Nuts and bolts of an Aussie Green New Deal

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The Reserve Bank (RBA) cut rates this week to a historic low of 1 per cent in an attempt to stimulate the economy in order to maintain employment growth and increase disposable income (and, thus, consumption). The ALP have argued that 1 per cent interest rates signal a 'national crisis' and that successful economic stimulus is going to take more than a rate cut.

Protestors at an Anti Adani protest in front of Parliament House on 12 February 2019. (Photo by Tracey Nearmy/Getty Images)In response, they have pushed for the LNP to bring forward its tax cuts and to increase spending on infrastructure. RBA Governor, Phillip Lowe, has a more optimistic take, stating 'the outlook for the economy remains reasonable', but has also hinted that more could be done to stimulate consumption. 

Of course, the question of what should be done to stimulate the economy (if anything at all) largely depends on how you frame the problem and, in particular, on how you explain its origins. Debates around the meaning and cause of economic crises are nothing new, and they have been blamed on everything from greed, to regulatory failure, poor economic theory, culture and excessive regulation.

While all of these contain a grain of truth, David Harvey also contends that these crises are the result of systemic risks — specifically the internal contractions of capital accumulation — that are never solved but are instead moved around geographically. These contradictions are multiple — including the current imbalance of power between finance capital and labour — but perhaps the most significant one is the fact that capitalism requires endless growth in a world of limited resources, leading us into not only financial crises but ecological ones too.

So how do we respond to this combination of ecological and financial crises? One potential solution that is currently receiving a lot of attention is to adopt a 'Green New Deal'. But what does that actually mean?

Early references to a Green New Deal go back to the time of the last global financial crisis. In early 2007, Thomas Friedman called for a Green New Deal, specifically on energy policy, arguing, 'like the New Deal, if we undertake the green version, it has the potential to create a whole new clean power industry to spur our economy into the 21st century'. A more comprehensive policy was also proposed in 2008 by a group calling themselves the Green New Deal Group, which combined green energy reforms with job creation and proposals to stabilise the market via 'an orderly downsizing of the financial sector'.

The Green New Deal currently being promoted by Alexandria Ocasio-Cortez, and debated in the US Democratic Primaries, seeks to simultaneously tackle climate change, poverty and inequality via a government-led transition to clean energy and transport coupled with support for green employment and economic transition (particularly for communities whose income relies on fossil fuel production).

 

"This approach is a clear departure from the market dominance of neoliberal economics, and challenges the often-cited argument that action on climate change will take away people's jobs."

 

What all of these proposals have in common is a commitment to both socioeconomic equality and environmental action, and a belief that this must be government-led rather than market-based. This approach is a clear departure from the market dominance of neoliberal economics, and it also challenges the often-cited argument that action on climate change will take away people's jobs and reduce standards of living.

Republicans in the US criticise the Green New Deal, arguing that it will take away people's rights to fly, to own a car, and even to eat ice cream. Perhaps more seriously, many have argued that the plan is simply too expensive. In response, proponents have argued that it would cost less than inaction on climate change and will actually make money by stimulating the economy.

So, where does Australia sit within this debate? In May this year, Shadow Environment Minister, Tony Burke, announced that the ALP would be promoting a new approach to climate policy, which would focus on government regulation and spending. Interestingly, Burke argued that market-based mechanisms 'remained optimal policy', but that this government-led approach was more popular with voters.

The LNP government has also adopted a direct government investment approach to climate policy — proposing a Climate Solutions Fund and increasing investment in renewable energy — but its targets are more modest and have little to say about social equity.

A Green New Deal in Australia would mean a significantly stronger commitment to a government-led rapid transition to renewable energy and cleaner transport, along with clear programs to support transition to well-paid green jobs in places like Townsville, which previously relied on the resource extractive industries.

While this all sounds very expensive, economists like John Quiggin argue that 'it would barely be noticed against the background of the general fluctuations in the economy' and that the 'average household has lost far more from the wage stagnation of the last decade'. Ultimately, if we need to stimulate the economy anyway, we may as well do it in a way that tackles climate change while also creating jobs that are fit for the future.

 

 

Cristy ClarkDr Cristy Clark is a lecturer at the Southern Cross University School of Law and Justice. Her research focuses on the intersection of human rights, neoliberalism, activism and the environment, and particularly on the human right to water.

Main image: Protestors at an Anti Adani protest in front of Parliament House on 12 February 2019. (Photo by Tracey Nearmy/Getty Images)

Topic tags: Cristy Clark, climate change, Green New Deal

 

 

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Existing comments

Welcome to capitalism, and its automatic abandonment of the needy. But it is far too late for such gradual measures, especially using a price mechanism that utterly fails to deliver social or environmental benefit. “Green New Deal” also requires another thing we do not have - effective government willing to govern for the masses instead of the moneybags. ADAPTATION needs the focus. Emissions in fact ceased to be the central issue three decades ago. Decades of denial has sacrificed the opportunity it once offered to avoid massive upheaval. Reducing emissions is now simply a part of the massive research, planning and reconstruction effort required to allow our 24 million people to survive our continent becoming uninhabitable by current standards. Class confrontation is inevitable. Firstly the rich are aware (most of us are not) that effective action requires the end of their class privileges and the hundreds of billions they loot from us every year just through tax and Budget giveaways. Secondly, they can profit from our disasters. Abandonment is the default policy of capitalism for those damaged by global heating. We need to calculate the extent of action by urgency, not the degree of lessening of denial. Nevertheless, denialists are to blame for their obstruction, so we should make sure that they are named and shamed – and blocked from any public position.
R. Ambrose Raven | 05 July 2019


There are quite a number of people in rural and regional areas of Australia who have forsaken the consumer ethos and are making their living by growing and selling flowers, who farm responsibly for the environment, who use skills such as woodworking and pottery. They are making a difference, most notably to themselves and their families. City folk take note.
Pam | 05 July 2019


Yes, Government has to lead and doing so requires decision making cross bench co-operation and a long term commitment to the implementation of objectives. Ze biggest problem is a system of parliament zat is based on political partisanship and a ruling elite zat is living in ze eighteenth century ya!?
Carmen Fraggenmeier | 05 July 2019


For a Green New Deal, consider what the Australian Greens want: 1. Net zero or net negative Australian greenhouse gas emissions by no later than 2040. 2. A leading role for Australia in negotiation of a multilateral emission abatement treaty which shares the burden equitably, recognising the proportionately greater historical and current contribution of wealthy industrialised nations to climate change. 3. Removal of all subsidies to the fossil fuel industry. 4. An orderly phase out of fossil fuel mining, fossil fuel based electricity generation and consumption of fossil fuels consistent with the emissions reduction plan. 5. A just transition to a net zero carbon economy through a range of mechanisms including a plan to replace fossil fuels with renewable energy through strong regulatory intervention and a strong effective price on carbon. 6. Binding national emission limits for each year through to 2050 supported by a well-funded, comprehensive, integrated and research-based emissions reduction plan with appropriate targets and reporting for all sectors with significant greenhouse emissions. Please go to the following linked article to read the other 30 things the Greens want in their efforts to help our climate: https://greens.org.au/policies/climate-change-and-energy
Grant Allen | 05 July 2019


Christy, Once again you have hit the proverbial nail on the head! R.Ambrose Raven, welcome to reality! Your summation is spot on. It is apparent that the current capitalist mantra of "jobs and growth" just cant work in a world of finite resources, anymore than the aspirational "American Dream "can. What inspires me is that our young people are raising their voice as they see a bleak future for themselves if we don't address environmental degradation and human induced climate change NOW! I wonder what level of disruption in the weather or the environment it will take to make those in power realise that the game is up? Sadly I think it is already too late.
Gavin OBrien | 06 July 2019


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