Envisioning a Green New Deal: A Global Comparison

Introduction

The Green New Deal, a broad and sometimes vague aspiration to rapidly mobilize American government, society, and industry to create a sustainable, low-carbon future, has become hotly contested among policymakers. For supporters, such an effort represents a last chance to avoid the worst consequences of catastrophic climate change. For detractors, it’s a financially profligate proposal concerned more with traditional left-wing economic policies than environmental necessity.

A congressional resolution on the Green New Deal both motivated and divided Democrats during the 2020 presidential campaign, and it ultimately influenced President Joe Biden’s climate plan. Biden issued a broad slate of executive actions addressing climate change in his first days in office.

Such a proposal, affecting all aspects of the U.S. economy and society, is unprecedented. However, major world economies, including China, India, and the European Union, have begun implementing some of the policies envisioned by the Green New Deal, shedding light on the complexities and costs involved.

What’s in the Green New Deal

The Green New Deal is a contested concept, but all of its various versions center on a common vision of a government-led, society-wide effort to dramatically reduce U.S. greenhouse gas emissions and quickly shift the U.S. economy to be less carbon intensive. The term might have originated in a 2007 New York Times column by Thomas Friedman, and by 2018 the concept had become a rallying cry in Democratic Party politics. In February 2019, Representative Alexandria Ocasio-Cortez (D-NY) and Senator Ed Markey (D-MA) introduced a nonbinding resolution [PDF] in support of the idea.

Their version is essentially a statement of principles backing a ten-year “national mobilization.” The resolution is notable for going far beyond climate change, aspiring to a broad-based industrial policy that would reshape the U.S. economy. It aims for a sweeping social transformation reminiscent of President Franklin D. Roosevelt’s New Deal, which was an unprecedented application of the power of the federal government to dig the United States out of the Great Depression in the 1930s.

The goals of the Green New Deal involve:

• Emissions: cutting net greenhouse gas emissions to zero over ten years. 
• Manufacturing: spurring “massive growth in clean manufacturing.” 
• Power use: meeting all U.S. power demand “through clean, renewable, and zero-emission energy sources.”
• Agriculture: sharply reducing emissions and other pollution from agriculture.
• Infrastructure: upgrading infrastructure, including transportation and housing, and ensuring all infrastructure bills considered by Congress address climate change.
• Jobs: guaranteeing a job with a “family-sustaining wage” for everyone.
• Welfare and social justice: providing everyone in the United States with high-quality health care, affordable housing, economic security, clean water, clean air, and healthy food, while addressing systemic social exclusion and injustice.

The specific means to carry all this out are left open, but the resolution stresses that it should be a duty of the federal government and should include public financing, technical expertise, public investment in research and development, stronger enforcement of trade rules relating to the environment, antitrust enforcement, and the expansion of workers’ rights.

The Debate

The Green New Deal grew out of an increasing urgency regarding climate change, which the resolution calls a “direct threat to the national security of the United States.”

But critics argue that the expense of such a mobilization would be astronomical, and some leading Democrats in Congress have been skeptical of what they see as an overly broad approach. Jerry Taylor of the Niskanen Center, a free-market think tank, writes that proponents of the Green New Deal have attached to the plan too many issues unrelated to climate change, and ended up with an inflated price tag that is easy for opponents to attack on fiscal grounds. Economist Noah Smith writes that the plan’s “enormous new entitlements paid for by unlimited deficit spending” could mean that nearly three-quarters of all U.S. economic activity would eventually come from government spending. 

Many experts say concerns over costs are highly speculative given the plan’s lack of details. The Congressional Budget Office, which provides cost estimates for all proposed legislation, has been unable to do so in this case because there are not yet concrete policy proposals. Many on the left, such as the progressive think tank Data For Progress, argue that dealing with climate change will be expensive either way, and that inaction will be much worse: they point to the National Climate Assessment’s prediction that the effects of global warming could cost the United States upward of $500 billion per year by the end of the century.

Indeed, a near-universal consensus has emerged that dramatic action to fight climate change is necessary. A 2018 special report by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) warned that the most harmful effects of global warming could occur by 2040 and suggested there only remained twelve years to cut emissions enough to limit global temperature rises to 1.5°C or 2°C over preindustrial levels and avoid the worst outcomes. The U.S. National Climate Assessment, also released in 2018, raised alarm over the spread of deadly diseases, such as West Nile virus and Zika virus, to new parts of the United States. At the same time, floods, hurricanes, and wildfires that experts say are worsened by climate change have devastated swaths of the country in recent years. Likewise, the U.S. military has warned about the rising threat of climate-driven conflicts.

At the same time, growing civil society movements are seeking to force action on climate, from Friday school strikes in Sweden and elsewhere to the Sunrise Movement in the United States to the Extinction Rebellion in the United Kingdom.

In the run-up to the 2020 presidential election, President Donald J. Trump cast the plan as a “socialist nightmare” that would ruin the American economy. During his time in office, Trump revoked regulations on coal-based power plants, lifted limits on methane emissions, and weakened automobile fuel-efficiency standards. Biden, however, calls the Green New Deal a “crucial framework,” but he says his climate plan is different: it does not offer guarantees of jobs, food, and housing. Shortly after taking office, Biden issued a string of executive actions addressing climate change: rejoining the Paris Agreement, a global pact to reduce emissions; pausing new oil and gas leases on federal lands and canceling the Keystone XL pipeline; and setting in motion plans to electrify the federal government’s fleet of vehicles.

As the debate over the Green New Deal rages in the United States, a number of other countries and regional and city governments around the world are moving forward with their own climate policies. How do they compare to the Green New Deal’s proposals?

The Two Giants: China and India

China is the world’s foremost emitter, producing roughly 28 percent of all emissions in 2018, compared to 15 percent in the United States, while India is responsible for much of the global rise in emissions in recent years. Neither has decarbonization goals anywhere near as ambitious as the Green New Deal, but both have taken steps to scale back emissions, cut pollution, and employ renewable energy resources, even as they continue to seek faster economic growth to lift their people out of poverty.

China. The Asian giant produces more than a quarter of global greenhouse gases, emitting nearly as much as Canada, Europe, and the United States combined. Beijing’s buy-in was central to the Paris Agreement, in which China promised that its carbon dioxide emissions would peak by 2030. The country appears on track to keep its commitment, although emissions have again increased in recent years, and President Xi Jinping has pushed several green initiatives. These include efforts to transition from coal to renewable energy, investments in new technologies, and mechanisms to put a price on carbon. In 2020, Xi announced a goal to achieve carbon neutrality by 2060, though Chinese officials have not shared a detailed plan.

But China’s climate policy has a coal problem: its power sector runs on it, and the country accounts for over half of global coal consumption, producing worrisome levels of air pollution. Though new coal plants are still being built, China has successfully combated air pollution: it cut fine particulates by more than 30 percent from 2014 to 2017. This has raised hopes it could similarly attack greenhouse gas emissions. “Already, 40 percent of the world’s new renewable power plants are in China, and in 2016 China invested $78.3 billion in renewable energy—exceeding both Europe ($59.8 billion) and the United States ($46.5 billion),” CFR’s Elizabeth C. Economy writes in her book The Third Revolution. The Green New Deal’s commitment to zero-emission power would rule out the use of coal.

Xi’s Made in China 2025 policy, a state-led high-tech manufacturing strategy, has started developing industries including electric cars and rail transport. Beijing has already spent some $60 billion to create an electric car industry, and more electric vehicles were sold in China in 2019 than in the rest of the world combined. However, if the underlying power sector that charges all these new modes of transport still uses coal, such technologies might not be as green as they seem.

Like the European Union and several other countries, China is trying a national emissions trading scheme (ETS). Emissions trading programs, often known as cap and trade, allow the government to issue permits for emissions. The number of these permits is then capped, and firms that wish to emit must buy permits on an open market, forcing polluters to pay an economic price for their environmental harm. Some analysts, however, say that China’s scheme, which only covers power companies that emit over twenty-six thousand tons of carbon annually, is narrowly applied and has suffered delays and technical problems.

India. In 2018, India was the world’s third-biggest national emitter, at 7 percent of the total, behind only China and the United States. New Delhi has set a renewable energy target for 2022 that would require an investment four times the size of its national defense budget. Despite an expansion of solar power, coal still supplies more than half of India’s energy consumption. The latest forecasts predict India will fall short of its 2022 goal, and it remains unclear how disruptions from the COVID-19 pandemic will affect India’s energy transition. 

For many observers, India is a bellwether for determining whether global greenhouse gas emissions reductions can be successful. The country’s population will soon surpass China’s, and its economy is already growing faster. While emissions have at times leveled off or even dipped for China, the European Union, Japan, Russia, and the United States, India’s have steadily risen.

The European Union

Under the Paris Agreement, the European Union promised to reduce greenhouse gas emissions by 40 percent, compared to 1990 levels, by 2030. Its members, who collectively account for 9 percent of global fossil fuel carbon emissions, are trying to make reductions at both a European and national level, with efforts centered on an ETS, coal reduction, and agricultural policy reforms.

European ETS. Launched in 2005 to much fanfare, the EU’s trading system was promoted as the world’s first major ETS. Companies are required to measure their emissions and buy permits if they exceed a ceiling, which drops by 1.74 percent annually.

In practice, the program has struggled. A glut of permits resulted in carbon prices that fell by four-fifths from 2010 to 2017. The problem will be exacerbated if the United Kingdom—the EU’s second-largest emitter of carbon, after Germany—dumps its permits on the market after it leaves the bloc. Stanford University’s Jeffrey Ball writes that trading systems such as the EU’s are often ineffectual because prices are too low to force reductions, and “policymakers and the public delude themselves that they are meaningfully addressing global warming.”

National emissions efforts. Individual EU countries have also committed to emissions cuts. Germany plans to shut down all of its coal-fired power plants by 2038, though it opened a new plant in 2020, and it has set aside $45.7 billion in aid for regions that rely on coal jobs. In 2011, after the meltdown at the Fukushima Daiichi Nuclear Power Plant in Japan, Germany decided to phase out all of its nuclear plants by 2022.

The European experience underscores the divisive nature of nuclear power: while many experts see it as one of the most effective ways to cut emissions, Green New Deal proponents side with Germany in rejecting it over concerns about waste disposal and accidents. France has embraced it, currently deriving 75 percent of its electricity from nuclear power, though policymakers are now seeking to reduce that dependence. Nuclear energy proponents point to France’s per capita carbon dioxide emissions, which have steadily fallen since the 1970s and are now about one-quarter those of the United States.

The Green New Deal calls for major investments in transportation; Americans rely on cars much more than Europeans. This is largely due to the higher density of European cities, which makes public transport more viable. But even in the EU, steps to reduce car use remain fraught: in France, the Yellow Vests protests broke out in late 2018 over a planned fuel tax increase. Vehicle gas there is about twice as expensive as in the United States, in large part due to higher taxes.

Agricultural reform. Wielding enormous political clout and long supported by state subsidies, Europe’s agricultural sector emits nearly 10 percent of the continent’s greenhouse gases. But the EU has seen a 20 percent drop [PDF] in emissions of agricultural methane and nitrous oxide since 1990, with only two of its members—Cyprus and Spain—moving in the other direction. This decrease is largely the result of tighter regulations on fertilizer and reductions in livestock, both of which are alluded to in the Green New Deal resolution.

Small Emitters, Big Ambitions

Dozens of smaller countries, regions, and even cities have pushed the envelope on emissions reduction goals and other climate policies. Indeed, their strategies are often closer to the ambitions of the Green New Deal than those of larger economies.

Norway and other countries. Norway, which is not an EU member, has been particularly aggressive on energy policy. Norway aims for all new cars to have zero emissions by 2025, and it has exempted electric vehicles from many taxes, tolls, and parking fees. The incentives have had an effect: despite a population of about five million, Norway is the third-largest market in the world for electric cars, after China and the United States. The Netherlands and several other countries have set similar targets.

In March 2019, Norway announced its $1 trillion sovereign wealth fund—the world’s largest—would divest from oil and gas firms. However, some analysts question Norway’s green ambitions, given that crude oil and natural gas make up half its exports.

Chile became the first South American country to implement a carbon tax in 2014. Mexico launched its own such tax in 2018. Kazakhstan, New Zealand, and South Korea have followed, either taxing carbon or implementing their own ETS. Costa Rica has launched a national program to completely decarbonize its economy by 2050.

Cities, states, and regions. These smaller communities are often willing to go further than national politics allow. Copenhagen has announced plans to be carbon neutral by 2025. Dozens of cities around the world have banded together to try to influence climate policy. In the Powering Past Coal Alliance, for instance, eighty cities, states, regions, and national governments have committed to phasing out coal use. States such as California, provinces such as Quebec, and metropolises such as Tokyo have all pledged to start their own emissions trading schemes.

California, on its own the world’s fifth-largest economy, has rallied local climate efforts. In 2018 the state mandated that by 2045 it would transition to 100 percent clean electricity. Two years later, Governor Gavin Newsom signed an executive order that by 2035, all new vehicles sold must be zero-emission. Climate experts say that such subnational efforts can serve as laboratories for best practices, and in some cases—such as California’s development of auto emissions standards in the 1960s—regions with enough market power can force national governments to follow their lead.

Less Ambitious Alternatives

In early 2020, Democrats in the U.S. House of Representatives introduced the CLEAN Future Act, an attempt to bridge the divide between ardent Green New Deal supporters and moderate Republicans who have voiced concerns about climate change. The legislation would require energy providers to get 100 percent of their electricity from clean sources such as wind, solar, or nuclear power, or from fossil fuels if their carbon emissions were captured, by 2050. However, the proposal has yet to be brought to a vote. 

In mid-2020, House Speaker Nancy Pelosi (D-CA) and Representative Kathy Castor (D-FL) released a set of climate proposals—the Climate Crisis Action Plan—that reiterate several points from the CLEAN Future Act. The plan includes a mandate for electric utilities to reach net-zero greenhouse gas emissions by 2040, a national commitment to produce only electric cars by 2035, new limits on methane emissions, and a carbon pricing system. With Democrats now in control of the Senate, calls for more aggressive actions could increase, but their razor-thin margin will make ambitious legislation difficult to pass.