Green New Deal: Policies to prevent climate catastrophes

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  Quantumrun Foresight
• June 12, 2023

Insight summary

As the world grapples with the climate crisis, many countries are scrambling to implement preventative measures to curb greenhouse gas emissions and reduce the risk of catastrophic climate change. While green deals are seen as a step in the right direction, they come with challenges and drawbacks. For example, the cost of implementing green technologies and infrastructure can be prohibitively high for many countries, and there are concerns about the impact of these measures on jobs and economic growth.

Green new deal context

In the European Union (EU), the Green Deal requires making 40 percent of energy resources renewable, making 35 million buildings energy-efficient, creating 160,000 eco-friendly construction jobs, and making agricultural practices sustainable through the Farm to Folk program. Under the Fit for 55 plan, carbon dioxide (CO2) emissions are targeted to decline by 55 percent by 2030. A Carbon Border Adjustment Mechanism would tax carbon-intensive goods entering the region. Green Bonds will be issued as well.

In the US, the Green New Deal has inspired new policies, like shifting to renewable electricity by 2035 and creating the Civilian Climate Corps to battle unemployment through green job creation. The Biden Administration also introduced Justice40, which aims to distribute a minimum of 40 percent of returns on climate investments to communities bearing the greatest brunt of extraction, climate change, and social injustices. However, the infrastructure bill faces critique for the significant amount of budget allocation to vehicle and road infrastructure compared with public transit. 

Meanwhile, in Korea, the Green New Deal is a legislative reality, with the government stopping its financing of overseas coal-fired plants, allotting a significant budget to building reconstruction, creating new green jobs, restoring ecosystems, and planning to reach zero emissions by 2050. Japan and China have stopped overseas coal financing as well.

Disruptive impact 

A big criticism of these deals is that they rely massively on the private sector, and none address major international issues like the impact on the Global South, indigenous populations, and ecosystems. Overseas oil and gas financing is scarcely discussed, leading to significant criticism. It has been argued that the governments announcing these green policies have not allocated sufficient funds, and the promised jobs are meager in number compared to the population count. 

Calls for increased collaboration between public and private sectors, political parties, and international stakeholders will likely ensue. Big Oil will see a decrease in investment and government financial support. The calls for shifts away from fossil fuels will increase investment into green infrastructure and energy and create related jobs. However, it will put pressure on resources like lithium for batteries and balsa for turbine blades. 

Certain countries in the Global South may limit the amount of raw materials they allow the North to extract to protect their indigenous communities and landscapes; as a result, rare earth mineral price inflation may become common. The public will likely demand accountability as these deals are rolled out. Stronger versions of green deals in legislation will be pushed where environmental and economic injustice toward underprivileged communities may be better addressed.

Implications of the Green New Deal

Wider implications of the Green New Deal may include: 

• Increased prices of carbon as governments plan to reduce subsidies.
• Shortages of many raw materials needed to create sustainable infrastructure.
• A loss of biodiversity in areas where resources for renewable infrastructure are mined.
• Creation of regulatory bodies with stronger authority over environmental and infrastructure investment policies.  
• Conflicts across countries as they attempt to minimize their carbon emissions while financing overseas nonrenewable power production.
• The reduced pace of global warming, potentially reducing the likelihood of more frequent and severe weather events.
• The potential to create millions of new jobs in industries related to renewable energy, sustainable agriculture, and green infrastructure, especially in communities that have been historically marginalized or left behind by traditional economic development.
• Reduced reliance on oil-producing nations like Russia and the Middle East, allowing other national economies to establish their renewable energy production hubs.
• The Green New Deal raising labor standards, ensuring that workers in green industries are treated fairly and have a voice in shaping the transition to a sustainable economy.
• The Green New Deal revitalizing rural communities and supporting farmers in transitioning to more sustainable practices. 
• A politically contentious issue environment, with many conservatives criticizing green plans as too costly and radical. 

Questions to consider

• Do you think the current attempts at green new deals are merely shifting misery from one part of the world to others?
• How can these policies adequately address social, environmental, and economic injustices?