WHAT IS A GREEN NEW DEAL? 

 

A Green New Deal is a political concept that aims to significantly accelerate the ecological transformation of our economic system and carry it out in a socially just way. The basic assumption of a Green New Deal is that there must be no contradiction between effective climate protection, social justice and economic prosperity - on the contrary, these three goals can only be achieved together.

To achieve them, however, it is necessary for the state, as a powerful representative and executor of democratically negotiated public interests, to intervene in the economy in a guiding and formative way, to set clear rules and create material opportunities so that sustainable private economic activity can flourish.

What the state can do:

The state has both the institutional and financial capacity to actively shape economic activity in a positive way. It can decide

  • to what extent private property may exist and how it may be used.
  • how income and wealth of society as a whole are distributed
  • which economic activity is permitted and which is prohibited
  • which economic activity is supported by subsidies and which is made unattractive by taxes and duties.

Since, unlike a private household, the state is not a currency user, but a currency issuer, it does not need any revenue to finance its expenditure, it can spend far more money than it receives through taxation without burdening future generations or restricting its financial leeway in the future. 

If you want to learn more about our view of the state´s role in the economy click here. 

 

Proponents of a Green New Deal argue that for the reasons explained above, the state can do much more than it is currently doing to secure our lives, our freedom and our prosperity. The following policy proposals present you with a selection of ideas that various Green New Deal campaigns have put forward in the past:  

Climate Policies
  • Make sure that investing in sustainable projects is much cheaper and, thus, more profitable than investing in the fossil fuel economy

  • Change accounting rules so that the negative externalities of fossil value creation have to be reflected as costs in companies' balance sheets

  • Expand climate-friendly mobility and make it affordable for everyone 

  • Align the emissions cap in the European emissions trading scheme to more ambitious, Paris-compliant reduction paths.

  • Create a right to repair goods 

  • Invest much more in the research and development of sustainable technologies and production processes

 

Social Policies

  • Immediately reduce unemployment to zero with a public job and training guarantee and ensure that no one is left behind in the necessary structural change of the economy

  • Decree that employees participate directly in the decisions of their companies and get a part of the companies profits 

  • Create affordable new sustainable housing without having to wait for private companies to be willing to invest 

  • Return the revenue from carbon pricing progressively to households 

  • Support countries in the global South with technology transfers and financial support for their own green transformation 

 

Economic Policies

  • relocate strategic value creation in the country to promote the resilience of the domestic economy in the face of geopolitical tensions and secure the green transformation 

  • build an innovative, efficient electricity grid for a 100% renewable energy supply

  • reduce decarbonization costs for private companies that want to switch to fossil-free production methods

  • massively support the energy-efficient refurbishment of buildings so that the building stock is modernized quickly without additional burdens for tenants and owners 

 

In order to utilize this potential for progressive policies, the relationship between the state and the market, between public and private economic activity must be recalibrated. A sustainable economic system must break out of the bipolarity between unbridled market radicalism and inefficient bureaucratism. We need a system that strengthens cooperation despite using the power of market competition, that combines market-based economic activity with three questions that sound almost nostalgic in our neoliberal society, but are nevertheless essential for the future of humanity:

Does it serve people?

Does it serve the environment?

Does it serve peace?

The Green New Deal is a vision for such an economic system in which the state and the private sector unite behind a common mission - the mission of bringing about a rapid, socially just transformation to save our planet, our freedom and our prosperity. 

If you want to learn more about the mission-oriented approach to policy making, click here.

 

The need for a well thought-out, scientifically based Green New Deal is greater than ever. Our initiative "Mission Fair Transition" aims to make a contribution to the further development and dissemination of a Green New Deal.

The history of the idea of a Green New Deal

Historically, the idea of a Green New Deal ties in with the New Deal policy in the USA, with which the Roosevelt administration attempted to pull the country out of the economic crisis of the 1930s.

 

The New Deal consisted of several different programs. The central employment programs were the Works Progress Administration (WPA) that employed 8 million workers and the Civilian Conservation Corps (CCC) that provided an additional 3 million jobs, where employees planted trees and built public parks, hiking trails, vehicle bridges, reservoirs and fences.

 

 The first idea for a Green New Deal came from the United Kingdom, where a group of progressive economists proposed a package of financial reforms and a fiscal stimulus, aimed at a massive conversion to green energy. In 2008, UN officials also proposed a Green New Deal to pull the world economy out of the incipient Great Depression and the European Greens set up an EU-GND movement. But once it became clear that a complete economic collapse had been averted, the fever broke and enthusiasm for a GND tapered off.

 

After Donald Trump took office in the United States in 2016, several climate action groups and political initiatives started to put forward concepts for a Green New Deal and other policy programs to ensure that individual cities or states would continue to cut emission even though the Trump administration had withdrawn from the Paris Climate Agreement. America´s Pledge, the U.S. Climate Alliance and U.S. Climate Mayors are the most popular among them. In 2017 the US senators Sanders and Merkley introduced the 100 by 50 Act to the Congress, the first plan to reach net zero in the United States.

 

In 2018, researches from the team of congresswoman Alexandria Ocasio-Cortez went to the UK to discuss the Green New Deal with economist Ann Pettifor, a member of the 2008 campaign. The groups Data for Progress and New Consensus published a detailed GND plan for the USA. In the 2018 congressional elections the Sunrise Movement set out to support climate friendly Democratic candidates. After the election they tried to impose pressure on Congress to support a Green New Deal for the United States.

 

In the EU, the movement for a GND regained momentum in connection with the 2019 European elections. The pan-European party organization DiEM25 initiated a consortium of scientists and activists who developed a detailed GND plan for the EU, the Blueprint for Europe's Just Transition. The Austrian Social Democratic Party (SPÖ) also included a Green New Deal in its European election campaign.

 

Since the 2019 European elections and the election of President Biden in 2020, the campaigns for a Green New Deal have lost momentum. With its Green Deal, the EU has presented a concept that is similar to the Green New Deal in parts, but falls short of its level of ambition overall. Even if the von der Leyen Commission has taken decisive steps forward in climate policy, the EU Green Deal lacks ecological ambition, social support and fiscal power. It only partially corresponds to a "mission-oriented" policy.

"The GNDE concept offers comprehensive options for overcoming the global crisis, i.e. finding a politically, financially and socially feasible way out of the global crisis that is oriented towards the common good."

Günter Grzega 

Financial market expert, Ambassador of the Economy for the Common Good Movement and Former Chairman of the Board of Management of Sparda-Bank Munich eG