The Global Green New Deal
Book Review: Climate Crisis and The Global Green New Deal — Noam Chomsky and Robert Pollin
In a new book Climate Crisis and the Global Green New Deal, Noam Chomsky and Robert Pollin set out the key facts on the accelerating climate crisis, the role of capitalism in contributing to climate change and the need for effective collective action. They discuss how a Global Green New Deal might be funded in order to achieve zero green house emissions by 2050, highlighting the political mobilization necessary to do so.
The discussion framed by questions posed by political economist / scientist C.J. Polychroniou centers around four themes — the nature of the climate crisis, the relationship between capitalism and the climate crisis, a global green new deal, and the political mobilisation necessary to succeed.
Here are the highlights.
The Nature of Climate Change
The book opens by highlighting the existential danger the climate crisis poses with Chomsky highlighting the urgency and uniqueness of the situation, remarking “the threat of destruction of organized human life in any recognizable or tolerable form …is entirely new.”
Atmospheric CO2 is at levels last seen four million years ago and rapidly rising to levels last seen fifty million years ago (when temperatures were 14°C higher than in preindustrial times) with the Intergovernmental Panel on Climate Change (IPCC) warning in 2018 that carbon emissions must be reduced within the next eighty years in order to avoid terrible and irreversible consequences with one of the co-authors of the IPCC report, Raymond Pierrehumbert, warning that:
“With regard to the climate crisis, yes, it’s time to panic…We are in deep trouble.”, concluding “there is no Plan B”.
And yet, Chomsky and Pollin note how global policy consensus to date has not taken the crisis seriously enough with Nobel prize-winning economist William Nordhaus remarking in his Nobel acceptance speech in 2018 that the risk of global warming reaching temperatures 4°C higher than pre-industrial levels was “optimal”. Chomsky argues such views demonstrate that maintream economic and market positions on the climate crisis are ‘morally bankrupt’.
Capitalism and the Climate Crisis
Referencing the argument former World Bank chief economist Nicholas Stern made back in 2007 that climate change is the result of the greatest market failure the world has seen, Chomsky highlights how oil giants Exxon and Shell already had conclusive evidence in the 1980s that at current rates of fossil fuel burning global warming would reach 2°C above preindustrial temperatures by 2060, but that they chose to bury the damning research, remarking the
“companies behaved in accordance with the precepts of neoliberalism -they acted to protect their profits.”
He goes on to argue that neoliberal economics leads to public subsidy and private profit, meaning companies have little incentives to take on board the financial risks of investing in measures to counter climate change. Chomsky credits rises in public pressure, including the global Climate Strike, to impacting the changes in position of many CEOs, such as Amazon’s Jeff Bezos who announced the creation of a $10 billion dollar Earth Fund following the airing of a documentary that questioned Amazon’s impact on the environment and news that the company may have threatened employees with termination for participating in a Climate Strike walk out.
A Global Green New Deal
The discussion in the later half of the book focuses on the necessary political measures to ensuring a viable global initiative to address the climate crisis. Robert Pollin argues that a Green Global New Deal would create jobs and stimulate economic growth, providing “an explicit and viable alternative to austerity economics on a global scale.”.
He contends that while energy consumption is currently 84% sourced by fossil fuels and nuclear energy, the cost of shifting away from unsustainable, polluting and potentially hazardous energy sources would not be as costly as most believe it would be, citing that while untapped fossil fuels account for an estimated $3 trillion in revenues for fossil fuel companies, this is less than 1% of global private financial assets ($317 trillion in 2019).
A plan to reduce consumption of fossil fuels progressively could amount to asset losses of $100 billion a year, or 0.03% of the global financial market. This amount is negligible Pollin argues if we compare these losses to the unprecedented depression of asset values following the 2008 financial crisis of $16 trillion.
Pollin goes on to propose a global Green New Deal that would require funding of $120 trillion over a period of 27 years, and ideally comprise a 50–50 split between public and private financing. This would amount to an annual investment of around 2.5% of global GDP.
Chomsky and Pollin set out four avenues for financing the global transition to sustainable energy, notably: 1) a progressive carbon tax, to be rebated to the public (75%) and investment in clean energy (25%), 2) transfers from existing military budget expenditure, notably the US, where $1.8 trillion is spent annually on defence, 3) a $300 billion dollar global Green Bond initiative, to be financed equally by the US Federal Reserve and the European Central Bank, and 4) the elimination of fossil fuel subsidies, which amounted to $3 trillion in 2015.
Political Mobilisation
Pollin stresses that any plan must include provisions for job security, notably for the transition of workers from the fossil fuel industry, remarking, “A commitment to full employment should be understood as fully consistent and supportive of a global Green New Deal”. Other measures include afforestation to reduce the impact of the level of green house gas levels already in the atmosphere.
A quick and informative read that will hopefully help to mobilize the necessary international political support needed to ensure a comprehensive framework (with binding government commitments) is agreed on during the (COP26) conference in Glasgow in November, 2021.
