A Green Keynes? Not by himself!

The New Green Deal, or Green New Deal, idea is getting a lot of coverage. There are some good ideas there but serious flaws, and they demonstrate a kind of laziness of thought among some of the advocates.

A New Green Deal means expansion of the economy. That means more consumption, more imports, more waste, more material flows, more emissions.

This is a consequence of the Keynesian multiplier: and such expansion is the aim of the New Green Deal, the re-stimulation of the economy.

Another way to think about this is in terms of rebound. Think about on what people will spend their improved incomes. Yes, carbon intense goods and services.

Unless everything is produced in a zero carbon way, “green growth” means incrementing emissions, unless the shift to clean energy outweighs the carbon inputs to production, distribution and end of use pollution.

Moreover “growing the economy” generally means growing profits, that is, the share of value going to capital, to the already privileged and rich, rather than to those with less. The illusion of a rising tide (of income) obscures those in sinking boats (of wealth).

Going back to emissions, it seems a Green New Deal, or Green Growth (whilst they boost clean energy, insulation, etc.) can only help mitigate emissions if, and only if, there are resource caps & energy caps at the input side of the economy.

Similarly, the tendency to increase inequality requires a focused, pre-distributional policy framework.

So the Green New Deal paradoxically risks adding to the problems it set out to fix. Only with credible counter-strategies on resource/energy inputs (consumption by firms, the State, and citizens) and pre-distribution (basically that means socialising ownership), can it become an authentic solution to our predicament.

You might even say (though missing out a lot of subtleties and detail) that Green Keynesianism (for that’s what these New Green Deals are) needs strong doses of both ecological economics and Marxism.