Richard Murphy – The Washington Post is leading the right wing backlash to the Green New Deal, and have got almost everything wrong

Here they come again, neo-liberal corporate and state media in their newest offensive against anything progressive. The new target is the Green New Deal. Of course – as usual – the market will take care of climate change. Look at what “the market” is currently doing, not only to the environment.

Richard Murphy is Professor of Practice in International Political Economy, City University of London. He campaigns on issues of tax avoidance and tax evasion, as well as blogging at Tax Research UK

Cross-posted from Tax Research UK

The right-wing backlash against the Green New Deal has begun, most especially in the USA. The Washington Post ran a lengthy editorial yesterday making clear its opposition to the Green New Deal. It said:

WE FAVOR a Green New Deal to save the planet. We believe such a plan can be efficient, effective, focused and achievable.

The Green New Deal proposed by congressional Democrats does not meet that test. Its proponents, led by Sen. Edward J. Markey (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), are right to call for ambition and bold action. They are right that the entire energy sector must be reshaped.

But the goal is so fundamental that policymakers should focus above all else on quickly and efficiently decarbonizing. They should not muddle this aspiration with other social policy, such as creating a federal jobs guarantee, no matter how desirable that policy might be.

And the goal is so monumental that the country cannot afford to waste dollars in its pursuit. If the market can redirect spending most efficiently, money should not be misallocated on vast new government spending or mandates.

The rest is fairly predictable. Most especially they believe that carbon taxation is the route to the Green New Deal, saying:

[C]arbon pricing is still the best first-line policy.

Theory and practice confirm this unassailable point: If it costs more to pollute, there will be less pollution. Taxing all fuels according to their carbon content would send a price signal to every business and every consumer. Habits that pollute would become more costly. Changes that reduced pollution — generating cleaner electricity, buying more efficient appliances, weatherizing homes, investing in smart thermostats — would become more desirable.

A high-enough carbon price would shape millions of choices, small and large, about what to buy, how to invest and how to live that would result in substantial emissions cuts. People would prioritize the easiest changes, minimizing the costs of the energy transition. With a price that steadily rose, market forces would steadily wring carbon dioxide out of the economy — without the government trying to dictate exactly how, wasting money on special-interest boondoggles.

If only it were so easy. Apparently when it comes to carbon tax is just a matter of point and shoot. It’s almost as easy as video gaming according to the Washington Post.

But we know this is not true. At almost every level this logic fails. First of all, we know that pricing does not change demand perfectly. Alcohol and tobacco prove it. So too does existing carbon pricing on oil: it has not stopped demand. In other words, this comment fails to take such factors (elasticities as economists call them) into account. So theory and practice do not prove this point. They prove the exact opposite, if anything. It is only regulation that will change demand for carbon: pricing will not, and most certainly cannot on its own.

And what we also know is that simply reprofiling what we do now – business as usual with carbon offset, you might call it – is not enough. The change that the Green New Deal demands is not doing things just a little bit differently. This is about fundamental change. Nothing less will eventually do. It’s shocking, but it’s true: if we are to save the planet a little bit of tax is not going to effect the changes that are needed. Whole lifestyles, industries, modes of production and ways of living have to change.

And in that case to pretended that there is no social change resulting as a consequence – which is the idea implicit in the Washington Post piece – is just wrong. The social changes required will be enormous. How we work. What we do. How we get to work. What we consume. What we eat. How we holiday. And so much more. All these things will be fundamentally different in a Green New Deal world. And if that is the case to pretend that consideration of the consequence of such change is not a part of the Green New Deal is just wrong. The fact that the Green New Deal includes provision for those changes is not some sort of tack on as the Washington Post implies: they are fundamental components of the process that secure buy in, make it possible, and deliver the real outcome that is needed, which is a sustainable economy.

In that case this flippant paragraph be used to dismiss these concerns of the Washington Post approach:

Another criticism is that carbon pricing hurts the poor, who would suffer most when prices rose. But the revenue from carbon pricing could be recycled back to Americans in a progressive way, and most people would end up whole or better off.

No one believes that trickle down does or will work. And no one believes that those who promote carbon tax really believe in redistribution of the proceeds. Nor, very obviously, have they thought this through because if they had they would realise that what they are saying is that they are planning no net change in consumer spending power, in which case the price signalling they say that they are relying on will have minimal or no effect given the inelasticity of demand for carbon based products, which destroys their whole argument.

The Washingtomn Post says it is serious about climate change. And it says it is very committed to a Green New Deal. Its arguments, its theories and their underlying logic evidence none of that. I am open minded about how to achieve the Green New Deal. But I have no time for those who seek to undermine it with false arguments, and that is what the Washington Post has offered.

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