Photo by Scott Webb on Unsplash. A picture of what I assume is a leaf. #Green

An Alternative Proposal to the Green New Deal

Civil servants and think tank employees have dedicated their lives to the practice of translating policy from idea to implementation. There’s hard work and dedication that goes into that. Out of that work came the Green New Deal (GND), a resolution cosponsored by Representative Alexandria Ocasio-Cortez and Senator Markey. Personally, I find issues with the current resolution’s feasibility, and I propose my alternative.

I see the original resolution as aspirational and a point to move forward from, rather than a serviceable path towards environmental salvation. Legislation should separate environmental goals from progressive goals thus sparing conservative criticism, and giving bills a chance to actually become law (of course, others disagree).

FDR’s original New Deal, from which the GND draws inspiration, was not one piece of legislation, but rather a collection that painted a cohesive policy vision. Currently, it seems that discussion of the GND focuses on passing all of the recommended proposals under one big umbrella bill. This is a faulty model. Instead FDR’s approach should be followed, giving politicians a chance to critique policy with specificity. Still, now is the time to panic, and so now is the time for drastic action.

In the creation of my plan, I’ve cribbed heavily from the ideas by Noah Smith and Ramez Naam (especially the “green” parts). Their articles on the subject are excellent. A core tenet of their plans is dedicated to lowering prices of fossil fuel free technologies and increasing their global adoption. This is critical to limiting the grave impacts of climate change. After all, if the US became a net zero emitter in the next 5 minutes, 85% of the world’s carbon emissions would still exist.

China is the biggest polluter. The US and EU are well past peak pollution. Image 1. Image 2.

Let’s start with taxes! A carbon tax is helpful and should be part of the portfolio. A Congressional Budget Office analysis, said that over 10 years, a carbon tax starting at $25/ton and raised incrementally by 2%, would net about a trillion dollars. Later analysis by Rhodium and explained by David Roberts show that we should start with at least $50/ton if we want it to have an impact. One issue is that both analyses show that carbon taxes are fundamentally regressive and hurt the poor more than the rich. We’ll try to reduce the effect of that with other taxes and domestic policy programs discussed later.

I’ll also cheat off of Elizabeth Warren’s homework and include her recent wealth tax proposal. The plan would “institute a 2 percent wealth tax on Americans with assets above $50 million, as well as a 3 percent wealth tax on those who have more than $1 billion … rais[ing] $2.75 trillion over a 10-year period from about 75,000 families, or less than 0.1 percent of U.S. households.”

A strengthened capital gains tax would also be ideal. At the very least let’s tax it similarly to income instead of giving it a discount. Plus, currently, inherited capital gains are only taxed on the the value after the inheritance. This lets fortunes be passed on easily and tax-free. For example, a son whose father bought a stock at $10 and left it to his son when the valuation was $20, would only be taxed on any growth past the $20. Let’s remove this so-called “stepped-up provision”. Remedying that loophole would have an extremely progressive effect, as typically only the wealthy store their money in the market.


Next let us repeal a highly controversial portion of Trump’s Tax Cuts and Jobs Act, the pass-through deduction. This provision allows certain small businesses and corporations to take a 20% deduction on their taxes. Returning the law to Obama-era rules would give us an additional $414 billion to work with over 10 years.

Let’s also strengthen the estate tax or as Republicans like to call it the “death tax”. I like what Clinton originally proposed during her campaign of returning the threshold for estates owned by couples to $7 million and marginally taxing any value above that at 45%. Estates above $1 billion should have value taxed at 65%.

Compare the totality of these values to the current spending and revenue shown below, and it becomes clear just how much more money there is to play around with. Also, we’ve already departed significantly from the GND by not completely relying on deficit busting Modern Monetary Theory (MMT). Per the spirit of the GND, let’s now transition to both progressive and environmental proposals.

FY 2019 Federal Revenue and spending. Sources: The Balance ; usgovernmentspending

Again, full credit for this next portion goes to Ramez Naam. His argument is convincing, and I want to include it in my work. Let’s create several research agencies to tackle the hardest sectors for reducing carbon emissions and model them after the existing Advanced Research Projects Agency- Energy (ARPA-E). Let’s found ARPA-A and ARPA-I for agriculture and industry. All of these agencies should have a budget of $30 billion / yr.

Furthermore legislation should incentivize the public, agriculture, and industry to adopt top-of-the-line technologies with tax credits. Private enterprises that seek to deploy the newly developed technologies should get tax breaks. Especially important is structuring them such that the companies utilizing new technologies in high emissions countries like China, America, and India are handsomely rewarded. Functionally, America ought to subsidize innovation and spread it throughout the world. That is what it will take to fight this battle.

The original GND didn’t discuss the positive impacts of density and urbanization which are key components to realizing environmentalism. Tackling sprawl by connecting city centers to suburbia with housing manages this fix. Luckily net-zero housing is here, though it is a bit more expensive. Give credits or write-offs to both buyers to buy them and construction companies to build them. Eventually, federal zero-emissions building codes should be implemented.

Retrofitting building infrastructure was a big point of conservative critique because of the expansiveness of the problem and short time scale for implementation. Still, it’s a preeminent issue for decarbonization. I say let’s follow both the time scale and implementation strategy of the building decarbonization coalition. According to them the greenhouse gas (GHG) emissions in the building sector should be reduced by 20, 40, and 100 percent by 2025, 2030, and 2045 respectively.

Building a smart grid is expensive and difficult, but imperative. We should aim to do it. An EPRI report suggests that it would cost between $338 billion to $476 billion over a 20 year period. A smart grid would also more easily enable expansion of electric vehicle charging infrastructure.

Chart showcasing cost and potential of carbon storage techniques. Source

Reforestation and afforestation practices are critical, since they are relatively cheap ways to sequester carbon. Especially with Bolsanaro in Brazil threatening the Amazon with deforestation, planting trees seems like a minimum requirement. As per the graph above, storing carbon in the soil is also a great move for carbon sequestration. Whether we’re burying in it in the ground or in trees or however, carbon capture and storage of some form is crucial to meeting climate change targets.

Now for some of the domestic policy portions. I’m a fan of expanding pretty much all of the entitlement programs we currently have. I have reservations about funding social security expansion the way Bernie Sanders proposes in terms of raising the cap on payment. That’s not how other countries do it, and the US is actually an outlier. Instead, the estate tax I mentioned earlier should help fund the expansion. For the social security expansion, use the consumer price index for the elderly (CPI-E) instead of the consumer price index for urban wage earners and clerical workers (CPI-W). Using this in the formula this should increase monthly payout, as was part of the Social Security 2100 Act pitched by Representative John Larson.

For healthcare let’s implement the Kaine-Bennet Medicare-X bill which allows a new government plan the ability to compete on the market. Brian Schatz’s Medicaid buy-in is also an option, but for me, a bit of a lesser one. While underselling the complexity, that functions similarly to voluntary state-based expansion under the ACA. Both of these bills would go very far towards establishing a public option. Either would ensure that the millions of people currently insured through their employer can keep the plans that they are happy with. Remember, support for Medicare for All tanks when it is explained that it wouldn’t allow people to keep their current health insurance. Let’s also remember that in 2011 single payer health care failed in Vermont when a massive tax hike and cancellation of private plans painted political and practical doom.

Support for Medicare For All drops precipitously when Americans realize they will have to pay more taxes and will lose their private insurance. Also, most democratic voters want congressional democrats to focus on improving and protecting the ACA rather than focusing on Medicare For All. Source

The Earned Income Tax Credit (EITC) is one of the biggest and empirically best anti-poverty programs in the country. Let’s lift 700,000 workers out of poverty for a cost of $95 billion over 10 years by expanding the credit for workers with no children. A much more expansive version of this plan is the Brown-Khanna proposal at a cost of $1.4 trillion over 10 years. Now even as someone who likes delving into the weeds there are so many tables to understand the proposed funding of this bill, that I gave up. Instead, I will stick to the much more friendly charts that explain what the policy actually is. Look at all those great effects below! Let’s make them happen!

The Brown-Khanna EITC expansion is a huge program with huge benefits. Source.

Finally, Washington DC has access to free universal preschool, and that policy should be implemented federally. The policy has been a resounding success, raising workforce participation of women, and alleviating some of the massive financial burdens of childcare. This is another area that Elizabeth Warren is leading on. Her policy means that no one would have to spend greater than 7% of their income on childcare. It’s a good one.

And that’s it. So here’s the full policy slate:

This agenda itself is extremely ambitious. It might require the entirety of a two term presidency to pass. Considering that, remember that the original GND has a jobs guarantee. It also wants to upgrade all of the infrastructure in the country in 10 years. It wants to build high speed rails in a country where railway projects are expensive and hard because of a combination of excessive regulation and geography. It wants to “provide all people of the United States with economic security” without mentioning any feasible way to make it possible. It wants to do all these things without any mention of taxation to raise the funds.

It wants to do all this with a “ transparent and inclusive consultation, collaboration, and partnership with frontline and vulnerable communities, labor unions, worker cooperatives, civil society groups, academia, and businesses”. How often can a single coalition be in consensus, forget about every one? Passage of any legislation tackling these problems will require affronting some people and harming some people. It’s folly to believe that the only people who will suffer are the rich or corporations.

The GND is aspirational. It isn’t functional. Often to critique something, people ask “What’s your alternative?” or “What’s your solution?”. I’ve put forth my proposal. Do with it what you will.