low-income individuals and families during the process of transformation, the AOC GND is more ambitious. In the words of the veteran climate campaigner Bill McKibben, it seeks to ‘remake not just a broken planet, but a broken society’.13 It puts members of ‘frontline and vulnerable communities’ front and centre as beneficiaries of the Green New Deal. The drafters of the Resolution are acutely conscious of the 1930s New Deal’s ‘intimate partnership with those in the South who preached white supremacy’, and of the deliberate and racist exclusion of many black people from the economic gains of that era. Hence
it is the duty of the Federal Government to create a Green New Deal … to promote justice and equity by stopping current, preventing future, and repairing historic oppression of indigenous communities, communities of color, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities, and youth (referred to in this resolution as ‘frontline and vulnerable communities’).14
The British Green New Deal, as noted above, has adopted a more internationalist perspective than the American versions of the programme, calling on OECD governments to help finance massive investment in climate-change adaptation and clean energy for low-income countries.
Finally, the British Green New Deal (in both the first and subsequent reports) provides something absent from the US version in that it expands on the question of how the GND could be financed, deploying both monetary and fiscal policy, but with an emphasis on monetary policy.
1 System Change, Not Climate Change
We have been warned by climate scientists that to avoid the most dangerous impacts of climate breakdown and global heating, then humanity collectively has (starting from 1870) a ‘carbon budget’ of about 3,200 billion tonnes of carbon dioxide emissions to work with.1 At the current rate of global emissions, this budget would be used up within ten to twelve years. Worse, in 2019 another group of scientists, the UN’s Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), warned that nature is declining globally at rates unprecedented in human history. The rate of species extinction is accelerating, with grave and immediate impacts on people around the world.2 The UN called for ‘a fundamental, systemwide reorganization across technological, economic and social factors, including paradigms, goals and values’.3
The Green New Deal (GND) is a blueprint for bringing about that urgent system-wide reorganization within a short time period.
The first question we should ask is, whose deal is this? Can the Green New Deal be a single global plan, implemented by a global authority, or can it be managed more locally?
As Herman Daly, pioneer of ecological economics and the architect of ‘steady state’ economics, has argued: the human economy is a subsystem sustained and contained by a delicately balanced global ecosphere, which in turn is fuelled by finite flows of solar energy.4 The earth’s life support systems do not recognise boundaries. So can the New Deal work on any lesser scale than the totality of the globe?
While the impacts of the current crisis are felt everywhere, the largest share of historical and current global emissions of greenhouse gases originated in rich countries. Meanwhile, per capita emissions in poor countries are still relatively low. Ecological justice therefore requires a major redistribution of wealth, from rich producers and emitters of toxic fossil-fuel emissions, to low-income countries.
Furthermore, as the Global Commons Institute (GCI) has argued, rich countries must reduce emissions until per capita emissions converge across the world. The proposal for ‘contraction and convergence’ has for some time now been advocated at the UN.5 It has failed to gain traction because global institutions are weak, are largely unaccountable and lack political leadership. It is clear we cannot rely on global initiatives as the only hope.
There is an alternative approach: international cooperation based not on global institutions, but on the authority of nation states. For the Green New Deal to be transformational, its implementation must be at the level of democratic accountability. Policies agreed at an international level would be implemented and enforced by locally and nationally accountable institutions that reflect domestic conditions.
But even if we can create policy at the level of the state or of local government, does this mean that those active in the markets of the global financial system will support the policies of different nation states? Will the existing dollarized financial system – no longer tethered to the real economy – support and finance a Green New Deal at national level? We have to get real and accept that, with some exceptions, the sector would not help finance a massive climate stabilisation project on terms that are acceptable and sustainable.
As things stand, those that operate in globalised capital markets behave as ‘masters of the universe’. They remain aloof and unaccountable to the governments and communities for whom the transformation of systems is an urgent task. If we are to mobilise the financial resources needed for the massive changes required to conserve, restore and sustain life on earth, then the globalised financial system must be subordinated to the needs of nations, and made servant to the task of transformation.
If the global sector is to be tamed, then a first challenge will be to tackle the hegemony of the currency that sustains globalised finance: the United States dollar.
Imperial Power and the US Dollar
The pre-eminence of the dollar came about as a result of the US strong-arming the rest of the world into adopting its currency as the world’s ‘money’ at the 1944 Bretton Woods conference. Keynes had argued for a global currency, not tied to any one country, and managed in the interests of the international community. He was defeated at Bretton Woods, as the US imposed its will on a weakened Europe. Today that decision still allows the US to enjoy a ‘free lunch’ at the expense of the rest of the world. Its ‘exorbitant privilege’ is a reward for the insurance it provides the rest of the world, especially in times of crisis. As the Federal Reserve acts as global lender of last resort, the US made trillions of dollars available to European and Asian banks during the Great Financial Crisis of 2007–09. This ‘insurance’ is valuable at times of crisis, but it could just as easily have been provided by an independent, international central bank working with, and answerable to, all nations, not just the most powerful.
The ‘exorbitant privilege’ enjoyed by the United States is remarkable given that the country sustains ever-rising external debt and deficits, because global demand for the dollar exceeds US production.6 In contrast to Britain’s imperialist role as a major exporter of capital, the US is a major capital importer. It uses its power to attract financial resources, surpluses of capital from Asia and the oilexporting countries.
A second great benefit the United States enjoys is the power to borrow in its own currency, over whose value it has some control. This means that the US avoids the exchange rate risks faced by other countries when they borrow and have to repay in a different currency. If the dollar were to depreciate, that would not matter to US authorities, as the nation does not own debt issued in euros, yen or sterling. When the dollar falls in value, the debts owed by the United States fall in value too. Thus the dollar as the world’s reserve currency regularly affords the US cheap, low-risk finance with which to sustain its large trade deficit and its exorbitant consumption of the world’s goods and services.
The hegemony of the dollar in global finance remains unchallenged despite the recent financial crisis, as the historian Adam Tooze has pointed out. In fact, the US dollar did not merely survive the 2008 crisis, but was reinforced by it.7 As a result of both the global financial crisis and the weakness of the Obama administration, Wall Street
