I just did a presentation at the Eastern Economic Association meeting on “Lessons for the Green New Deal from the Economic Mobilization for World War Two.” Here are my slides.
The paper itself should becoming out from the Roosevelt Institute in the next month or so.
–I think a Green New Deal is feasible, but I don’t think it will have anything like the economic impact on the US that World War II did.
For one thing, much of the equipment—wind turbines, solar panels, batteries and their components—will be made in Asia. US auto companies may get a lot of work building EVs, but not a lot more than they would get in the ordinary course of replacing the auto fleet every 15 years.
There’s also not as much room to expand employment in the US as there was after the Great Depression. In 1941 the unemployment rate was 9.9 percent, not 3.6 percent. We don’t have the reserve armies of housewives and the unemployed that were mobilized for World War II.
Maybe we could get the participation rate back up to 67 percent, which might add 10 million workers, about half of what Bernie’s GND calls for. But that’s going to be hard with an aging population. And GND jobs will be heavily in the construction trades, which older workers, women and college grads aren’t very much drawn to.
We can always import immigrant workers. But there’s not going to be much employment payoff for current US citizens.
That doesn’t mean we can’t do the GND, it just means that the macroeconomic benefits will be small and not much of a selling point for the GND in their own right. It’s the Green part that’s important, the New Deal part is pretty much meh.
–Bernie’s Green New Deal envisions spending $16.3 trillion to get to a 100 percent renewable electricity supply and transportation system by 2030, with a 71 percent reduction in emissions for the economy as a whole. Something close to that is probably doable.
Some flexibility would help that agenda a lot. For instance, setting a goal of 95 percent carbon-free electricity, with the rest supplied by natural gas, would make things substantially cheaper and a lot easier to implement. Getting the last scraps of carbon off the grid is disproportionately expensive and hard, with little climate impact.
Bernie also has a problem with politicizing technology.
His Green New Deal intends to shut down the nuclear power sector, thus wiping out half of our existing carbon-free power, 20 percent of the whole electricity supply. It also anathematizes geo-engineering and carbon capture and sequestration, which are vital paths to pursue. He’s going to spend enormous sums on weatherizing buildings, which isn’t cost effective. And he wants to spend hundreds of billions of dollars on rural mass transit and high-speed rail, which are colossal wastes of money; we’d get more decarbonization for the buck with other approaches like carbon-neutral aviation fuels.
So, a lot of stupid green dogma there that will raise the cost and slow the pace of decarbonization.
Bernie’s right about the broad goal we should be pursuing, but I’d rather see somone more rational in charge of bringing it off.