The wildfire that wiped out Paradise, California, viewed from space. At last count, there were 88 confirmed dead, 296 missing, The fire destroyed 13,972 homes, 528 commercial buildings and 4,293 other structures. (Photo: NASA)
This is an abridged version of a paper that will appear in the March 1, 2019 special issue of Real-World Economics Review.
I. The IPCC Report “Global Warming of 1.5°C” and the imperative to immediately suppress fossil fuel production
The much-awaited report from the U.N.’s top climate science panel describes the enormous gap between where we are and where we need to be to prevent dangerous levels of global warming.
The 2015 Paris climate accord committed industrial nations to reduce their emissions sufficiently to keep global temperatures within a 2°C rise over pre-industrial levels. In the final accord, highly vulnerable island nations and faith communities represented at the UN pressed the authors to include the 1.5°C limit as an aspirational target in the final draft of the accord with 2°C as the backup target.
Soaring GHG emissions over the past five years, rising atmospheric CO2 concentrations, ice-cap retreats, intensified storms, summer forest fires reaching even above the Arctic circle, and die-offs of the world’s coral reefs have all raised concerns about what even a little bit more warming would bring. Parts of the planet including the Arctic and many inland areas, have already warmed beyond 1.5°C. California is on fire most of the year. The worst hurricanes are twice as severe (more precipitation, slower passage, greater wind speeds) as they used to be. This is just a short start.
Climate breakdown occurring much more quickly than expected is one reason why climate scientists now think that the goal just five years ago of limiting warming to 2°C “increasingly seems disastrous in this context.” The Paris pledges were never sufficient even to keep warming below 3°C let alone 2°C. Few of the signatories have even managed to meet the low bars they set for themselves and the world’s largest countries including China, the U.S., and Canada have us on track to a 4-5°C warming.
As CO2 concentrations continue growing, preventing runaway warming is going to require ever deeper, truly draconian cuts in emissions, which will mean greater economic disruption. IPCC estimates already show us needing to achieve a near vertical drop in emissions in the early 2020s. Every day we delay getting off of fossil fuels increases the probability that we won’t be able to save ourselves.
The 2018 IPCC special report painted a stark portrait of how quickly the planet is heating up and called on governments to take immediate steps to suppress emissions:
If emissions continue at the current rate, the atmosphere will warm by as much as 2.7° Fahrenheit, or 1.5° Celsius, above preindustrial levels by between 2030 and 2052. Further, warming is more extreme further inland of large water bodies. [To keep temperatures from rising beyond 1.5° degrees] anthropogenic CO2 emissions [must] decline by about 45% worldwide from 2010 levels by 2030 . . . [This] would require rapid and far-reaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems. . . . These systems transitions are unprecedented in terms of scale . . . and imply deep emissions reductions in all sectors, a wide portfolio of mitigation options and a significant upswing in those options.
Preventing ecological collapse requires transforming the world economy at a speed and scale that “has no documented historic precedent.” What would this take? Myles Allen, Oxford University climate scientist and an author of the report said, “It’s telling us we need to reverse emissions trends and turn the world economy on a dime.” To prevent 2.7 degrees of warming greenhouse emission must be reduced by 45 percent from 2010 levels by 2030, and by 100 percent by 2050. Use of coal as an electricity source would have to drop from 40 percent today to 1-7 percent by 2050. Drew Shindell of Duke University, another author of the report said: “It would be an enormous challenge to keep warming below a threshold” of 1.5 degrees . . . What might that look like? In part, it would include things such as no more gas-powered vehicles, a phaseout of coal-fired power plants and airplanes running on biofuels,” he said. “It’s a drastic change,” he said. “These are huge, huge shifts . . . This would really be an unprecedented rate and magnitude of change.” In response to the report, United Nations Secretary-General António Guterres warned world leaders to “Do what the science demands before it’s too late.”
II. Capitalist priority to growth and profits over people and planet
Given this unprecedented existential crisis one might expect governments would responsibly meet this climate emergency with emergency plans to prevent ecological collapse -- bold proposals for “deep emissions reductions in all sectors,” for “far-reaching transitions in energy, land, infrastructure, and manufacturing” and so on. After all, the 2018 IPCC 1.5 C report makes clear that on present trends we could be facing the collapse of agriculture in California, the Great Plains, India, China, and much of Africa along with mass famine, submerging cities, destruction of the world’s last forests and worse, possibly as soon as 2040, well within the lifetime of many leaders today and certainly their and our children.
What’s more, the solution to our climate crisis is astonishingly simple and doesn’t require any new tech breakthroughs. The first step is to stop doing what we’re doing: immediately begin shutting down fossil fuel production, stop new drilling, stop producing and registering fossil fuel-powered vehicles, drastically curb air travel, ration fossil fuels, curtail manufacturing and construction. The second step is to force through an immediate transition to renewable energy across the economy (and do what we can to enable this transition around the world).
A. Where are the bold proposals?
Yet we hear no bold proposals to meet the challenge from any governments -- not from European socialist parties, not from Canadians or Australians (the leading exporters of the world’s dirtiest fuels), certainly not from the Chinese (the world’s largest polluters who, moreover, are now abandoning the limits on coal-burning they just imposed last year in order to restore growth in the face of the trade war), let alone from the Trump administration. Trump’s response to his own government’s prediction of a 4°C warming by 2100 is “the planet’s fate is sealed” so we may as well abandon Obama’s federal fuel-economy standards for cars and light trucks and “burn baby burn.” To the extent we hear any proposals at all, it’s just renewed calls for more of the same carbon taxes, the same fantasy tech fixes like carbon capture and storage that have manifestly failed to staunch emissions to date. Why is that?
The reason why no government dares take the obvious steps to save the humans is because no one has come up with a magic fix to suppress emissions without suppressing economic growth and profits. Given capitalism, economic growth and profit maximization must be systematically prioritized over all other considerations including emissions reduction or companies will fail, the economy will collapse, and mass unemployment will be the result: global warming may kill us in the long run but economic collapse will kill us in the short run. This is the ultimate contradiction of capitalism: We have to destroy our children’s tomorrows to hang onto our jobs today.
That’s why from the very first climate negotiations around the Kyoto Protocol in the 1990s, all efforts to contain emissions have been subordinated to maintaining economic growth. Year after year, decade after decade, for 21 straight years to COP21 at Paris in 2015, UNFCC annual summit negotiations invariably collapsed in failure and acrimony. Despite the pleas of climate scientists, desperate submerging Pacific islanders, Africans, Indians and others who contribute few emissions but suffer disproportionately from global warming-induced drought and crop failures, no industrial nation has been willing to accept binding emissions limits because they all understand that caps would suppress economic growth. As George Bush Sr. infamously told the 1992 Climate summit, “The American way of life is not negotiable.” And if America will not accept binding emissions caps, why should China? Facing growing protests over their do-nothing annual summits, the only thing negotiators at Paris could agree on was to stop holding their embarrassing annual farces (henceforth they agreed to meet every five years instead) and contrive another “agreement” in which industrial countries pledged to reduce their emissions somewhat some day but are under no legal obligation to do so -- prompting James Hansen, the world’s foremost climate scientist, to complain that,
It’s a fraud really, a fake. It’s just bullshit for them to say: “We’ll have a 2C warming target and then try to do a little better every five years.” It’s just worthless words. There is no action, just promises. As long as fossil fuels appear to be the cheapest fuels out there, they will continue to be burned.”
B. Halting global warming requires degrowth, substantial de-industrialization
If there’s no magic tech fix then phasing out fossil fuel consumption has to mean shutting down or at minimum, drastically retrenching companies, beginning with the fossil fuel producers like Peabody Energy (coal), Exxon Mobil, Chevron, but continuing down the petrochemical food chain through the fossil fuel dependent industries. After all, it’s easy to blame the fossil fuel companies for global CO2 emissions.Environmental groups have focused too narrowly on fossil fuel producers, their pipelines and such, while ignoring the downstream industrial and personal consumers. Not to put too fine a point on it but the oil producers don’t burn the oil. We burn the oil producing, processing, transporting and refrigerating food, driving our cars, building our homes, heating and cooling our homes, manufacturing this and that, jetting off on vacations, and so on. Fossil fuels are pervasive. As this table shows, fossil fuel emissions are produced across the entire economy.
Total U.S. Greenhouse Gas Emissions by Economic Sector in 2016
Commercial & Residential 11%
If governments in the industrialized economies had listened to climate scientists in the 1980s and taken steps then to radically suppress emissions, perhaps we wouldn’t be in the desperate fix we find ourselves in today. But they didn’t. They dithered, stalled, insisted on market “solutions” that were really designed to fail with the result now, after decades of “green captalism,” we find ourselves facing an existential crisis that admits of only one proximate solution: state intervention to slam the brakes on emissions by shutting down the emitters. If we’re serious about suppressing fossil fuel emissions, then we have to drastically retrench and in some cases completely shut down thousands of downstream fossil fuel-dependent companies in transportation, petrochemicals and plastics, manufacturing, construction, agribusiness, tourism and more in the U.S. alone. In cases like plastics, disposable products and others, we would have to virtually abolish entire industries because there’s just no other way to suppress their emissions and make them sustainable.
C. Why carbon taxes fail
Three years on from Paris nothing has changed: Soaring emissions, shocking increases in CO2 concentrations, arctic fires and floods notwithstanding, governments, economists, even climate scientists continue to proffer the same old market-based fake solutions: steeper carbon taxes, unproven, impossibly expensive “carbon removal” technologies, and fantastical geoengineering schemes. Everything but the obvious: “deep emissions reductions in all sectors” at “unprecedented speed and scale.”
The UN IPCC scientists themselves called for steep increases in carbon taxes, pushing governments “to set a price high enough to spur truly deep as reductions in carbon emissions.” This approach is hopelessly untenable. Why? Both cap and trade schemes and carbon taxes grew out of the Reagan-era Milton Friedmanite hostility to government “command and control” and the preference of Reagan, Clinton and subsequent governments for market approaches to all problems. The idea was to incentivize businesses and consumers intead of imposing state-mandated quotas or rationing. The carbon tax idea was straightforward: tax fossil fuels and consumers and companies will seek non-fossil fuel alternatives. As taxed coal-fired power plants and fossil-fuel powered motor vehicles became more costly to operate relative to untaxed (and even subsidized) renewable energy and electric cars, over time coal and gas-fired power plants and petrol-powered motor vehicles would fade from the scene. The theory seemed compelling, even obvious, in the abstract. In the real world, carbon taxes don’t work. The whole idea was doomed from the start.
The problem is the economics: If the tax is too light, it fails to suppress fossil fuels enough to help the climate. But if it’s heavy enough to really suppress them, then companies and consumers balk and resist the tax -- because without any safety net for businesses and consumers, the entire burden falls on them, so they rationally resist to save profits and jobs. Thus to date, the only carbon taxes that have proven acceptable to governments and the voting public are those which are too light to do the job. More than 40 governments including EU, California and British Columbia have imposed taxes on carbon but none has put more than a trivial dent in emissions. A report from the Organization for Economic Cooperation and Development (OECD) found that the average carbon price across 42 major economies was around $8 per ton in 2018 (that’s equal to 7 cents on a gallon of gasoline) -- “far below the level that the IPCC scientists say is necessary to address climate change.” No government will set a price high enough to spur truly deep reductions in carbon emissions because they all understand that this would force companies out of business, throw workers out of work, and possibly precipitate recession or worse. What government wants that?
The carbon tax “blueprint for destroying the world economy”-- Heritage Foundation
Given relentlessly growing emissions, and given the failure of modest carbon taxes to suppress fossil fuel production to date, the desperate IPCC climate scientists called on governments to impose truly draconian taxes -- on the order of $135 to $5,500 per ton, even $27,000 per ton -- whatever it takes to suppress fossil fuel consumption enough to keep global warming below 1.5° Celsius.
The pro-market Heritage Foundation, not surprisingly, skewered this recommendation arguing that taxing industries by anything like these numbers “would bankrupt families and businesses and trigger a global economic disaster.” The IPCC plan, they said is “a blueprint for destroying the world economy.” Given capitalism, they’re right, of course. In a world of abstract models, the carbon tax strategy works perfectly. But in the real world, with real investors and real employees -- and without a rationally planned, carefully managed wind-down and phase-out combined with guaranteed state support for the investors and guaranteed “just transitions” for the affected workers, the imposition of draconian carbon taxes would bankrupt some of the largest companies in the world, precipitate a stock market crash, throw millions out of work, and most likely “destroy the world economy.” Voters intuitively understand this. That’s why they just voted down the carbon tax in Washington state. And if voters won’t pass Washington’s trivial $15 a ton tax (equal to 13 cents on a gallon of gasoline), why would scientists think they would pass a tax of $135 (or $1.20 on the gallon), let alone $5,500 a ton ($48.95 a gallon!)? To ask the question is to answer it. Imposing the entire cost of driving out fossil fuels onto companies and consumers without providing them alternatives and a safety net is hardly a winnable plan. Just the opposite: it’s guaranteed to turn people against the whole project. And yet if we don’t in effect drive the fossil fuel companies out of business, our goose is cooked. So what to do?
D. FDR’s “command-and-control” economy that worked
If governments really wanted to suppress emissions they could simply ration fossil fuels like FDR did during WWII when he rationed private consumption to divert maximum supplies to the war effort. They could inaugurate a crash program to phase out fossil fuels. They could simply order America’s private companies to shut down private vehicle production and change their production output from fossil fuel vehicles to, say, electric cars, public transit, wind turbines, solar power plants, just as FDR ordered GM, Ford and other companies to stop producing private cars and start producing tanks, bombers, fighter planes, artillery, machine guns, ammunition, just as he ordered Packard to build fighter aircraft and PT boat engines, just as he ordered Chrysler to build diffusers to process uranium for atomic bombs. And so on. FDR’s virtual takeover of the commanding heights of American industry during WWII was tantamount to a temporary nationalization but his “command and control” was accepted by labor and capital and it succeeded – brilliantly -- providing the industrial base to win the war.
We would no doubt require the declaration of an emergency comparable to WWII to win the approval of Congress and the American people. WWII certainly qualified as an emergency. Even so, fascism killed tens of millions but it did not threaten the extinction of life on earth. Global warming threatens extinction. Is saving the humans, not to mention the whales, less of an emergency than saving General Motors or Boeing or Apple? If Roosevelt could turn the economy on a dime to meet the emergency of WWII, why can’t we do the same today? If we don’t organize an emergency industrial shutdown and retrenchment of unnecessary production, superfluous manufacturing, superfluous electricity usage, wasteful over-consumption, nature is going to do it for us in a most unpleasant manner.
Yet today we can’t get a fair public debate on the need for state intervention in the economy because since the age of Thatcher and Reagan, Milton Friedman’s maxim “capitalism good, government bad” has been the reigning ideology of Republicans and Democrats, Tories and Labour alike. Since the 1980s Friedmanite economists and their Koch-funded think tanks have produced a relentless stream of propaganda “proving” that “command and control” or almost any “government intervention” is “bad” and “can’t work.” Reagan told us businesses don’t want to be ordered about and told what to do like FDR did. They want to be “incentivized.” Since the 1980s Republicans and Democrats alike have steadily whittled away and gutted government regulation and control wherever possible, clearing the way for Trump’s coup de grâce at the EPA this past year. In the process, their “market solutions,” like carbon taxes, have completely failed to staunch emissions.
III. THE ECOSOCIALIST PATH TO 1.5°C SUSTAINABILITY
We ecosocialists have a practical answer. We accept the science that to prevent runaway global warming “greenhouse emission must be reduced by 45 percent from 2010 levels by 2030, and by 100 percent by 2050.” We agree with the IPCC that this will require “deep emissions reductions in all sectors.” We agree that it will require “far-reaching transitions in energy, land, infrastructure, and manufacturing,” that it will require “systems transitions” (indeed, more than they imagine). And we understand that this must all be done at “unprecedented speed and scale.” “We understand that we desperately need to “do what the science demands before it’s too late.”
But we also understand that imposing drastic cuts in fossil fuel production has to translate into industrial shutdowns and retrenchments across the economy. There is just no way around this. We reject the carbon-tax-to-collapse scenario. Instead, we propose a strategy of rationally planned, democratically managed, wind-down and phase-out of fossil fuels and a coordinated transition to renewable energy that avoids economic collapse and guarantees reemployment for the affected workers. Our strategy is based on a three-point
An Emergency Plan to meet the Climate Emergency:
1. Declare a State of Emergency to suppress fossil fuel use: Ban all new extraction, ration gasoline and diesel, ban production of new fossil-fuel vehicles. Nationalize the fossil fuel industry to phase it out. We do not call for expropriation. We propose a government buyout at fair value (fair to both owners and society). Nationalization will need to extend beyond fossil fuel producers to dozens or hundreds of industrial fossil-fuel dependent industries from pipelines, refineries, distribution networks to power generation, autos, aviation, petrochemicals, some manufacturing, tourism and others whose business is irreversibly based on fossil fuels and who without a governemnt buyout would be bankrupted.
2. Institute a new federal Public Works Administration-style jobs program (on the model of the Works Progress Administration, Civilian Conservation Core and other programs set up under FDR) to re-employ every worker in the fossil fuel-related industries at equivalent pay and benefits in other useful but low-emission work. Those workers in coal, oil, plastics, toxic chemicals and so on deserve jobs, just not the jobs they have now.
3. Launch an emergency state-directed crash program to phase-in renewable electric generation, replace fossil-fuel powered transportation with electric propulsion, discourage individually-owned vehicles where possible and encourage their replacement with public transit, shared vehicles, bicycles and other non-fossil fuel modes of transportation. Develop emergency plans to retrench industries including air travel, shipping, and other large CO2 emitters. And develop emergency plans to shift from fossil-fuel dependent factory farms to fully organic agriculture.
A. The argument for nationalization
If fossil fuel companies can’t reverse their suicidal growth-to-bust trajectory, then what alternative is there but to nationalize them, socialize them, put them under public ownership to phase them out? We say to Democrats, Republicans, capitalists, and pro-fossil fuel trade unions too, “If you have a better strategy to save the planet, where is it?” As Juliana vs. United States (the Our Children’s Trust suit which is now working its way through the courts) contends, the federal government has a responsibility to preserve a habitable planet to maintain “life, liberty, property” for the next generations. The plaintiffs argue that preserving a habitable planet requires that the government immediately begin enforcing strict limits on CO2 emissions, immediately develop plans to phase out of fossil fuel production, and ban all further extraction (Section 7 p. 80ff).
Since the companies can’t put themselves out of business, the only way to affect the phase-out of fossil fuels without precipitating economic collapse is for the government to nationalize the companies so we can dismantle them and redeploy their capital and labor with as little economic pain as possible. For too long, the environment has been systematically sacrificed on the altar of profits, jobs -- kicking the can down the road till we kick it and ourselves over the cliff. We can save the fossil fuel industrial complex for few more decades till we collapse, or we can reverse these priorities and save the planet. That’s the choice before humanity today.
Of course politicians will holler about the cost. The cost is significant but affordable, a bargain actually. The ten largest American oil and gas companies claim a combined value in 2018 of $968.1 billion (Exxon Mobil is valued at $344.5 billion, Chevron $239 billion, ConocoPhilips $79.3, and the others from $68 to $33 billion). The two major coal companies have trivial net worth (Peabody at $3.6 billion, Arch at $1.5 billion). But the IEA says that in truth, the world’s fossil fuel industries are worth a fraction of their claimed value because most of their assets – the oil and gas and coal in the ground -- are fast becoming valueless “stranded assets” as electric utilities and vehicle manufacturers shift to renewable power and because of growing political pressure to “leave it in the ground.” Given their looming existential profits crisis, the companies might actually welcome a buyout. But if society is to pay a fair price for those companies, their nominal retail value would have to be discounted by the harm their production has already done to people and planet. On any fair assessment, that would leave these companies owing the government, not the other way around. Yet even at their current retail value, just under a trillion dollars, by the standards of wasted U.S. expenditures, this is affordable. President Trump just gave away $2.3 trillion in tax cuts to the rich this year alone. Just rescinding that inexcusable giveaway would cover the cost of nationalizing the entire fossil fuel producing industry and leave enough left over to buy up the bulk of America’s fossil fuel-burning industries as well including Boeing, the major airlines, the American auto industry, the worst polluting chemical industries, and leave billions to spare. Boeing’s net worth is $95 billion, the seven largest U.S. airlines have a combined market capitalization of $130 billion, the American auto industry, Ford, GM and Tesla (excluding Chrysler which was bought by Italy’s Fiat in 2011), has a combined value of $277 billion, the big dirty three of Dow-Dupont, Monsanto, and 3M combined are worth $225 billion. The government could buy all these companies, even without discounts for their social and environmental crimes, for a paltry $727 billion. Add in the bulk of private and shareholder-owned gas and electric utility sector, 20 companies with a combined market value of $557 billion, and the government could buy up all of America’s fossil fuel producers and the bulk of its fossil fuel-burners for $2.26 trillion and still have some pocket money left after rescinding Trump’s tax giveaway to the rich.
Further, we could rescind the dozens of other needless tax cuts and handouts to the rich since the days of Reagan. We could impose the fines on the banks that Obama and Trump failed to impose. We could restore the progressive tax structure we use to have before Reagan. And we could use these funds to rebuild our infrastructure, fund the transition to renewables, upgrade and properly fund our destitute public schools, fund a comprehensive health care system for all, properly fund our skinflint Social Security system, and build a decent society. Finally, we can’t build a decent society for anyone if we don’t gut the imperial war budget (nearly three-quarters of a trillion a year). According to the most recent study, by the end of 2019, the U.S. government will have spent a staggering $5.9 trillion on its illegal criminal wars in Afghanistan, Iraq and Syria since September 11, 2001 -- wars that were never fought for democracy and certainly not in for defense since none of those countries attacked us but were, instead, imperial wars to protect “our” oil under “their” sand.
Thus, we categorically reject, in advance, any argument that the government cannot afford to buy out the fossil fuel producers and dependent industries to save the humans. On the contrary, we maintain that even at a retail value of $2.25 trillion, this buyout of fossil fuel producers and burners is a bargain – barely more than a third of what the U.S. has squandered (so far) on its oil wars in the Middle East since 2011.Plus, since the U.S. military is the largest institutional GHG emitter, cutting the military budget would also slash emissions from this sector.
B. The argument for a new Public Works Administration-style jobs program
Under capitalism, closing and retrenching companies means throwing workers out on the street. We’re socialists. We don’t accept that. If capitalists won’t provide the jobs then it’s the government’s responsibility to do so. We, the voting public, assert our ownership of the government, not the corporations. Today we face an existential threat to our survival and the only way to prevent collapse is to slam the brakes on the industries that are destroying us. It’s not the workers’ fault if the industries they work in need to be closed or cut back to save our children and theirs. They deserve jobs, different jobs, better jobs. If society is going to abolish their present jobs then it owes them new jobs with comparable pay and benefits. This is not only morally right but it’s also the only way we can win the support of those workers in the struggle for the common good.
There’s no end of low-carbon work that needs to be done: infrastructure repair and upgrades, a vast expansion of renewable energy, transitioning to fully organic farming, a massive expansion of public transit, commuter biking, development of share-vehicle commuting, environmental restoration, housing upgrading, heating and environmental retrofitting, upgrading and improving our schools, expanding medical care, expanding services and facilities for our retired workforce and more. If capitalists can’t figure out how to make a profit doing it, then society through our government must employ them – just as FDR’s New Deal public works programs of the 1930s built tens of thousands of projects -- dams, electric utilities, airports, highway systems, bridges, tunnels, new railways, gorgeous train stations, glorious city halls and post offices, incredibly beautiful parks, beautiful public schools, modern hospitals, public universities and more. FDR’s construction programs built the bulk of this country’s national infrastructure that we still rely on today. If in the midst of depression, the government could afford to provide full-time government-funded jobs for tens of millions of workers from 1933 through the 1940s, becoming the nation’s largest employer by far, our immensely wealthier society and government can easily afford to re-employ the millions of workers from the fossil fuel-based industries to construct a permanently sustainable economy.
C. The imperative of economic planning and democratic management
After they wrecked the economy and plunged us into the Great Depression in 1929, America’s capitalists couldn’t pull themselves together to restore economic growth. In 1932 Franklin D. Roosevelt, campaigning on a state-interventionist, help-the-poor “NewDeal,” won a landslide victory over “do-nothing” Hubert Hoover who was deservedly blamed for letting the Depression get as bad as it did and reviled for his failure to intervene to rescue the economy and the citizenry. President Roosevelt turned the government into the biggest economic engine and the biggest employer in U.S. history, creating a state-directed capitalism, organizing a powerful state planning apparatus, setting up federal employment programs, and superintending construction of a the country’s first basic social safety net – transformations that handed him three more landslide victories in 1936, 1940 and 1944. Roosevelt and Congress established the National Resources Planning Board (NRPB) in 1933 to organize public works programs to put people back to work, revive the economy, and modernize our infrastructure. This was the first and so far only national planning agency in U.S. history. It evolved from public works planning to broader social and economic planning and then to mobilize and direct resources for the war effort. Regional planning groups were created in New England and the Pacific Northwest. Most states established planning agencies while planning boards emerged in many cities. Capitalist ideological hostility to economic planning per se – they couldn’t stand the threat of a good example -- eventually forced Congress to abolish the national board in 1943. But NPRB legacies included wartime and postwar planning, the first version of the G.I. Bill of Rights, the Second (Economic) Bill of Rights (a manifesto for postwar liberalism), an institutionalized policy planning process via the Council of Economic Advisors, and the annual federal budget process established by the Employment Act of 1946.
The existential crisis we face is, to say the least, far more dire and urgent than the Great Depression. And here again, capitalism has no solution to the crisis it created because the capitalist solution to everything is the same growth that got us into this crisis in the first place. That’s why we argue that the only way to brake the drive to collapse is to socialize the commanding heights of the economy. We don’t need to nationalize the entire economy. Small producers, worker co-ops, family farmers, mom & pop shops, restaurants and so on, aren’t killing the planet. Large corporations are killing the planet. They can’t help themselves. To preserve a habitable world we need to take them under public ownership so we can rationalize, reprioritize and restructure production to create a permanently sustainable, if somewhat less industrialized, economy.
D. System change not climate change
It is perhaps conceivable, taking FDR’s war-emergency industrial reordering as a precedent, that the three-point plan just described for fossil fuels buyout-nationalization, state-directed emergency transition to renewables, and creation of a large federal jobs program, could be enacted within the framework of capitalism, though the result would be a largely state-owned economy. Roosevelt created his state-directed capitalism with only modest, if increasing, ruling class resistance because, first, he revived a broken capitalism from the depths of the worst depression in history and saved it from communism, secondly, he never needed to actually nationalize the industries he effectively took over because he was paying their owners handsomely to expand and grow their companies, if by producing different products, and thirdly, this was all just a temporary encumbrance, limited to the duration of World War II.
We face the opposite problem: We face a booming capitalist economy at the top of its form with a powerful entrenched ruling class in full command of their economy and their state. What’s more, we need to nationalize industries not to grow them but to phase many of them out, or at minimum to transform GM from an automaker into, say, a wind-turbine maker or a train manufacturer, and permanently. Given the “unprecedented scale” of the problems we face, given the “far-reaching transitions in energy, land, urban and infrastructure . . . and industrial systems” we need to make, and given the speed with which we need to make these changes, it’s difficult to imagine how this could be done within the framework of any capitalism. Private ownership of the means of production, profit maximization, and market competition have been the leading drivers of global ecological collapse and pose the main barrier to the rational rerorganization, restructuring and reprioritization of the economy we need to make to save the humans. The depth and urgency of our climate crisis cries out for something like an immediate transition to ecosocialism. We don’t have many decades left before its too late to bother trying.
The IPCC climate scientists tell us we have just a dozen years or so to rein in our growth-to-bust economic system and come up with an effective pollution-suppression plan and mechanisms to staunch CO2 emissions. Ocean scientists tell us we need a Five-Year Plan to save the oceans. We need global plans to save the oceans, save the forests, save species from going extinct. This requires generalized large-scale economic planning. The problems we face with respect to the environment and the climate, can’t be solved by private corporations competing in an anarchic market.Saving the world requires the sort of large-scale economic planning that only governments can do. We need to replace market anarchy with rational planning and management of a mostly, though not necessarily entirely, publicly-owned economy.
E. Planning for the common good requires democracy.
Rational planning requires democracy. Polls show that 69% of Americans (85% of those ages 18-29), 71% of Chinese, 87% of Europeans, nine-in-ten Ugandans, Tanzanians, South Koreans, Chileans, and Brazilians want binding limits imposed on CO2 emissions. Corporations don’t want binding limits. Well, why don’t we get to vote on such questions? We don’t need to be experts. Corporate boards aren’t composed of experts. They’re composed of major investors and politically influential VIPs who solicit experts to advise them, then vote to decide what they want to produce and sell, and hire engineers to figure out how to get it done. Why can’t society do the same – but in the interest of the common good? We need to establish democratic institutions to plan and manage our social economy -- planning boards at local, regional, national and international levels. We have plenty of examples from the Paris Commune to Polish Solidarity in 1980. We have the example of FDR’s National Resources Planning Board -- established by an elected president and congress. And as Greg Palast and co-authors describe in their book on regulation of public utilities, we have a working prototype right now:
Unique in the world . . . every aspect of US regulation is wide open to the public. There are no secret meetings, no secret documents. individuals, industrial customers, government agencies, consumer groups, trade unions, the utility itself, even its competitors. Any and all citizens and groups are invited to take part: Everyone affected by the outcome has a right to make their case openly…In public forums, open to all citizens, the principles of social dialogue and transparency come to life. It is an extraordinary exercise in democracy–and it works.
We see no reason why this cannot be scaled up to the whole economy. If the major U.S. political parties offer no solution to the climate crisis, if they abdicate their responsibility to preserve a habitable planet for our children, then its up to the American left to provide vision and leadership in this struggle -- and right now that looks to be the DSA, the Democratic Socialists of America (of which I am a proud member). As Maria Swart wrote to members on October 23rd:
Limiting global warming below 2 degrees is going to take a monumental mobilization of people from all walks of life, demanding that our lives matter more than corporate interests. Neither Republicans or Democrats have risen to the task of leading this effort. In the absence of their political leadership, we must rise to the occasion.
IV. FROM FDR TO AOC: THE GREEN NEW DEAL
Congressional Representative-elect (D. New York) Alexandria Ocasio-Cortez (aka AOC), the self-confident 28 year-old DSAer who won office on the Democratic ticket, has risen to the occasion, drafting a proposed Plan for a Green New Deal that she hopes will be taken up by the new Congress in January 2018. The Plan (and the draft legislation) she writes, shall require the achievement within 10 years from the start of executing the following:
- 100% of national power generation from renewable sources,
- building a national, energy-efficient, “smart” grid,
- upgrading every residential and industrial building for state-of-the-art energy efficiency, comfort and safety;
- decarbonizing the manufacturing, agricultural and other industries;
- decarbonizing, repairing and improving transportation and other infrastructure;
- funding massive investment in the drawdown and capture of greenhouse gases;
- making “green” technology, industry, expertise, products and services a major export of the United States, with the aim of becoming the undisputed international leader in helping other countries transition to a completely carbon neutral economies and bringing about a global Green New Deal
AOC’s Green New Deal does not stop with decarbonization. She writes that “The Plan . . . shall recognize that a national, industrial, economic mobilization of this scope and scale is a historic opportunity to virtually eliminate poverty in the United States and to make prosperity, wealth and economic security available to everyone participating in the transformation. In furtherance of the foregoing, the Plan (and draft legislation) shall:
- provide all members of our society, across all regions and all communities, the opportunity, training and education to be a full and equal participant in the transition, including through a job guarantee program to assure a living wage job to every person who wants one
- take into account and be responsive to the historical and present-day experiences of low-income communities, communities of color, indigenous communities, rural and urban communities and the front-line communities most affected by climate change, pollution and other environmental harm;
- mitigate deeply entrenched racial, regional and gender-based inequalities in income and wealth (including, without limitation, ensuring that federal and other investment will be equitably distributed to historically impoverished, low income, deindustrialized or other marginalized communities
- include additional measures such as basic income programs, universal health care programs and any others as the select committee may deem appropriate to promote economic security, labor market flexibility and entrepreneurism; and
- deeply involve national and local labor unions to take a leadership role in the process of job training and worker deployment.”
What's said and not said
To be sure, the process of “decarbonization” outlined above is abstract, lacks specifics, and is far from fully worked out. Most obviously, it’s hard to imagine how the government could decarbonize fossil-fuel producers and industrial consumers without taking them into public hands. What's not said is that decarbonization has to translate into shutdowns and retrenchments of actual companies. How does one decarbonize ExxonMobil or Boeing or Delta Airlines or Duke Energy? These companies live and breathe fossil fuels. But there’s no mention of shutdowns and retrenchments. There's no mention of buyouts or nationalization. There’s no explicit call for a National Planning Board to reorganize, reprioritize and restructure the economy. Further, there's no acknowledgement that an infinitely growing economy is no longer possible on a finite planet. There’s no acknowledgement of the imperative need for economic de-growth, substantial de-industrialization and not just in fossil fuel-based industries.
"Decarbonization": a self-radicalizing transitional demand
And yet, the audacity and breadth of the technical and socio-economic transformations here envisioned call to mind nothing so much as the economic and social revolution that FDR’s New Deal brought about (albeit within the framework of capitalism), and goes beyond him in some respects. Occasio-Cortez may be just 28 but she is a bold, feminist, anti-racist, and socialist-inspired successor to FDR. With this Green New Deal she's taking the global warming discussion to a new level, changing the conversation and challenging the political economy. She's not calling for cap and trade or carbon taxes or divestment or any other market "solutions." She's issuing a full-throated call for "decarbonization," in effect throwing the guantlet down to capitalism and challenging the system because, as we know, there is no way to decarbonize an economy based on endless growth, endless resource consumption, and thus inevitably, endless pollution and CO2 emissions. Thus the push for decarbonization must inevitably raise the question of nationalization because, how else can government enforce the retrenchments and shutdowns needed to save the planet without precipitating economic collapse? The nationalization of the coal and oil producers, the obvious first targets, would in turn raise the question of what to do about all the industries that are based on fossil fuels -- autos, aviation, petrochemicals, plastics, construction, manufacturing, shipping, tourism, and so on. And consideration of how to decarbonize those industries would in turn raise larger questions about who should decide what gets produced, or not -- private companies or society as a whole, through democratic processes. Thus the push for decarbonization is simultaneously a push for democratization.
AOCs’ Plan is first of all, a definitive break with the Reagan-Thatcher-Friedman “capitalism good, government bad” doctrine which holds that the best role for government is to “get out of the way and just incentivize the private sector.” Instead, the Plan calls for robust expansive government to drive the needed changes, for two reasons: (1) scale and (2) time: First, “The level of investment required will be massive. Even if all the billionaires and companies came together and were willing to pour all the resources at their disposal into this investment, the aggregate value of the investments they could make would not be sufficient.” Besides, “private companies are wary of making massive investments in unproven research and technologies; the government, however, has the time horizon to be able to patiently make investments in new tech and R&D, without necessarily having a commercial outcome or application in mind at the time of the investment.” Second: “The speed of investment required will be massive. Even if all the billionaires and companies could make the investments required, they would not be able to pull together a coordinated response in the narrow window of time require to jump-start major new projects and major new sectors.”
AOC explicitly rejects the Reganite assertion of the superiority of the private sector and the efficacy of incentives: “We’ve also seen that merely incentivising the private sector doesn’t work – e.g. the tax incentives and subsidies given to wind and solar projects have been a valuble spur to growth in the US renewables industry but, even with such investment-promotion subsidies, the present level of such projects is simply inadequate to transition to a fully carbon neutral economy as quickly as needed. . . we’re not saying there isn’t a role for private sector investments; we’re just saying that the level of investment required will need every actor to pitch in and that the government is best placed to be the prime mover.”
Secondly, AOC explicitly makes a powerful case for state planning: She calls for a new Select Committee “with a 360° view” to serve the specific function of “examin[ing] emerging issues that do not fit clearly within existing standing committee jurisdictions or cut across jurisdictional boundaries.” The Select Committee requires “a mandate to develop a plan for the transformation of our economy to become carbon neutral.” Having its own Select Committee “ensures constant focus on climate change as the standing committee deals with that and many other issues of the day -- such as wild fires in California, infrastructure, clean water issues, etc. First, they would put together the overall plan for a Green New Deal - they would have a year to get the plan together, with the plan to be completed by January 1, 2020. The plan itself could be in the form of a report or several reports. Second, they would also put together the draft legislation that actually implements the plan.”
This is not yet FDR’s Planning Board. It has no power to nationalize industries, nor is it clear that it would even have the power to order companies like GM to stop producing, say, SUVs, and start producing wind turbines or high-speed trains à la FDR. But as our climate emergency steadily worsens, it will become increasingly apparent that such government planning and direction is essential, and that nationalization via buyouts is the only way to enforce decarbonization while also forestalling capitalist opposition as best we can.
Of course all this sounds wildly utopian in our present political context and this Plan is certain to go nowhere under Trump and a Republican Senate. But a vigorous campaign for this Plan will show why capitalism cannot solve the worst crisis it has ever created and encourage demands for government intervention, government planning to suppress emissions. After all, polls have long shown that citizens want and expect the government to lead the fight against climate change by limiting CO2 emissions, in effect to “do what the science demands before it’s too late.” Let’s hope that with a developing vision and a monumental mobilization around this Green New Deal and around fossil fuel nationalization, we can derail the capitalist drive to ecological collapse and build an ecosocialist civilization to save the human race.
Click here for a fully annotated version of this article.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License