26 Apr 2019
Humanity’s effect on planet earth is so significant that we have collectively ushered in a new geological age. In this new “Anthropocene” era – or age of humans – we as a species are recognised as the single most important factor in climate change. It draws to an end the ~12,000 year Holocene era of stable and predictable climate.
The impacts of human activity are felt in many areas. Air pollution, deforestation, species extinction, soil degradation, and coral bleaching - to name a few – are unfolding at a bewildering pace in a planetary context and putting the world’s population at risk. Action to both mitigate the impacts and adapt to the changes is inevitable. While consumers are increasingly aware of the need to change, and the power of voting with wallets is increasingly relevant1, public policy will be crucial in setting the right framework for societal and economic activity.
Fifty-four countries around the world have now announced plans to make their power 100% renewable. Some others have committed to change of a similar magnitude. France confirmed a draft energy plan that would double its renewable energy capacity to 113GW by 20282. Electric car sales have grown to half Norway’s total3. Several Chinese cities have replaced all of their diesel buses with electric equivalents over the last couple of years.4
Source: Weforum, CS1369
However, nowhere has yet put together a complete package of change, nor attempted change on the same scale, as that proposed by the US’ Green New Deal.
The Green New Deal (GND) is a stimulus package aiming at completely overhauling the US’ existing energy production, manufacturing, and transportation system within the next 10 years, including sourcing 100% renewable energy5.
In addition to environmental policies, the GND also targets poverty, unemployment, and inequality, with included proposals ranging from re-training and education programmes, to federal job-guarantees, investments focused on low-income communities and even basic income and universal healthcare programmes6. It implies radical change to the way the US economy functions.
While unlikely to pass in its current form, the resolution has so far accumulated 91 cosponsors in the House of Representatives7 and provided a focal point for enthusiastic support from large parts of civil society. Given the nature and scale of the resolution, critics have outlined numerous arguments as to why the GND in its current form would not succeed, including the associated costs, its complexity, and overly optimistic time horizons. Consequently, it remains to be seen how or if the GND will overcome the political and practical hurdles it must to move ahead.
That said, the same considerations were raised when President J.F. Kennedy announced plans to put a man on the moon in the 1960’s. And that project was optional, rather than driven by impending threats to the planet.
Andrew Howard, Head of Sustainable Research at Schroders, believes that however it does materialise, governments will be challenging both the private and public sectors to address climate – as well as many social – concerns.
“For most of the last 70 years, companies were able to operate by pushing a lot of the costs created by their products, services and operations onto society. We are seeing a response and a rebalancing. Since the financial crisis, voters have given governments a stronger mandate to regulate irresponsible corporate behaviour. Companies are being forced to internalise costs they previously pushed onto society. More and more of companies’ unpriced social impacts will become priced financial impacts.”
As such, even if it is not the GND, a policy of similar scale will have to be implemented at some stage in the future.
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1. https://www.schroders.com/en/insights/economics/the-material-consequences-of-choosing-sustainable-fashion/↩
2. https://renews.biz/51198/france-confirms-draft-clean-power-plans/↩
3. https://www.bloomberg.com/archive/news/articles/2019-04-01/tesla-mania-means-over-half-of-norway-car-sales-are-now-electric ↩
4. https://www.weforum.org/agenda/2018/04/china-is-adding-a-london-sized-electric-bus-fleet-every-five-weeks/↩
5. www.greennewdealgroup.org↩
6. https://qz.com/1493569/whats-a-universal-basic-income-doing-in-ocasio-cortezs-green-new-deal/↩
7. https://www.congress.gov/bill/116th-congress/house-resolution/109/cosponsors↩