Richard Murphy – There is No Austerity in the Green New Deal

Many see a carbon tax as a solution to the climate crisis. This may not be the case as it will drag on the economy, which is flagging anyway. As we have seen in so many articles concerning the Green New Deal, it will be terminating austerity and investing in environmentally meaningful training, services, and infrastructure.

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

A worrying idea was put to me yesterday. This is that for many people the Green New Deal might simply be a new form of austerity.

One reason given was that many people think it would result in the introduction of carbon taxes, and these are regressive. That might be austerity by any other name. This is one reason why I am really not very keen on such taxes.

Another issue raised was based on the problems faced in France. You cannot begin to tax people’s mobility without giving them viable alternatives. No wonder when France tried to do this people took to the streets. I think the lesson has been noted: investment in new infrastructure has to proceed any restriction on use of the old.

There was also concern that the Green New Deal would take the fun out of life. Might it remove all holiday flights? No, not necessarily. But if you want to take them many times a year that could be another matter. In other words, the need for equity in any transition has been noted.

And will everyone have to be a vegan? Not that I am aware of. But food tastes may change – just as they have massively over my lifetime (thankfully).

I am not pretending that the world will be the same after a Green New Deal as it is now. That is not possible. Saying which, I mean it is simply not possible to replace current energy sources with renewable ones and diesel and petrol cars with electric ones and think that is somehow a Green New Deal. It won’t be. That’s just greenwash that will save us from nothing. In other words, to suggest that the Green New Deal will not create a little discomfort along the way is, I am afraid, not true. Those really stuck in their ways may not like all of it.

But let’s look at the upside too.

The Green New Deal aims to deliver jobs on a true living wage in every constituency of the UK.

And it will supply the training to let the Green transition we require happen. Which will mean more spending on local communities. And the creation of long term job opportunities for young people.

And there will be a lot of work for local small businesses.

All of which will spill over into revitalised local communities.

I would want to go further. I know I have problems with savings which withdraw money from the economy without offering resulting economic activity in exchange. But suppose the Green New Deal was funded by Green ISAs, backed by a Green Investment Bank and paying 3% a year – which is almost impossible to get anywhere, but which has almost no net cost to the government as a means of funding right now. Wouldn’t savers just love this? And wouldn’t moats or all of the £50 billion a year to pay for the Green New Deal then be financed at no likely net cost to the taxpayer? For those in doubt, £40 billion was saved in cash ISAs in 2017 / 18, and I am suggesting a market beating product.

And then let’s go a little further. Suppose there was a guarantee that the funds you saved would be invested in your area, and that you would be told how and when. How would that feel to the average saver – who gets a return and work and assets in the community in which they live and work? Wouldn’t knowing that beat any boring investment statement?

And is that austerity? I don’t think so. But we’re aware of this issue in the Green New Deal Group and our aim is to prevent any such thing as green austerity happening. Preserving life on earth should be anything but austere.

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1 Comment

  1. The Green New Deal report 2015 “A National Plan for the UK” does indeed expect that by the year 2050 nearly everyone in the UK should become vegan or vegetarian and that we should be using well under half the power we do now.

    The evidence trail begins at page 18 of its 2015 report as follows:-

    “The potential for the UK to go carbon free has most recently been extensively detailed by the Centre for Alternative Technology (CAT) in its report: ‘Zero Carbon Britain: Rethinking the Future’ [2013] from which much of the following is drawn. [footnote] 43 Available online.”

    The ZCB report states on page 82 that its 2050 scenario for a ZCB requires that “Agricultural GHG emissions are reduced from 63.4 MtCO2e to about 17 MtCO2e per year via a combination of dietary changes [etc.]” and “The amount of grassland required for grazing livestock is only a quarter of the area used today (2.8 million hectares (Mha)).”

    If circa 75% of the land now used for livestock is not used for livestock, then how does the UK produce enough meat & dairy for people who do not choose to become vegetarian or vegan in light of the fact that page 2 of the ZCB report claims its “research shows that we can […] meet our entire energy demand without imports”?

    The GND, by drawing on “much” of the ZCB report, also implicitly requires a circa 55% reduction in total energy generated and used in the UK by 2050.

    For 2010 the ZCB report states that the total energy generated in the UK was 2,535TWh per year with 1,750TWh per year demand (difference is losses) page 37.

    (Note that Wikipedia for 2014 gives 2,249TWh per year total UK “energy use”, i.e. between 2010 and 2014 the UK was heading significantly in the wrong direction).

    The ZCB report goes on to state that in “Our 2050 scenario: Renewable energy provides a primary energy supply before conversion losses of around 1,160 TWh per year, allowing us to meet 100% of a final energy demand of 770 TWh per year” page 55.

    Lets be clear: reducing 2,535 TWh per year (UK in 2010) to 1,160 TWh per year (by 2050 i.e. the ZCB scenario) is a 55% reduction in energy generation, shared between far more than the 66 million or so population in 2017.

    Attempting to persuade people to reduce their meat eating in the UK by 75% and energy use by more than 50% is politically impossible. No one will vote for it. Energy and food austerity is unacceptable to most people in the UK. The GND and the ZCB Britain report upon which “much” of the GND is based both need major philosophical changes to succeed.

    In particular nuclear energy is going to have to be considered – something the Chinese, Indian & Russian governments are fast pursing now. Within a decade or so these governments will be selling generation IV modular / molten salt / fast breeder designs globally to ‘basket case’ countries like the UK whilst we’re messing about with nowhere to store the intermittent output of renewables generators. The UK doesn’t have enough land for hydro storage, or bio fuels or solar power, and batteries storage is as expensive as a nuclear power fleet would be, the ideal complement to intermittent wind, which the UK does have.

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