, the Green New Deal plan calls initially for a £50 billion-a-year transformation programme. To begin with, this would involve a nationwide project to make every building in the country energy efficient and building hundreds of thousands of new, affordable, sustainably-sited, energy-efficient homes. Warming homes would create thousands of jobs, while also helping to reduce fuel poverty. Shifting to green energy, in place of the dangerous and destructive ‘Dash for Gas’ would also create countless jobs. According to Zero Carbon Britain, the job creation potential of a zero carbon economy could be as high as 1.5 million new jobs spread across the country, covering a range of skills and sectors. Government could also replace discredited plans for a high-speed rail link with a programme of improvements to the rail network reducing overcrowding and improving the quality of everyday journeys. As Green New Deal Group member and Green MP, Caroline Lucas, observes: “There is huge, and as yet untapped, potential in renewable energy, energy and resource-use efficiency and the transformation of our transport system that would create high-quality jobs across the country and reduce the UK’s overall ecological impact.”

Broad-based economic activity and a sense of purpose returned, government would see revenues rise as the tax-take increased, balancing the government budget without punishing the poorest. More than that, the Green New Deal would fundamentally transform the economy for good. “If we are serious about staying below 2C warming, as we have legal obligations to do, then to invest in a destructive Dash for Gas when there is a Green New Deal on the table borders on criminal negligence by my parliamentary colleagues” concludes Caroline Lucas. Designed for the UK, the Green New Deal is international in outlook and could be taken up and adapted around the world. We can do it. The plan exists. Whether we collectively act will have everything to do with it.

www.greennewdealgroup.org

Ruth Potts completed the College’s MA Economics for Transition and is a co-founder of bread, print & roses: a collective engaged in seditious pamphleteering, radical walks and anarchist baking. She is also developing a new Masters in Ecological Design Thinking at Schumacher College. Previously, Ruth was head of Campaigns and Communications at nef and is a member of the Green New Deal Group.