Deconstructing The Green New Deal

The Green New Deal (GND) is important as a starting point to have a long, long overdue conversation about energy. Specifically: How are we going to eventually transition away from fossil fuels?

As such, the proposal -- while (very) far from perfect -- should not be ignored and deserves our attention.

It's also important because it represents the sorts of zig-zags our social and political paths are inceasingly likely to take in the coming future as we're forced to face our looming economic, ecological and energy-related predicaments.

A Symptom Of A Global Disease

The GND is emblematic of the same pressures that brought about the election of Trump, the Yellow Vests in France, Brexit in the UK, the Catalonia breakaway in Spain, the rise of populism in Italy, and the fracturing of the Middle East.

Growing numbers of people are beginning to understand that the outbreak of these social movements share a common cause: the loss of sufficient economic growth to fund both the upper and lower stratas of society.

There simply isn’t enough "growth" left for everyone to share in it. Surplus economic production requires surplus net energy. As we've been chronicaling for years, there’s now less and less of that to go around.

And because the wealthy won the class war a long time ago, anemic economic growth combined with a bought-and-piad for political system translates into less and less for the many and more and more for the few.

That is an explosive mix. Eventually it will prove to be the end of ‘good old days’ unless it is self-corrected extremely soon -- though don't hold your breath. There are precious few historical examples of the wealthy figuring out in time that they’ve gone too far, assumed too much, and shared too little:

People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.

Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right.

John Kenneth Galbraith – in The Age of Uncertainty

Given that backdrop, we're interested in the GND as an indicator of where we are in the great swinging of the socio-political pendulum.

FYI: there's already been some excellent discussion on the proposal in the Peak Prosperity forums, which is definitely worth checking out as accompanying reading to this article.

What Exactly Is The "Green New Deal"?

Here’s the skinny. The GND was introduced on February 7th, 2019 with 64 House Democrat and 9 Senate Democrat cosponsors.

From it’s accompanying fact sheet, the resolution is “a 10-year plan to mobilize every aspect of American society at a scale not seen since World War 2 to achieve net-zero greenhouse gas emissions and create economic prosperity for all.”

So far so good. While we don’t think 10 years is anywhere close to a workable time frame -- it’s much too fast to get to ‘net zero’ emissions (meaning planes and cows are still emitting, for example, but new farming practices are absorbing an equal amount) -- we completely agree with the idea that it’s so late in the game that we need something like the mass mobilization of effort seen in WW II. Only it might need to be that large, plus an Apollo mission, and a Manhattan project in order to succeed.

Here’s the language in the bill:

In (A) it's not clear what a ‘just and fair transition’ means for all communities and workers. There will be winners and losers as there are in any massive economic transformation. Some jobs won’t make sense in an energy-transformed future, and neither will some far-flung communities. This sort of vagueness of meaning, let alone intent, makes the proposal hard to assess in terms of cost, scalability or political feasibility.

We’ll get to the massive issues involved in an energy transition shortly (and they are legendary.) But, first let’s get through the rest of the bill.

Section (B) leaves us really scratching our heads as we’re a big believer in jobs but we’re really not fans of the idea of government providing make-work just for the sake of keeping people busy. And we're definitely opposed to the concept of "giveaway money" aka Universal Basic Income. As the accompanying fact sheet says, part of the envisioned deal is to provide “economic security for all who are unable or unwilling to work.” The emphasis is mine, but the idea of providing economic security for those unwilling to work strikes us as a particularly bad idea. Of course, we're against corporate handouts and bank bailouts, too. [Edit note inserted on 3-11-19: The Ocasio-Cortez team has since said these FAQs were "bad copy" and released by "mistake" and deleted from the website. No retraction or clarification has yet been issued]

In (C), above, we at Peak Prosperity are in strong agreement with the principle of investing in infrastructure, as well as sustainably meeting the challenges of the 21st century. But lacking any more detail than that, there’s not much more to say besides “we think we support this!” But we’re not actually sure. Also, it’s not really the “duty” of the federal government to invest in industry, as that’s really not its strong point.

But, with a gun to our heads, if you asked us if we’d rather see the next $1 trillion of government dollars flow into bank bailouts or into infrastructure, we’d pick the latter in a skinny minute.

Here's the next paragraph:

To which we reply yes, yes, yes, yes, and yes. Put us down for all of that. And also, motherhood and apple pie. And puppies.

Again, the devil will be in the details. And, again, there are none to be found here (yet). Just fine and worthy aspirations.

How exactly the government will go about assuring any of these things is unknown at this point. For sure, it will require a lot of healthy debate and planning.

Still, to recognize progress, just seeing such values put in print at the federal level is a welcome development. This can be taken as a good sign if it truly means we are finally beginning to invite proper national discussion about the essentials that actually matter to us and future generations.

Reading on, we get to the proposd time frame. This is where we start to raise concerns – ten years just doesn't seem realistic:

They're proposing to accomplish all this in the next 10 years (here we summarize the next 15 major sections of the bill):

  • Build resiliency against climate related disasters
  • Repair and upgrade infrastructure in the US
  • Meet 100% of power demand in the US (not just electricity, but all power)
  • Build a nationwide smart grid
  • Upgrade all existing buildings to maximum energy efficiency
  • Spur massive growth in clean manufacturing
  • Remove pollution and greenhouse gas emissions from agriculture
  • Overhaul all transportation systems in the US
  • Restore fragile and threatened ecosystems
  • Remove CO2 from the atmosphere through a variety of means including carbon capture and storage
  • Clean up hazardous waste sites

Don't get me wrong -- we agree that those are worthy and wonderful goals. Many of them are essential to our future well-being.

Any one of them would be a tall order to complete with the next decade. But all of these?

And how much will all this cost? That's completely "TBD" at present. Costs are not estimated or enumerated anywhere in the GND document.

And whatever the cost, how will this ambitious set of programs be funded? Apparently the Fed will just print up most of the money (again from the fact sheet addressing the question “How will you pay for it?”):

The same way we paid for the New Deal, the 2008 bank bailout and extended quantitative easing programs. The same way we paid for World War II and all our current wars. The Federal Reserve can extend credit to power these projects and investments and new public banks can be created to extend credit.

There is also space for the government to take an equity stake in projects to get a return on investment. At the end of the day, this is an investment in our economy that should grow our wealth as a nation, so the question isn’t how will we pay for it, but what will we do with our new shared prosperity.

Not to be overly cynical, but “this baby will pay for itself!” is not the strongest of arguments for the sponsoring politicians to make as history is extremely clear that those claims very rarely pan out.

Going further and wondering about how we will even manage to share all of the resulting prosperity diminishes the argument even further for me. It sounds ungrounded, magically-thinking even, especially since no costs have even been calculated. In our experience, faith-based “investments” are the worst investments.

However, we can clearly see the influence of the 'new darling of modern economics', Modern Monetary Theory (MMT), here. Simply put, it's the idea that the government can simply inject new money into the economy with far more benefit than negative consequence.

We’re entirely unconvinced by this argument. On monetary terms, but even more so because it assumes resources (such as ever more oil) into existence.

MMT assumes that money is the real substance around which everything else revolves. We hold an exactly backwards view from that. In our view, money is just a claim, a marker. What's real is everything else -- everything that money is a claim on (ore, timber, soil, livestock, etc). You can't instantly conjure more of this stuff into existence, no matter how many new dollars you print.

In the context of the GND, we need to point out that many of the bullet points in the above list are multi-trillion-dollar expenditures each.

To simply get US infrastructure up to first world standards would require $4.5 trillion according to the American Society of Civil Engineers (ASCE).

A smart grid? More trillions. Carbon Capture and storage? Many billions maybe trillions. We don’t know at this point because the required technology and processes are not yet scaled up.

But the biggest challenge of them all is weaning off of fossil fuels. That’s going to be many trillions if not tens of trillions of dollars. This includes abandoning stranded investments, taking their value down to $0 (the list includes every oil drill rig, all vehicles with internal combustion engines, exurbs that no longer make sense) and it includes rebuilding/replacing everything that currently uses or runs on fossil fuels – which is pretty much everything. Literally, just everything in your life is powered by, transported by and/or manufactured from fossil fuels.

Transitioning from fossil fuels will be a monumental challenge; a really tricky, complex operation -- if it’s even possible to do without crashing the economy, or worse. Converting to lower-density energy sources (which renewables are) is going to be both profoundly expensive and economically difficult.

Once we dig past the feel-good headlines about wind and solar, a host of complications are revealed. You don’t have to work particularly hard to unearth them, the details are well-known and easy to find.

For example, here’s a link to an excellent piece on the subject written by Michael Shellenberger, a once-committed alternative energy advocate who, after many years of front-line experience, has since come to believe that wind and solar are not really viable options to replace fossil fuels.

The sun doesn’t always shine, the wind doesn’t always blow, we don’t have the requisite grid-scale battery storage even close to worked out, dams have other claims on when and how their water is released that are equally compelling, wind towers kill enormous numbers of large birds and bats, solar panels create enormous amounts of waste at both ends of their life cycle, and on and on.

To spend any time seriously considering how to replace the wonderful, easy abundance of high net energy oil, coal and natural gas is to come away gawking at the sheer complexity of the task.

Yet we at Peak Prosperity are in agreement: it has to be done.

One way or the other, we will end up abandoning fossil fuels, either by environmental necessity or because the remaining dregs take too much effort to extract to make it worth the while.

If we're able to transition on our terms, a reasonable future is possible. If we wait until the limits to growth force our hand, the results will lie somewhere between miserable and utterly disastrous.

And that’s why the GND is a needed starting point for the conversation. Despite being woefully incomplete/unrealistic in its details.

The conversation about intelligently transitioning away from our doomed status quo has to begin somewhere.

We're seeing the seed of it sprouting with the striking students of Europe, Brexit, the Yellow Vests and all of the other suddenly emergent expressions of people rising up and saying “Something is very wrong here! We need to switch to a better way of doing things.”

What's Undeniable Is That Action Is Needed

The Green New Deal suffers from being a gigantic grab-bag of mixed proposals that will have to be separated into individual, much more clarifed components if they are to be actually tackled.

Job security, remedying social injustice, a massive infrastructure overhaul, carbon capture, smart grids, revamping transportation -- each is a massive undertaking.

But none more so than energy transition. Our view at Peak Prosperity is that each nation on Earth is in urgent and critcal need of addressing this question: “Where do we want to be when fossil fuels run out and how do we want to get there?”

This really is the single greatest challenge society faces today, far eclipsing the many other contenders. Simple put: our species has fully expanded into its available energy source, and now we need to figure out how we’re going to transition into whatever's next.

The US had its wake-up call back in the 1970’s when then-President Jimmy Carter laid down a reasonable set of intelligent responses that we’d have done well to heed and implement. But we didn't. Instead the business-as-usual crowd won out and many decades were frittered away, while we continued the build-out of unsustainable living and working arrangements that will be hideously expensive to retrofit or replace.

But that’s all in the past. We are where we are.

So, what are we going to do about it now?

In Part 2: Requirements For Any Kind Of Credible "New Deal", we put forth our own proposal of the policy measures that we at Peak Prosperity deem essential at this pivotal point in history.

Yes, we need to think big to address the massive challenges we're facing; but we also need to think practically and logistically. What are the most effective and achievable ways to affordably secure the best possible future for ourselves, our progeny and our planet?

Our mission statement here at Peak Prosperity remains the same it's ever been: To create a world worth inheriting. If you share that goal, join our tribe of conscientious truth seekers trying to make a difference -- and if you have good ideas to contribute -- add your input to our proposal.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access).

This is a companion discussion topic for the original entry at

Let Greenpeace Co-Founder Dr. Patrick Moore put this GND in perspective. This was his responce to AOC via Twitter:
" After AOC suggested in late February that she was “in charge” until someone comes up with a better plan, Moore fired back, tweeting: “Pompous little twit. You don’t have a plan to grow food for 8 billion people without fossil fuels, or get the food into the cities. Horses? If fossil fuels were banned every tree in the world would be cut down for fuel for cooking and heating. You would bring about mass death."
Industrial civilization was produced by FF’s and it will collapse without FF’s which goes in line with Gail Tverberg’s thinking, that we have boxed ourselves in no matter how hard we try to get out. In short, according to her, there are no answers to our predicament.

Rodster wrote:
Let Greenpeace Co-Founder Dr. Patrick Moore put this GND in perspective.
I'd rather not. Moore is a complete sellout to industry. He's a climate denier with no credibility other than at sites like ZeroHedge (an intellectual toilet funded by fossil fuel industries).
SourceWatch wrote:
Patrick Moore is a nuclear industry public relations consultant (through his firm Greenspirit Strategies) who denies that humans cause climate change. Moore has consulted for the Nuclear Energy Institute, and the Clean and Safe Energy Coalition. He has worked for the mining industry, the logging industry, PVC manufacturers, the nuclear industry and has worked in defense of biotechnology. Although Moore was once (1981, 1986) a leading figure with Greenpeace Canada and subsequently with Greenpeace International, in 2008 Greenpeace issued a statement distancing itself from Moore, saying he "exploits long gone ties with Greenpeace to sell himself as a speaker and pro-corporate spokesperson, usually taking positions that Greenpeace opposes."

I have not much more than zero respect for Patrick Moore but I actually agree with that statement.
The biggest problem with the green transition is how it is blatantly stated to be funded by the fed printing up trillions of dollars. The only way the fed has been able to get away with this historically for so long is because the dollar is the world’s petro reserve currency that basically requires the central monetary authority in the us to print up said fake money, to export in return for real goods and resources “imported” (ahem, r&p’d) from other countries. So even if the us does achieve something with this transition it will have been at the expense of other countries’ resources.
Furthermore, once the us dollar-centric globsl monetary system collapses, whenever that is, and the dollar ceases to be the world’s reserve currency, then that money printing will amount to me printing it up on my own printer. And the initiative will be done. Then those fossil fuel consumption reductions will happen automatically from natural forces, rather than through magical MMT which believes they can provide prosperity for people while at the same time starving them of resources.
This thing sounds like it was written by some economics major who has not a clue how the real world works but may have noticed that the shale space is a ponzi scheme ready to collapse and decided it was time to do something about it and sicked the fed on it, and tried to dress it up pretty to be accepted by the populace.
But, as Chris says, if it stimulates conversation it can only be good. And it’s a better place for the money to go than most others.

Mark_BC wrote:
But, as Chris says, if it stimulates conversation it can only be good. And it's a better place for the money to go than most others.
We have to start somewhere. I give AOC full marks for changing the national debate ... long overdue.

We were talking movies last week and when I think about our predicament, I can’t help seeing Kubrick’s monolith in 2001. In many ways, oil was the human monolith. Once we put our hands on the dark energy, everything changed. We definitely evolved, and our journey was immediate, violent, and exponential. Like the alien “gift,” it was inevitable we would find the stuff. Condensed energy from condensed time. Once we understood its power, nothing else mattered, not really. Over time, almost everything was made with it, made from it, and made to justify its possession. Anyone could be an enemy and anyone could be a friend. Any story could be told as long as the ending was the same - a bold dark splash.
In some ways were at the end of the movie and we’re all astronaut Bowman now. The is no other way to survive but to pass through the dark stuff and reach the other side. No one really knows what it will look like but we’ve already begun the journey. There is no turning back and things are full of grander color, louder noise, and ever growing distortion.

Government sponsored infrastructure funds for institutional investors that pay a 10% coupon funded by printed money (in addition to the regular ROI. This way every $100B of printed money will represent $1T of infrastructure spending. And pensions will essentially be the direct recipients of printed money, instead of (just) Wall Street. Leverage got us into this mess. It can get us out.

I give AOC credit for making a mockery of proposals that deserve real discussion. By lumping so many complex and massive problems into one preposterous proposal that sounds like something from a 7th grade Model UN white paper, she has eliminated the possibility of movement in the right direction.
Simply “starting a conversation” isn’t progress if the proposals are rightly subject to scorn because of the sophmoric way they were presented. We haven’t moved forward - we have moved backward.
Idiots all.

At this point how can anyone know what is scientific reality or simply more political fog? Everything that comes out of the left is always, and relentlessly, a thinly guised attack on property rights and individual liberty. It is right to be skeptical of anything that is championed by the most diabolical political movement in the history of the world.
It seems to come right out of the 150 year old marxist playbook…create a crisis, divide the population, and offer the “solution”…which is always and forever more central government control over everything. We’ve seen this too many times to be taken in.

Whether you respect or have no respect for Moore because he’s a CC denier is really besides the point. There is not one ounce of fallacy in his response to AOC, none. Actually he is spot on and so many miss the point how fossil fuels is tied to our very existence. Hell even Chris Martenson in one of his past articles agrees with Moore, take FF’s out of the picture and things start to collapse.
On the economics alone, countries make money by exporting fossil fuels. Their future promises i.e. “entitlements” to their very citizens are directly tied to FF’s exports. When Saudi Arabia sees the the price of it’s oil products dive on the open markets it puts stress on how it keeps their government running and all those entitlements its promised to its people.
Russia, Venzuela and every oil exporting nation is in the same bind because they make money by selling it and not using it and it allows their governments to run. So that’s the conundrum, finding an alternative energy source that is cheap enough that is not an infinite source that anyone can create so as to give it value and that value translate into profits for those producing the new energy source.
I remember the opening song to the TV show The Beverly Hillbillies and how oil was called “Black Gold, Texas Tea”. Because oil is in itself a form of gold that is something you pull out of the ground and has a store of value and is finite. If any new energy source has no store of value that a government entity can profit from then the system collapses.
But while we continue to look for that elusive new energy source that will provide us flying cars like The Jetsons, John Michael Greer wrote a fantastic article called “Technological Superstitions” technological-superstitions.html and it’s worth a read. Because even when we were told decades ago this day was coming we had ample time to make some changes but instead we put off that day for some time way in the future.

”You can either believe that voting lawmakers into office means they work for you, so you keep voting, or you can admit that doesnt work, and quit voting, which doesn’t work either.”

I agree: a bad proposal can make the laudable goal LESS likely to be achieved, not more. This Green New Deal is an example largely because we’ll have to fight over the implications of a massive government takeover of nearly everything (socialism > communism) before we even get to the “green” energy and environment parts. And I’ll give AOC credit for starting the conversation as soon as someone else gives Hitler credit for rejuvenating the German economy and for being kind to children and pets.

I guess that the nay sayers still dont understand the scope of what we are dealing with… as long as we dont look squarely into the face of energy collapse and climate collapse, the ‘benjamins’ will seem like they are important.
I perceive the GND bill as trying to lay out the scope of what is needed to be done, and not so much of a roadmap on how to actually accomplish the task. It is a Vision statement, a-la the Kennedy speech that kicked off the space race.
I am grateful for AOC being brave enough to float a big idea to spark the conversations that might result in meaningful movement.

thc0655 wrote:
I agree: a bad proposal can make the laudable goal LESS likely to be achieved, not more. This Green New Deal is an example largely because we’ll have to fight over the implications of a massive government takeover of nearly everything (socialism > communism) before we even get to the “green” energy and environment parts. And I’ll give AOC credit for starting the conversation as soon as someone else gives Hitler credit for rejuvenating the German economy and for being kind to children and pets.

Does the GND say that government has to deliver the GND? Aside form government, what would ever even be able to set the goal and set the incentives to deliver on that goal? I perceive that it says that this is what needs to be accomplished. It doesnt specify how it will be delivered.
I think government would set the incentives and then industry would deliver the results. At least that is how weve tackled big issues in the past.

and even now, at the 11th hour and 59 minutes, all we seem to be able to do is pray to the god of wishful technological hopium.
until someone dares to mention the REALITY that we live on a finite planet with limits to growth, and start addressing:

  1. rampant human breeding and
  2. rapacious consumption…
    the GND is just supply side bullshit pablum for non-negotiable human lifestyles.

Not too long ago we had a stock market crash and the banks were bailed out. The bankers were on the receiving end of a GND.
Some time later Obamacare was placed into law and health care executives were on the receiving end of a GND.
You have to be horribly naive to think mankind will be on the receiving end of the latest GND.

Finally, someone elected to office in America has linked the environmental movement with the need for economic justice. It does not surprise me that the people who should be cheering her on are complaining.
Oh dear, she wants to issue credit! That’s only allowed to fund things that make gazillionaires richer! It’s a proven downer! Let’s tell people we’ll raise everyone’s taxes, instead – that’s how Reagan won!
She has too many goals, too fast. We need to stick with the hundreds of non-profits who have completely transformed our economy over the forty years we’ve known about the developing problem, thanks to the brilliance of their hundreds of Executive Directors. They provided us with huge electoral majorities to enable us to transition off fossil fuels by 2000. Nowadays, we can all heat our houses with their fundraising junk mail, which also reminds us to walk our talk.
Never trust your friends, especially if you’re not a Trumper.

Eventually, Cope’s Rule (as applied to civilizations) gets us all in the end; “The bigger they are, the harder they fall” summarizes this predictament, as Joseph Tainter has explicitly explained. Couple this with, “the road to Hell is paved with good intentions”, and you have a world ripe for the inevitable. Instead of whining about it, take a few minutes and consider this:

The statement that people unwilling to work should receive an income speaks volumes. I’ve had personal experience with people fundamentally unwilling to work. The individual was hired for yard work and would cancel at the last minute because she just didn’t feel like working that day. Food stamps and government payouts, including the free health care were enough for her to get by on and the money from us was supplementary. If it wasn’t needed that week there wasn’t incentive to work. The last straw was when I spent a couple days building a loft in her “tiny house” only to have her expect payment for every hour she worked the next time she came by. (I probably should note, she was NOT a person of color)
Incentives matter. If the alternative is starving, people work. If not, some people won’t.

One complication in the “unwilling to work” discussion is that too often people only define something as “work” if it has a monetary paycheck attached.
Example: a parent who stays at home to care for children is “not working”, but the parent who does something to earn money then pays for child care is considered to be “working”. (So is the child care provider.) There’s a good chance that the former is better for the family’s wellbeing, but it doesn’t get the same respect these days.
I don’t have an answer for that but it’s worth mentioning.

The individual was hired for yard work and would cancel at the last minute because she just didn't feel like working that day.
Methinks that person has a "keeping her word" problem. If she thinks she can get through the week without "working", fine, but she should decide that ahead of time and not make commitments. However, I'd suspect that she isn't the sort who is very good at thinking ahead. I don't have an answer for that either ...