The narrative surrounding the Green New Deal championed by climate activists in the US and the UK is one of sweeping action to address the climate crisis, huge government investment in public infrastructure, and repairing the historical harms of communities disproportionately affected by pollution and climate change.
But how specifically does the Green New Deal unleash itself from the imperatives of our current political economy—the constant need for growth, the resource (and often colonialist) extraction, the firm corporate grip on the body politic—and move towards an economy based on democracy, justice, and sustainability? That’s what we sought to investigate in our recent report on internationalism and the Green New Deal out with the think tank Common Wealth.
One strategy is clear: the transformation of the energy sector through public ownership. Specifically, this means tackling the issue of fossil fuel extraction by prompting a federal buyout of the fossil fuel majors, engaging in regional planning and enterprise to shepherd a just transition for communities and workers, and kicking out a fossilized investor-driven energy system and replacing it with a system of energy democracy.
Despite the bold ambitions of the Green New Deal resolution presented in Congress earlier in 2019 by Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ed Markey (D-Mass.), the crucial missing piece is a supply-side plan to stop fossil fuel extraction. This is by no means exclusive to the Green New Deal: the Paris Agreement fails to mention fossil fuels altogether.
To stay within a 1.5 degrees Celsius world and avoid climate catastrophe, close to 85% of all known fossil fuel reserves need to stay in the ground. That would require securing public control of existing private (and already leased public) fossil fuel reserves.
The most timely way to do that is through a national buyout of the top publicly traded fossil fuel companies, using the tool deployed during the 2008 financial crisis known as quantitative easing (QE). Through QE, the Federal Reserve was able to create over $3.5 trillion between 2008 and 2014, which was then used to bail out banks, insurers, and even the automobile industry—all without burdening taxpayers or spurring runaway inflation. Likewise, the Bank of England created almost half a billion pounds in order to stabilize its banking sector.
For less than a third of the cost, these central banks could accomplish something much more transformative by buying out the majority of fossil fuel companies’ publicly traded shares and securing control. Answerable to the public and without the growth imperative, the government would be much better poised to manage the winding down of existing and planned fossil fuel extraction and production, as well as stopping new developments that are clearly outside the carbon budget. This would also deliver a much-needed knockout blow to the entrenched political interests of fossil-fuel CEOs and shareholders that would reverberate across the globe, clearing the path for governments—in direct consultation with affected workers and communities—to design, build, and govern a genuinely just transition.
We can find a historical example in the original New Deal. Former US President Franklin D. Roosevelt created the Tennessee Valley Authority in 1933 to electrify rural America and to serve as a major jobs initiative. Today the TVA is the largest public power company in the US, still serving many of the surrounding states with electricity. The TVA’s history is tied to racial discrimination, but we could imagine a series of locally controlled regional authorities with a different outcome: communities co-creating plans for decarbonizing and revitalizing their local economies, with racial equity at the center.
That requires laying the groundwork for the next renewable energy paradigm of “energy democracy.” The commitment to a community-controlled and just renewable energy system is gaining momentum. The major structural impediment is for-profit energy utilities. In the last couple of years, however, communities fed up with political power plays and climate inaction have led a surge of utility takeover campaigns. They range from local, such as an effort in Boulder, Colorado to take the utility into the city’s hands and the Switched On London campaign, to transatlantic, such as the “#NationalizeGrid” campaign against National Grid, a UK for-profit company operating in both “New” and “Old” England. The Labour party has taken this vision even a step further with a proposed full takeover of “the Big Six” energy utilities in the UK.
These efforts also have a precedent in the original New Deal. When investor-owned utilities refused to bring electricity to rural areas, the Rural Electrification Administration provided patient capital along with legal and technical expertise so farmers and communities could band together and start their own electric utility cooperatives or public enterprises.
A similar national-level entity—the Community Ownership of Power Administration—could be created today to deploy much-needed financing and capacity-building to design and build publicly run energy utilities. Municipalities, regions, or whole states or provinces could take the reins from their for-profit utilities and, based on energy democracy, invest on such priorities as energy efficiency, shared sustainable energy infrastructure, and good jobs to do it all.
The UK, which birthed the coal-fueled Industrial Revolution, and the US, historically the world’s leading carbon emitter, must recognize their duty to rapidly decarbonize and untangle the web of historical harms caused by the exploitative economic conditions that they imposed around the world.
Choosing incrementalism over radical action is to choose a path of economic and climate chaos. The alternative, a US-UK transatlantic coordination on Green New Deal policies that move toward energy democracy, could positively change the foundations of both economies.