Green New Deal Estimated to Save the US $100B by 2050
On December 10th over 1,000 activists, organizers, and students associated with the Sunrise Movement and backed by hundreds of other environmental and social advocacy groups staged sit-ins at the United States Capitol and the offices of Democratic Party leaders to advocate for a select legislative committee to draft a Green New Deal. 143 were arrested. Over the next 24 hours, support for the initiative increased among US House representatives by 41%.
Popularized by the Green Party and styled after FDR’s original New Deal, the Green New Deal is a public infrastructure investment designed to create millions of jobs in order to rapidly transition the US economy to 100% renewable energy. Millions of citizens across the country have expressed their support through demonstrations, petitions, and social media. As the movement for a Green New Deal gains momentum, expect to repeatedly hear critics and pundits ask, “How will we pay for it?”. The answer is simple- it pays for itself.
Dr. Mark Jacobson of Stanford and the Solutions Project has been crunching the numbers for more than a decade. His team has laid out a state-by-state plan to reach the 100% goal by 2050- far more ambitious than the targets proposed by the Paris Climate Accord. Their estimates calculate that by 2050, the plan would actually save the US $304.40 per capita on energy costs alone. This scales up to a national savings of just over $100 billion USD. When we consider the external health and climate mitigation costs avoided, we’re considering an additional $8,316 per capita. That’s another $2.7 trillion nation-wide. Total projected savings by US citizens on energy and externalities amount to roughly $2.8 trillion.
All this, however, is not to say that the infrastructure required to actualize such a plan would not require significant overhead investments. We will need to build the solar plants, the wind turbines, and the electric vehicles before we can get there. There are two ways to fund these investments. First, we could pass a stimulus package like we did with the original New Deal or the Wall Street bailout, although a Green New Deal would be far less costly than the latter. While politicians who represent fossil fuel interests will tell us otherwise, we must keep in mind that there is no reason for this to involve a tax hike because federal expenditures are not tied to tax revenues (see: pentagon). However, even if it did, the plan is estimated to pay for itself in health and climate mitigation savings in as little as 3.2 years. As if this weren’t already an excellent deal, we could significantly reduce the overhead expenditures by simply redirecting fossil fuel subsidies and tax exemptions to renewable energy.
In 2015, federal and state governments of the US infused roughly $43.2 billion into fossil fuel corporations through subsidies and tax exemptions (20.5 in production subsidies, 14.5 in consumption subsidies, 4.7 in corporate tax breaks, and 3.5 in external tax exemptions). Subsidies continue to increase. We are at a point where taxpayers are made to finance structures to hide drills in their neighborhoods and seawalls to protect refineries from climate-induced storm surges. Even more ironically, all of these subsidies and exemptions aggregate a staggering negative return on investment. Both the coal and methane industries are currently operating cash flow negative, meaning that investments exceed profits. Per equivalent energy production, it is now cheaper to build a new wind farm than to operate an existing coal mine. In light of these patterns, many free-market and marginally green-minded economists have suggested simply ending subsidies or taxing fossil fuels. This, however, will not address the crisis in sufficient time to avert the catastrophic climate consequences predicted with a global average increase of 1.5 degrees C. Our plan must be bolder. We must redirect subsidies in order to stimulate renewable energy to at least the same financial degree as we have sponsored fossil fuel. The Green New Deal must address the climate crisis on all fronts and it must do so with equity and justice for all.
The US model offered by the Solutions Project is estimated to create over 4 million 40-year-long jobs and millions more shorter-term opportunities. It creates a diverse and decentralized energy infrastructure- far more resilient to the hurricanes, fires, earthquakes, and floods we will increasingly see as warming progresses. It is economically and environmentally sound. It is inevitable. It is an excellent framework for the Green New Deal and a critical roadmap to a brighter, more equitable future.
