PETROANALYSIS || ARTICLE
The New Green Deal: the Democrats’ push on climate change
The New Green Deal is a Democratic Party shot at an effective climate change policy for the US.
Representative Alexandria Ocasio-Cortez (AOC) and Senator Edward Markey launched a motion for a resolution detailing the support of Congress for a New Green Deal (NGD). That is, it is not a proposed law. Its central objective is for the US to achieve a net zero emission of greenhouse gases by 2030.
It is an ambitious plan to rebuild the economy of that country, and by extension to the world of energy beyond its borders, since it seeks to generate 100% of the nation’s energy from renewable sources, make all buildings efficient in the use of energy and eliminate CO2 and other greenhouse gases from the transport sector and industry.
This implies massive investments in research and development for the US to lead the world in clean energy technology and thus overcome the current backwardness with regard to China and to the European Union. In addition, the NGD seeks progressive policies to ensure attractive jobs, basic income and universal health care.
The resolution is co-sponsored by 60 members of Congress and nine senators, including Democratic presidential candidates Cory Booker, Kirsten Gillibrand, Kamala Harris and Elizabeth Warren.
The reports of the Intergovernmental Panel on Climate Change of the United Nations reinforce the central objective of the resolution since “unprecedented changes” are needed to maintain the global temperature increase by 1.5ºC above pre-industrial levels.
The authors of the NGD are inspired by citizen initiatives, the private sector and state and local governments aligned with the Paris Agreement to combat the damage caused by climate change, thus opposing the disavowal of Paris (2015) carried out by the Trump Administration.
It should be noted that large private corporations such as Facebook, Amazon, Walmart, Toyota, etc., are restructuring their businesses adapting them to reduce CO2 in order to work on a long-term sustainable platform with an energy matrix based on renewables. Apart from that, there is the accelerated energy change seen in the Nordic countries and others in Latin America such as Costa Rica, Chile and Uruguay.
Even Saudi Arabia, which has made common cause with the Trump government to oppose the commitments made in Paris, has raised an aggressive and massive program of renewable energy development with a view to changing the energy matrix that gravitates in the world economy.
This action by private corporations anticipates what will become an imperative, sooner rather than later, such as a massive government intervention such as what the NGD inspires.
This urgency also concerns measures for the decarbonisation anticipated by oil companies such as Exxon that are pushed by their shareholders to deploy measures that prevent the collapse of their assets in a world that moves more quickly to an energy matrix without fossils.
In this regard, it should be mentioned that in response to the Exxon report “2019 Energy and Carbon Summary”, Bob Litterman, former head of risk management at Goldman Sachs and current chairman of the risk committee at Kepos Capital, a New York investment firm stated that “… this report says that it is possible for the world to move aggressively to limit fossil fuels and that will mean that there will be less demand and lower prices; it will be a more competitive economy and there is a risk that some of its reserves will not be economic “.
The political viability of the NGD at this time is small, despite the fact that the Democrats control the lower house of the US Congress, and their inspirers identify with the left in this party. However, this resolution attempts to emulate the New Deal launched by Franklin Delano Roosevelt, which was developed between 1933 and 1938 under Keynesian inspiration to transform the economy and establish a welfare state in order to counteract the liberal policies that led to the Great Depression, 1929.
Hence, it is said that the realization of the NGD goes through a political revolution that seems to rest on the growing consensus of the population on the urgency demanded by measures aimed at tackling climate change. Then, politically, the NGD would be a cry to galvanize the population, thus making the actions needed to deal with climate change more comprehensible.
It is not difficult to think about the impact this would have on a prolonged rise to power of the Democratic Party. Suffice it to recall that Franklin Delano Roosevelt, of the Democratic party, was the only one to win four presidential elections in that nation: the first in 1932, the second in 1936, the third in 1940 and the fourth in 1944.