Financing a Global Green New Deal: Economic Transformation and Climate Stabilization

This podcast episode features Rob Johnson and Bob Pollin discussing the intertwined challenges of post-pandemic economic recovery and the climate crisis, advocating for a Global Green New Deal. Pollin highlights the severe economic downturn, comparable to the 1930s, evidenced by nearly half of the U.S. labor force applying for unemployment insurance. He emphasizes the urgent need for substantial fiscal stimulus, praising the Biden administration's proposed $1.9 trillion package and its "Build Back Better" plan for its scale ($2 trillion over four years) and focus on job quality and a just transition for fossil fuel-dependent communities.

A central theme is overcoming political and social resistance to climate action. Pollin stresses the necessity of robust transition programs for workers in fossil fuel industries, guaranteeing pensions, new jobs with comparable pay, and necessary retraining and relocation. He cites the successful transformation of Germany's Ruhr Valley as a model, contrasting it with the collapse of Detroit as a cautionary tale. The discussion also addresses the "degrowth" argument, which Pollin refutes by demonstrating that it leads to economic depression without achieving significant emissions reductions, advocating instead for a transition to renewables and efficiency to drive green growth.

The conversation delves into financing mechanisms for a global green transition. Pollin proposes a multi-pronged approach including cutting military spending (e.g., 5% could cover 15% of global Green New Deal financing), implementing a carbon tax with redistribution (e.g., 75% returned to citizens as equal shares), eliminating fossil fuel subsidies, and utilizing debt monetization through central banks buying green bonds globally. He argues that these measures are analytically straightforward and can fund the necessary investments, which he estimates at 2-3% of global GDP annually.

Broader implications include the need for global coordination, particularly addressing the concerns of developing countries like India, which require significant financial and technological assistance to transition to clean energy without hindering their economic growth. Pollin suggests rich countries subsidize clean energy deployment in these regions, potentially through green bond purchases. The discussion also touches on the ethical and practical imperative of reallocating funds from wasteful spending, such as excessive military budgets (specifically nuclear weapons, as inspired by Daniel Ellsberg's work) and inefficient healthcare systems, to finance climate action and improve societal well-being.

"sometime between now and i mean last march and now roughly half of the people that work in the united states who have applied have gone have become unemployed so in terms of the severity of the downturn it's equivalent but not more so than the 1930s"

"the number one issue is you've got to tell us the story that's real and if you talk about something equivalent to trade adjustment assistance or other transition programs they they call it burial insurance"

"the number of jobs that are going to be created through transitioning to the green economy are far outstripped the job losses that you will experience annually in west virginia"

"we have to guarantee their pensions, we have to guarantee that they get another job, we have to guarantee the pay at the new job is at least as good as the old job and yeah retraining as necessary relocating is necessary and you have to it has to be real"

"we will not succeed politically unless we get these people on board"

"detroit is a very good what I'll call canary in the coal mine example for what not to do in transformation if you want to have a coherent society"

"even the people on the left think the government is captured by money politics and won't serve them because it's not designed to serve them"

"when was the last time we had a treasury secretary say such a thing that's right um and she's insisting and she's saying sure there's inflation fears but they're far outstripped by the fears of what of people's lives getting ruined having been decimated"

"solar has come down and cost 80 percent in in eight years"

"the only way is to uh transition the system through renewables and efficiency"

"we can have two percent inflation and die or four percent inflation and transform the energy system so we go on living why is it better to die and keep the inflation rate lower"

"cutting military spending by even five percent that'll get you 15 of the way that you need for financing a global green new deal"

"if the nuclear stocks come way down the probability or even the possibility of what they call the nuclear winner... goes to zero"

"in the rural areas of india there is is basically half the people have no electricity whatsoever so if you start putting up small scale solar operations this is going to be transformative for their lives"