The Ends and Means of Decarbonization: The Green New Deal in Context

Abstract

Disputes about climate policy involve much more than whether or not to reduce greenhouse gas emissions. There is general agreement among proponents of climate policy that strategies should be cost effective, should address distributional impacts, and should incentivize investments in low-carbon technologies. Yet disagreements abound regarding additional goals of climate policy design.

Decarbonizing the economy means changing the sources of energy we use, how we transport people and products, how we produce food, and which resources we consume. Yet even among proponents of federal climate legislation there is strong disagreement regarding policy instruments. Recent proposals for a revenue-neutral carbon tax and a Green New Deal (GND) frame the opposite ends of the debate. On one end, the GND framework treats climate policy as an opportunity to steer the trajectory of the U.S. economy while also correcting social and environmental injustices. Proponents of the most expansive iterations of a GND argue that it is not possible to separate justice and economic considerations from environmental policy. At the other end of the spectrum, revenue-neutral carbon tax proposals reject the creation of new government programs and focus on controlling greenhouse gas emissions rather than the economic and social impacts of the policy.

This Essay identifies core disputes about the non-emission goals in state and federal climate policy debates that create barriers to legislative consensus. The Essay begins with a comparison of recent proposals to mitigate climate change, including pricing carbon via a carbon market or carbon tax, regulatory measures such as the Obama-era Clean Power Plan, state-based policies, and the GND. It then identifies three conflicts, the resolution of which will shape future climate policy developments: the role of decarbonization as technology policy, social justice policy, and fiscal policy. Deploying low carbon technologies is a critical piece of the climate mitigation puzzle, but stakeholders disagree whether decarbonization strategies should prioritize renewable energy or include technologies such as nuclear or carbon capture. Each policy discussed in this Essay considers some range of social impacts (at minimum, cost increases), but differ significantly about which social impacts to address and the how to address them. The policies also adopt different approaches to the link between fiscal policy and climate policy, with some generating revenue to fund new government programs, some returning revenue to U.S. citizens, and some not addressing the issue. The Essay concludes with comments about the early impacts of the GND on the domestic policy debate and opportunities to resolve.

Keywords: environment, climate change, green new deal, carbon tax, carbon market

JEL Classification: K00, K23, k32, Q48, Q54