Stiglitz: Green New Deal Would Deliver the Second World War-Scale Investment to Confront the Climate Crisis
Describing the climate crisis as the “third world war,” Nobel laureate and former World Bank chief economist Joseph E Stiglitz is urging critics of the Green New Deal to take a second look at an agenda that could avert catastrophe and usher in a new golden age for America.
In a recent op ed for The Guardian, Stiglitz rebukes those who respond to the Green New Deal by asking whether societies can afford it. Drawing a direct analogy to the Second World War, he answers, “Yes, we can afford it, with the right fiscal policies and collective will. But more importantly, we must afford it,” since the climate crisis is no less an “existential matter” than the Second World War.
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In the United States, “we are already experiencing the direct costs of ignoring the issue—in recent years the country has lost almost 2% of GDP in weather-related disasters, which include floods, hurricanes, and forest fires,” he writes. “The cost to our health from climate-related diseases is just being tabulated, but it, too, will run into the tens of billions of dollars—not to mention the as-yet-uncounted number of lives lost. We will pay for climate breakdown one way or another, so it makes sense to spend money now to reduce emissions rather than wait until later to pay a lot more for the consequences—not just from weather but also from rising sea levels. It’s a cliché, but it’s true: an ounce of prevention is worth a pound of cure.”
That “ounce”—in the form of the Green New Deal—could also unlock a trove of sustainable growth “amidst shared prosperity,” he adds.
Noting that “Trump’s focus on the industries of the past, like coal, is strangling the much more sensible move to wind and solar power,” Stiglitz observes that “more jobs by far will be created in renewable energy than will be lost in coal.”
Identifying the marshalling of resources for the Green New Deal—including labour—as the “biggest challenge” to its implementation, he urges improvements to family leave and support policies that would allow more women and retirees to enter the labour force. Such an expansion of human resources, together with “true supply-side policies” like better education and health policies and more investment in infrastructure and technology, would stimulate the productive capacity of the economy, providing “some of the resources the economy needs to fight and adapt to the climate breakdown.”
What will most certainly be needed, he added, is “a redeployment of resources to fight this war, just as with the Second World War.
Much easier to implement, Stiglitz observes, will be the elimination of “the tens of billions of dollars of fossil fuel subsidies,” and efforts to address a tax system so “rife with loopholes” that “it would be easy to raise more money at the same time that we increase economic efficiency.”
He adds that “taxing dirty industries, ensuring that capital pays at least as high a tax rate as those who work for a living, and closing tax loopholes would provide trillions of dollars to the government over the next 10 years, money that could be spent on fighting the climate emergency.”
Stiglitz also envisions a national green bank that “would provide funding to the private sector for climate breakdown—to homeowners who want to make the high-return investments in insulation that enables them to wage their own battle against the climate crisis, or businesses that want to retrofit their plants and headquarters for the green economy.”