We often feel discouraged about the news of frequent climate disasters, harsh warnings regarding our inaction, and divisive politics. Instead, let us review the advantages of green deals and imagine climate improvements in the United States.
Green programs create jobs. They are generally more labor-intensive than many alternatives. For example, the work to increase our existing and new buildings' energy efficiency primarily involves the construction industry that is labor-intensive and often available locally. The same is true for many urban improvements, such as creating more green areas, forests, bicycle lanes, and walkways. For example, in Europe, "Green jobs are among the fastest-growing and the most resilient of the European economy. Instead of being outsourced, local skills are being sought in sectors like energy efficiency of buildings, pipe insulation, recycling and innovative renewable technologies. In these areas, employment has grown even during the crisis" (Connie Hedegaard 2020, p.1). Green also transforms jobs, as evidenced by the auto industry's conversion to electric and high-efficiency vehicles. It is essential to emphasize programs for job training and re-training. The "brown" sectors will be aided in this transition. "The green economy has grown so much in the US that it employs around 10 times as many people as the fossil fuel industry" (Vaughan 2019, p.1). The researchers estimated the green economy provided nearly 9.5 million jobs in 2015-2016.
New products and markets
Green opens up multiple new products and markets, also for exportation. In a recent study, researchers found that the three most important western economies with the highest potential for the production and exportation of the new sustainable goods are that of the US, Germany, and Italy (Mealy and Teytelboym 2020). Already in 2016, the US green economy was worth 1.3 trillion dollars, 7 percent of the US GNP (Vaughan 2019). As the price of fossil fuels increases to reflect the damage and health costs of pollution and climate change, this will accelerate the transition to green power and increase energy efficiency profitability. According to the US Energy Information Administration, solar and wind will represent 75 percent of the US's additions to electricity generation capacity in 2020. Certain US companies stand out. NextEra Energy is already the world's largest utility company and generator using renewable energy. See how they built a city amphitheater with solar. Tesla Inc., the leading US electric automaker, has increased its market value substantially, surpassing that of Exxon Mobile.
A new model of consumption is emerging, which is based on the consumer’s consideration of the carbon footprint of products and services to be purchased. Quality is replacing quantity.
Our cities are going to much more livable. Green is going to be everywhere with more parks, trees, forests, and open spaces such as plaza, sports centers, outdoor restaurants, and pubs. Public transport will be comfortable and fast. Vehicles should be electric or hydrogen powered. The air will finally be clean. Waste is minimized and recycled. There will be more walkways and bicycle lanes. Low-cost housing will be refurbished and become energy efficient. All existing buildings will have stringent energy retrofits, as those programmed for NYC. Adequate stormwater systems will be constructed for low areas and transportation. To get a feel for some of the most advanced sustainable cities, visit best sustainable cities.
In the suburbs, even more parks, trees, and forests will flourish, emphasizing gardening and local food production. In Europe, legislation is being introduced to create independent energy communities that can trade energy among their members and external sources. Power generation is to be exclusively green. Such energy communities will become widespread. Energy-efficient, low-cost housing will be built or refurbished. More cultural and sports centers will be created. Work will often take place at home or in nearby cultural/communication centers. Rapid and comfortable public transport to urban centers will be built. The EPA runs the Smart Growth Network that provides interesting suburban examples.
Rural areas and agriculture
Green plans propose working with ranchers and farmers to remove GHG and pollution in agriculture by investing in sustainable farming and land use practices that increase soil health, mainly supporting family farming. This eco-regenerative agriculture and organic farming will offer new opportunities. R&D for new seeds and farming techniques are required. Farms near suburbs and cities will emphasize their local production and lower environmental footprint. Rural solar and wind farms will multiply. With more space, near zero energy buildings can be experimented.
Green means mitigation and adaptation. The two pillars of mitigation are investments in energy savings and green (solar and wind) power. Energy efficiency will become even more profitable as the price of energy reflects the cost of pollution and climate change. Solar and wind power for electricity are now competitive and profitable with a reduction in costs due to significant technological development and economies of scale, both ongoing. Adaptation measures such as improved forest management and upgrading of stormwater systems will be profitable in the long term, as they reduce damage to property and public health over the years. Many Californians living in forest areas wish that more preventive measures had been taken. Our growing experience with adaptation will help us invest and manage better.
Available private capital
The overall investments required for the green transition are large and urgent, also because the quicker we invest and reduce GHG emissions, the less damage we will incur in the long run. Rifkin estimates that our current annual spending on infrastructure at the relatively low level of 2.3 percent of GDP should be doubled to 4.6 percent over the next 20 years to complete his plan for US green infrastructure (Rifkin, 2019). The deal of Sanders would cost 5.7 percent of GDP annually for 15 years (Galvin & Healy 2020), not very different from Rifkin. It is noteworthy that China spent 8.3 percent of GDP on infrastructure from 2010 to 2015.
Critics of the Green New Deals assume that most of the funding would be by the federal and state governments. However, this may not be the case. For example, the US municipal bond market is one of the oldest and most experienced in funding infrastructure projects, enabling ample participation by private investors. Also, an important alternate source of funding is likely to come from the private and public pension funds. They have a significant amount of assets: private pension funds have accumulated $18.8 trillion in assets or 87.5 percent of the GNP in 2019, with all retirement vehicles (private and public) totaling 147.1 percent of US GNP (OECD 2020). In 2015 the Department of Labor issued an interpretive bulletin stating that for private pensions, the ESG investing, impact investing, and economically targeted investing (ETI) are not prevented by the law, nor are pension funds prohibited from considering ES social G factors in investment decisions. The ERIS Act encourages fiduciaries to consider factors that potentially influence risk and return and ESG issues, including climate change (Dept. of Labor 2015).
Now pension fund trustees are taking a more socially responsible approach to investing, adopting environmental, social, and governance (ESG) principles and beginning to consider an exit from investments involving fossil fuels. Last year top US pension funds were asking electric utilities to accelerate efforts to cut carbon emissions (Kerber 2019). Pension funds could be ready to finance organizations investing in green infrastructure. Also, private green bonds dedicated to financing green infrastructure within private companies are becoming popular, as witnessed by the recent offerings by Apple and Google. Similarly, companies with high ESG scores are presumably making green investments. In addition, a strategic global trend is emerging: US corporations that produced abroad, for US markets, are now bringing their manufacturing home, "re-shoring." They will need a new and modern infrastructure and could help to build it. Pension funds, green bonds, municipal bonds, and re-shoring companies are sources and channels of private capital that could significantly reduce the need for public financing of a green new deal. The public administration is needed to guide the deal, remove subsidies, and intervene when private initiatives are not appropriate. Public financing is required primarily for the longer-term adaptation measures, such as better managing of federal forest lands.
Our natural resources will be protected, conserved, and enhanced. At the same time, biodiversity and ecosystem services are sustained. Notably, our GHG emissions will be significantly reduced, allowing us to meet our obligations of the 2015 Paris Agreement. And due to investments in adaptation, the US will have greater climate resilience.
A recent review and meta-analysis of 143 studies in 20 countries show that living near green space is associated with multiple health benefits. Green space is defined as open land with natural vegetation, including urban parks, open public spaces as well as street trees and greenery. "Statistically significant health denoting associations between high versus low greenspace exposure groups were identified for self-reported health, type II diabetes, all-cause and cardiovascular mortality, diastolic blood pressure, salivary cortisol, heart rate, heart rate variability (HRV), and HDL cholesterol as well as preterm birth and small size for gestational age births. Reductions were also found for incidence of stroke, hypertension, dyslipidemia, asthma, and coronary heart disease" (Twohig-Bennett & Jones 2018, p. 633). People living nearer to nature have lower levels of stress and report being in good health. This encouraging study needs to be followed by additional research exploring possible explanations.
Greater social inclusivity
Green encompasses sustainable development, which implies the inclusion of lower income families. Every citizen should have the right to a decent environment, and no one should be left behind. This calls for the requalification of energy-efficiently housing and construction of new efficient, low-cost housing in poor areas, particularly in the suburbs and cities. Green areas also will be multiplied in these neighborhoods. Increasingly we will involve family, school, neighbors, and fellow workers in our energy and environmentally related decisions. It is educational and profitable to learn how to be energy frugal and use green resources. Shared environmental activities may give many of us a new sense of being American, together again.
In conclusion, a green infrastructure deal will help America and help us do our part to save the planet! Smart money is hedging its bets; in the worst case, we will have a beautiful, healthy, and profitable (green) America.
Department of Labor (2015), Interpretive Bulletin Relating to the Fiduciary Standard under ERISA in Considering Economically Targeted Investments, Federal Register, October 26. 2015-27146, accessed September 30, 2020.
Galvin, R., Healy, N., (2020), The Green New Deal in the United States. What it is and how we pay for it, Energy Research and Social Science, 67(2020) 101529.
Hedegaard C., (2020), Commission to maximize job opportunities in the green economy, European Commission site, accessed September 26, 2020.
Kerber, R., (2019), Big US pension funds ask electric utilities for decarbonization plans. Reuters site, February 28, accessed September 25, 2020.
Mealy P., Teytelboym, A., (2020), Economic complexity and the green economy, Research Policy, April 2020, DOI: , accessed September 20, 2020.
OECD (2020), Pension Funds in Figures, June, OECD site, accessed September 29, 2020.
Rifkin, J., (2019), The Green New Deal (p. 179). St. Martin's Publishing Group. Kindle Edition.
Twohig-Bennett, C., Jones A. (2018), The health benefits of the great outdoors: A systematic review and meta-analysis of greenspace exposure and health outcomes, Environmental Research, Volume 166, Pages 628-637.
Vaughn, A., (2019), US green economy has 10 times more jobs than the fossil fuel industry, New Scientist, October 15, 2019.