00:03[Music]00:07hello and welcome i’m lynn fries00:08producer of global political economy00:10or gbe news docs today i’m joined by00:13nick00:14buxton he’s going to be giving us some00:16big picture context on the great00:18reset a world economic forum initiative00:20to reset the world00:22system of global governance a worldwide00:25movement crossing not only borders but00:28all walks of life00:30from peasant farmers to techies is00:33fighting against this initiative on the00:35grounds that it represents a major00:37threat00:38to democracy key voices from the health00:41food education indigenous people and00:44high00:45tech movements explained why in the00:48great00:48takeover how we fight the davos capture00:52of global governance a recent webinar00:54hosted by the transnational00:56institute today’s guest nick buxton00:59is a publications editor and future labs01:02coordinator01:03at the transnational institute he’s the01:06founder01:06and chief editor of tni’s flagship01:09state of power report welcome nick01:13thank you very much liam nick the01:16transnational01:17institute was was co-organizer of the01:20great takeover webinar so what is it01:24that you’re01:25mobilizing against uh in opposing this01:28great01:28reset initiative what we’re really01:31concerned about is01:32this initiative by the world economic01:34forum01:35actually looks to entrench the power of01:37those most responsible for the crises01:39we’re facing01:40um and in in many ways it’s a trick it’s01:43a sleight of hand01:45uh to make sure that things continue as01:48they are01:49to continue the same and that will01:51create more of these crises more of01:53these pandemics will01:54deepen the climate crisis which will01:56deepen inequality01:58and it’s not a great reset at all it’s a02:00great corporate takeover02:01and that’s what we were trying to draw02:02attention to what we’ve been finding02:05in in recent years is that um really02:07there is02:08something i would call it a kind of a02:10global02:11silent coup d’etat going on in terms of02:14global governance02:15most people don’t see it and people are02:17familiar have become familiar with the02:19way that corporations02:21have far more influence and are being02:24integrated into policy-making and02:26national level02:27they see that more more in front of them02:30people see their services being02:32privatized02:33and they see the influence of the oil02:36companies or the banking sector that has02:38stopped02:39actions such as regulations of banks or02:42are dealing with the climate crisis what02:43people don’t realize is at a global02:45level02:46there has been something much more02:48silent going on which is that their02:50governance which used to be by nations02:53is now increasingly be done by02:55unaccountable bodies02:57dominated by corporations and part of03:00the problem is that that has been03:02happening in lots of different03:03sectors but people haven’t been03:05connecting the dots03:07so what we’ve been trying to do in the03:08last year is to talk with03:11people in the health movement for03:12example people involved in03:14public education people involved03:17in food sector to say what what is03:20happening in your sector and what we03:22found is that in each of these sectors03:24global decisions were used to be03:25discussed by bodies such as the wh03:28o or such as the food and agriculture03:30organization03:32were increasingly done by these these03:34unaccountable bodies03:36and just to give an example uh we have03:39now the global pandemic and one of the03:41key bodies that is now making the03:43decision03:43is is a facility called kovacs you’d03:46have thought03:47global health should be run by the world03:49health organization it’s accountable to03:51the united nations03:53it has a system of accountability well03:55what’s actually happening is that world03:57health organization03:58is just one of a few partners that04:01really04:02has been controlled by corporations and04:04corporate interests04:05in this case is gavi and sepi and they04:08are both bodies which which don’t have a04:11system of accountability04:13where it’s not clear who chose them who04:15they’re accountable to04:17or how they can be held to account and04:20what we do see is that there’s a lot of04:22corporate influence in each of these04:23bodies04:24what this webinar was about was bringing04:26all these sectors together04:28who are seeing this silent coup d’etat04:30going on04:31in their own sector to map it out and so04:34one of the things that you’ll04:35have seen in the in the webinar is is04:37this mapping of the different sectors04:40who are um who are seeing this going on04:43and the04:43idea is just to give a global picture04:45that this is something happening we’ve04:47had04:48we’ve had more than a hundred of these04:50um of these mult they’re called04:52multi-stakeholder bodies04:54uh coming to coming to the fore in the04:57last 20 years04:58um and and there’s been very little kind05:00of taking note of that and taking stock05:02of what’s emerging05:04and what’s emerging is this silent05:06global coup d’etat05:08so what you find then in the big picture05:11that you’re getting05:12is that a global coup d’etat has been05:15silently emerging and at the heart of it05:18is a move05:19towards multi-stakeholder model of05:21global governance and05:23that this is the model that’s the path05:25and mechanism05:27of a corporate hijack of global and05:29national governance05:30structures and the world economic forum05:32agenda fits into all this is the wef of05:35course is05:36one of the world’s most powerful05:38multi-stakeholder institutions05:40so nick in explaining what all this05:42means let’s start with some of your05:44thoughts05:45on the history of how we got here05:49i think what we had was in the 90s was05:52the kind of height of neoliberalism we05:53had05:54we had um the increasing role of05:56corporations as05:58and the deregulation of the state and it06:01really started to come through in 200006:02with the global compact06:04and where the un invited in uh you know06:07corporations and the idea was that we’re06:09going to need to involve corporations06:11one because06:12we will need private finance became the06:15kind of motto06:16the mantra so we need to involve06:18corporations they can be part of the06:20solution so it was06:21partly financed it was partly the06:22withdrawal of state06:24from kind of global cooperation um06:27and and that started to invite06:30corporations into the global government06:32where corporations were increasingly um06:34being invited into these kind of bodies06:37that dovetailed with this whole movement06:39um called06:40the corporate social responsibility that06:42sid corporations06:44weren’t just profit-making vehicles they06:46could be socially responsible06:48actors um and and so increasingly06:51corporations were pitching themselves as06:53as not just um corporate entities but as06:57global citizens06:59um and and one of the key vehicles for07:02that of course is the world economic07:04forum which has07:05really been articulating07:08through klaus schwab and through their07:10whole and through their whole07:11work uh this idea that’s that07:14corporations07:16should firstly be social responsible and07:18secondly as part of that they should be07:20treated07:21as social entities and should be07:24integrated into governance and decision07:26making07:27that we needed to move from what was07:29considered an07:30antiquated state-led07:33multilateral approach to a much more07:36agile governance system07:38and this is again the kind of mantra of07:39coming in of the private sector being07:42efficient07:43that the private sector if you involve07:44them in decision making07:46you would get more faster decisions you07:48get agile decisions you’d get better07:50decisions07:51and so this all really came together um07:53and and07:54in in some ways it’s even being07:56consolidated even further07:58the irony is that as as you’ve had08:00nationalist governments come to power08:03that the kind of trump america firsts of08:06the world or modi08:07india first they articulate a08:10nationalist agenda but they haven’t08:12actually questioned the role of08:14corporations in any way whatsoever08:16and as as they’ve retreated from08:18multilateral forums like the united08:20nations08:21they’ve left a vacuum that corporations08:23have been able to fill08:24corporations now say we can be the08:27global actors we can be the responsible08:29actors08:30we’re the ones who consort to tackle the08:32big crisis we face such as inequality08:35such as climate change08:37um such as the pandemic and so so really08:40this08:40this we’ve had this convergence of08:42forces coming together08:44where as states have retreated um08:47corporations have filled the vacuum08:49you mentioned earlier that the world08:50economic forum was one of the key08:52vehicles for these08:53ideas and the wef also went big in08:57filling that vacuum that you’re talking09:00about09:00tni reported the wef global redesign09:04initiative09:05stretching back to 2009 created09:08something like09:0940 global agenda councils and industry09:12sector bodies so in the sphere of global09:15governance the wef09:17created space for corporate actors09:19across the whole spectrum09:21of governance issues from cyber security09:23to climate change you name it09:25so yeah the global redesign initiative09:27was one of the first initiatives that09:29the world economic forum launched09:31in the wake of the financial crisis um09:35and their idea was that we needed to09:37replace what was09:39uh an inefficient um multilateral system09:42that was not able to solve problems09:45with a new form of things so they were09:46saying instead of a multilateral where09:48nations make decisions in global09:50cooperation09:51we needed a multi-stakeholder approach09:54which would bring together09:55all the interested parties in small09:58groups09:59to make decisions and the global10:01redesign initiative was really a model10:03of that they were trying10:04to say okay how do we resolve um10:07issues such as the governance of the10:09digital economy10:11and their answer to it is we bring the10:13big tech companies together we bring the10:15governments together and we bring a few10:17civil society players10:19and we’ll work out a system that makes10:21that makes sense10:23um and and so you had a similar thing10:26going on in all these other redesigned10:28councils really their models10:29for how they think governments should be10:31done and some of them have not just10:33become models they’ve actually become10:34the real thing10:36so many of the multi-stakeholder10:37initiatives we’ve seen emerge today10:40have emerged out of some of these10:42councils10:43um the coalition for epidemic10:45preparedness one of the key ones leading10:48kovacs right now the response to the10:49pandemic was launched at the world10:51economic forum so the world economic10:53forum is now becoming a launch pad for10:55many of these10:56multi-stakeholder bodies we should also10:59note the world economic forum is a11:01very well funded launch pad as11:04a powerpoint from the great takeover11:06webinar put it11:08corporations do not pay tax but donate11:11to multi-stakeholder institutions and11:13the wef of course11:15is funded by powerful corporations and11:18business leaders11:19the powerpoint also noted the bill and11:21melinda gates foundation is one of the11:23main funders of multi-stakeholder11:26institutions11:27in contrast multilateral institutions11:30are being11:31defunded on the back of falling11:33corporate tax revenues11:35for nation states given it depends on11:39government donors the11:41u.n regular budget that’s the backbone11:43of funding for the one country one vote11:45multilateral11:46processes of intergovernmental11:49cooperation and decision making11:51has taken a big hit perhaps you could11:54comment on some big picture implications11:57on this kind of11:58changing dynamic that’s going on between12:01corporate actors and nation states12:03yeah yeah i think i think what we’re12:06seeing is that the12:07um as gradually the corporations have12:09become more powerful12:11they they have weakened the capacity of12:14the state12:15so they have reduced the tax basis you12:18know most corporations have seen12:20corporate tax rates drop12:21forward dramatically and even more12:23trillions are now siphoned away in tax12:26havens12:26so the the entire corporate tax base12:28which used to play a much bigger role in12:30state funding has reduced um at the same12:34time12:35they they their influence over policies12:38which benefit corporations12:40has increased so they’re reducing the12:42regulations that were on them they’re12:43reducing all the costs that used to be12:45opposed12:46on the things so you’ve had a weakening12:48of the state and the strengthening of12:49corporations12:51and what’s happened at a global12:52governance level is that they have also12:54moved12:55not just from influencing dramatically12:58through their power12:59their economic power political decision13:01making13:02but in an easy global governance thing13:04it’s the next step forward because13:05they’re not just saying13:06that we want to be considered and we13:09will lobby to have our position heard13:11they’re saying13:11we want to actually be part of the13:13decision-making bodies themselves13:16um and the classic again is if we look13:18at the pandemic with kovacs13:21is that um what i looked actually at13:24just at the board of13:25gavi the the global alliance of vaccines13:28um if you look at the body it’s the13:31board is dominated firstly13:33by big pharmaceutical companies um13:36secondly you have some nations and some13:39and13:40civil society representatives but you13:42have far more13:43interest in the almost half a large13:45number of the board13:46are financiers they come from the13:48finance sector they come from big banks13:51um so they’re they’re i don’t know what13:53they have to do with public health13:55um and wh show is just one of the13:58players so it’s it’s suddenly over14:00crowded by others who have no um14:03public health representation they’ve14:06been dominated by finance and14:08pharmaceutical companies14:09starting to really shape and guide um14:12decision-making14:13and and on the finance side of course14:15bill gates foundation14:17has is now the big player in many of14:19these things and it’s14:21it’s it’s not just donating it’s also14:23involved now in shaping policy14:25so those who give money um in a14:28philanthropic way14:30no matter how they earn that money or no14:32matter what their14:33remit is and who they’re accountable to14:35they’re only accountable to the14:37to to bill and melinda gates um14:40ultimately are now part of the decision14:42making process as well14:44and this has become so normalized that14:46there seems to be very little14:47questioning of it14:48and we will bring together these players14:50now who chose them14:53who who chose this body to come together14:55who’s it accountable to14:56there was a british parliamentarian14:58called tony ben he says if you want tounderstand democracy you need to askfive questions
- what what power do you have
- who did you get it from
- whose interest do you serve
- to whom are you accountable and
- how can we get rid of you15:14if you look at a body that such as15:16kovacs um15:17who who where did they get the power15:19from they just self-convened15:21they just brought together a group of15:23powerful actors15:24they will make a token effort to involve15:27one or two civil society representatives15:29but the power very much lies with with15:32the corporations15:33and and with the financiers those who15:36are financing it15:38and it’s not accountable they chose15:40their body15:41uh if the interests are very clear who15:43it serves it clear15:44it serves the pharmaceutical companies15:46they will of course do certain things15:49um within the remit um but ultimately15:52they will not undermine their best15:53business15:54model even if that business model is15:55getting in the way of an effective15:57response to the15:58pandemic we can’t get rid of them16:01because we never chose them in the first16:02place16:03so it fails really the very fundamental16:05principles of democracy16:07and yet it’s now been normalized that16:09this is the way that global governance16:11should happen16:12nick comment briefly on an agreement16:14that was quite a milestone16:16in this process of normalization of16:19multi-stakeholderism16:20as the way global governance should16:22happen i’m thinking16:23of the uh strategic partnership16:26agreement signed16:27by the office of the un secretary16:29general with the world economic forum in16:322019.16:33so what’s some background in your16:35response to that16:37uh un-w-e-f agreement16:41well the world economic forum has been16:43um advocating this mod16:45model of multi-stakeholder capitalism to16:47replace multilateralism for a long time16:50and and they have been um gradually16:54i would say kind of setting up parallel16:56bodies these multi-stakeholder bodies to16:58make decisions17:00um on major issues of global governance17:02whether it’s the digital economy or17:04whether it’s17:04how to respond to a a pandemic17:08um and and so they’ve they’ve been17:10advancing this model17:11um alongside the un for some time but17:14what what was really concerning to us is17:16that they’re starting17:18to increasingly um17:22engage with the un and start to impose17:25this and start to push this model within17:27the united nations17:29and the classic example was this17:31strategic partnership which was signed17:33in17:33i believe june of 201917:37i don’t think it went even in front of17:38the general assembly so it wasn’t17:40discussed amongst the members it was a17:42decision17:43by the secretariat of the un without any17:46at least any17:46formal systems of accountability to sign17:49a deal with the world economic forum17:51that would essentially in start to17:53involve you17:55world economic forum staff within the17:58departments of the un17:59they would become so-called kind of18:01whisper advisors that18:02the world economic forum would start to18:05have its staff mingling with un staff18:07and starting to make decisions18:09um and there was no system of18:10accountability there was no system of18:12of um of consulting more widely18:16and and we know the world economic forum18:19is is this business forum if you look at18:21its board it’s completely controlled18:23uh by by some of the most wealthy and18:26powerful corporations and many of those18:27corporations18:29are responsible for many of the crises18:31we face and yet here they were being18:32open18:33open armed and welcomed into the united18:37nations to play a very significant role18:38and18:39and we we protested that we said that18:42this is not18:43this is not a way to solve global18:45problems to involve those who have18:47actually responsible for the crisis to18:48resolve it18:50will only lead to solutions that are18:51either ineffective or actually deepen18:53the crises we face18:55um we understand why the u.n is doing it18:57it’s because of this18:58lack of national support is because of19:00the defunding19:02they’re looking to kind of survive as an19:03organization and they’re going to the19:05most powerful players in the world which19:07are the corporations19:08but what they’re going to end up doing19:09is as ultimately undermined in the19:12united nations it will actually19:14damage the united nations because it19:15will remove all the democratic19:17legitimacy that it currently has19:20we desperately need global collaboration19:23and cooperation19:24but it must be based on public and19:26democratic systems of governance19:29not um unaccountable secretive forms of19:32governance dominated by corporations19:35so that’s pretty clear you oppose19:38multi-stakeholderism because it’s an19:40unaccountable19:41secretive form of governance dominated19:44by corporations19:45so as well as being unaccountable the19:49multi-stakeholder model is a voluntary19:52and a market-based approach to problem19:55solving19:56comment on how that also uh fits into19:59why you oppose the multi-stakeholderism20:03yeah the the solutions they’re looking20:05for are volunteeristic20:07where you can come in or out and they’re20:09market-based20:10so they will never actually challenge20:12the business model as it is ultimately20:14what happens is that they make decisions20:16which are not binding and actually force20:19actors like corporations to do certain20:21things20:22they’re based entirely on this voluntary20:23meth model um but it’s a kind of to take20:26it or leave it governance where you can20:28do things that you20:29that look good for your for your annual20:31report20:32but don’t actually change the way you20:36actually operate20:37um and so ultimately they won’t resolve20:39the crisis that we’re facing20:41so it’s not just that they’re20:42unaccountable but they’re actually20:44ultimately very ineffective so if we20:45look at the climate crisis for example20:47we’ll say20:48the only way that we can deal with the20:50climate crisis is market solutions20:52even if we know that really the scale of20:55the climate crisis the urgency20:57and the timing requires us to take much20:59more drastic solutions which will be21:01state-led which will require21:02corporations to reduce emissions21:04and that will start to transform21:06economies um21:08that will have to be taken these kind of21:10public decisions21:12we’re ignoring that entirely for a model21:14which is based on of market21:15incentives which really do nothing to21:18change the business model that has21:19created the climate crisis21:21okay so that goes a long way in21:22explaining why you say the world21:24economic forum great21:25reset initiative is no reset at all21:29nick briefly touch on some of your21:31further observations21:33like why is the multi-stakeholder model21:36is based on21:37market solutions when push comes to21:41shove21:42the profit motive will always win out21:45under this21:45approach to global governance yeah no21:48absolutely i mean corporations will21:50accept market solutions which give them21:52the power21:53to uh to really control the pace of21:56change21:56and so you’ll see it they’re very happy21:58to to produce these corporate social22:00responsibility reports but22:02they will fight tooth and nail for any22:04regulation which actually enforces22:06social environmental goals and so and22:09they will22:10fight on an international level to have22:13trade rules to actually22:14prevent states imposing social22:17environmental goals22:19so so there’s very much an approach22:21where they’re willing to have22:22been washed they’re willing to have the22:24propaganda around social environmental22:26goals but they will absolutely oppose22:29and in any rules would actually22:32control their their environmental and22:34social impacts22:36they do not want anything which actually22:38requires regulation22:40and and impacts which will actually22:42force them to do certain changes they22:44want their changes to be very much ones22:46that they22:47control and which they shape and22:48ultimately that they can ditch22:51at the moment it starts to challenge the22:53profits that they want to make22:55let’s turn now to the coalition in22:58in fighting for a democratic reset23:01on uh global governance so a future23:04where decision making over the23:06governance of global commons like23:08for example food water health and the23:11internet23:12is is done in the public interest and i23:15see this23:16coalition put together resources and23:18it’s posted on your website23:19you’re in the nexus of all this so this23:21time around in the wake23:23of the covet pandemic what’s your read23:27on the situation23:28of peoples versus corporate power23:31this global coup d’etat that’s been23:34going on silently in so many different23:36sectors has been advancing because there23:39hasn’t been enough information and23:41knowledge about it23:42and also people haven’t been connecting23:44the dots to see this is happening in23:45every sector23:47so what’s really important this year in23:49as23:50as and i think it’s particularly23:52important in the wake of the pandemic is23:54that23:54so many movements are coming together um23:57people’s health movement23:59has come together a lot of groups24:01involved in food sovereignty uh the24:04trade union sector24:05coming together they’re all saying uh we24:08do this24:08this is not in our name um and of course24:11these are all groups that you’ll never24:12see24:13in a in a multi-stakeholder initiative24:16whenever they do have civil society24:18partners they don’t involve people on24:19the front lines you won’t find one24:23health union worker in in the kovacs24:27initiative you won’t have public health24:29people really represented24:31represented so these are movements now24:33starting to come together to say that we24:35don’t want this and24:36one of the things we did was launch this24:38letter it’s an open letter and it’s24:40really saying that24:41it’s really alerting people to what’s24:43going on it’s saying that we’re facing24:46this24:46in so many different sectors uh the un24:49is is opening the door the un secretary24:52i should say is opening the door wide24:54open24:55uh to the world economic forum which is24:57the key body advancing24:58multi-stakeholders25:01and and it’s changing governance as we25:03know it it’s25:04and it has no systems of accountability25:06or justice embedded in it25:08and these movements are now coming25:09together to say we we’re25:11we’re opposing this we’re uniting our25:13forces25:14and we’re going to fight back against25:16this we know25:18more than ever before with the pandemic25:20that nationalist25:21solutions to the global crisis will not25:25work we need global cooperation we need25:27global collaboration25:29but if we hand over all that decision25:31making to the pharmaceutical companies25:34for example we won’t be dealing with the25:36real issues25:38such as as trade protection and trips25:42and i um patents and everything that25:45that really benefit pharmaceutical25:47companies and don’t advance public25:48health because they25:49are in control of the process they won’t25:51allow things that affect their profits25:54so we need global solutions but they25:55cannot be led by the corporations25:58which are actually worsening deepening25:59the crisis we face26:02so as we close i just wanted to play a26:04clip of a comment26:06you made back in 2015 about a book you26:09had co-edited26:11titled the secure and was dispossessed i26:14found a review of the book26:15so relevant to our chat today i just26:17want to cite a few lines26:19it said among the books that attempt to26:21model26:22the coming century this one stands out26:25for its sense of plausibility26:27and danger it examines several current26:30trends in our responses26:32to climate change which if combined26:34would result in a kind of oligarchic26:37police state dedicated to extending26:40capitalist hegemony this will not work26:43and yet powerful forces are advocating26:46for it rather than imagining and working26:48for26:49a more just resilient and democratic way26:52forward26:53all the processes analyzed here are26:55already26:56happening now making this book26:59a crucial contribution to our cognitive27:02mapping27:03in our ability to form a better plan27:06so nick in wrapping up briefly comment27:10on that book27:11and then uh play the clip yeah back in27:142011 we noticed a trend going on in27:17terms of climate change where there was27:19was27:20was a lack of willingness to really27:22tackle the climate crisis on the scale27:24it needs and with the27:25with the with the tools and instruments27:28that it needs27:29but there was increasingly uh plans by27:32both27:33the military and corporations for27:35dealing with the impacts of climate27:37change27:38um and they very much looked at it in27:41terms of how do we27:43secure the wealth of those and secure27:45those who already have power and wealth27:48um and and and what that would mean so27:51in the face of climate crisis27:53the solution was very much a security27:55solution we’ve already seen27:57really an increasing role of military28:00and policing28:01and security and the real process28:04of militarization of responses to28:06climate change the most obviously in the28:08area of the borders28:09we see we see border walls going up28:12everywhere28:13the response to a crisis has been has28:16been to kind of retreat between behind28:18fortified fortifications no matter the28:20consequences28:22um and so that that was really that’s28:25that’s really a trend that we28:26that we see increasingly is that climate28:29our response to climate adaptation by28:30the richest28:31countries is really to military to28:33militarize our response to it28:36and that’s that’s a and that’s a real as28:38as that quote you just read28:40that’s a real concern because um it’s28:43the kind of politics of the armed28:45lifeboat28:46um where basically you rescue a few and28:48then you28:50and then you have a gun trained on the28:52rest28:53and it’s it’s both totally immoral and28:55it’s also ultimately28:57one that will sacrifice all of our28:59humanity because29:01we need to collaborate to respond to the29:03climate crisis we need to find solutions29:05that protect the vulnerable29:07we cannot just keep building higher and29:09higher walls29:10against the consequences of our29:11decisions and we need to actually start29:13to tackle the root causes of those29:16crises and that that was very much29:19a picture we started to paint back in29:212015 with the launch of the book the29:23secure and the dispossessed29:25but if anything it’s more pertinent and29:27more pressing than ever before29:30nick paxton thank you thanks29:36keeping the profits the huge profits29:38rolling um even though it’s wrecking the29:41planet so they have no intention long29:42term29:43of changing their business model their29:45business model is wrecking the planet29:47and their determination is how to keep29:49that going and what we see in all of29:51this is that29:52corporations in the military are very29:53much responding29:55in a in a paradigm of control it’s it’s29:58security29:59and this word security suddenly infected30:01every part of30:02daily debate we see it food security30:05we’ve seen it really recently now with30:07everyone saying we need30:08security of our borders to protect30:09against refugees we need water security30:12and in all of these cases what you see30:15is those who are being secured30:17are the corporations and those who have30:20wealth30:21and those who are losing out are those30:22who are actually suffering the most from30:24climate change30:25so the peasant who has their land30:27grabbed in the name of food security30:30the community that no longer has control30:32of their river30:33because a corporation has has taken it30:36in the name of30:36water security all the protesters30:39against coal power station are actually30:40trying to stop the climate crisis30:42being repressed and having the civil30:45liberties taken away in the name of30:47energy security30:49in each of these cases the security is30:51quite clearly30:52for a small proportion of people and30:55insecurity30:56for the vast majority i think this is30:58one of the most important issues of our31:00age is31:01is do we want to leave our future in the31:04hands of corporations in the military
Saving planet, creating jobs are noble ideas—but by combining them, Green New Deal exacts too high a cost
The Green New Deal that Democrats unveiled last week is actually two deals: one to combat global warming, another to create millions of well-paid jobs for targeted groups.
Individually, both goals have their merits. But by combining them, the Green New Deal promises to make climate mitigation both absurdly expensive and deeply partisan and is thus more likely to set back than advance the climate cause.
The premise behind the Green New Deal is right. While the world may not spontaneously combust in 10 years, global carbon-dioxide emissions need to start dropping soon, by a lot, to keep temperatures from rising more than 1.5 degrees Celsius from 1800s levels, according to the Intergovernmental Panel on Climate Change. Increases beyond that raise the probability of extreme weather, deadly heat and rising sea levels.
Because the private market has no incentive to reduce carbon emissions, government intervention is necessary. But not all interventions are created equal, and the Green New Deal’s seem engineered to be as expensive as possible.
Consider its goal of massive public investment to achieve 100% renewable energy in as little as 10 years. Kevin Book, head of research at ClearView Energy Partners, a research firm, estimates replacing the 83% of current U.S. generation that is not renewable with solar photovoltaic, wind and biomass would cost $2.9 trillion—nearly a full year’s tax revenue.
This excludes any cost for interest, operations, maintenance, new transmission lines or compensation to private investors for writing off natural-gas and coal plants with plenty of useful life left. It assumes cheap battery storage that doesn’t yet exist. Even so, this works out to $83 to avoid one metric ton of carbon dioxide.
The Green New Deal’s plan to upgrade every building in the U.S. to “maximum energy efficiency” is even more questionable. A study by Meredith Fowlie, Michael Greenstone and Catherine Wolfram in the Quarterly Journal of Economics found the federal government paid an average of $4,585 each to weatherize homes in Michigan. Extrapolate that to 95 million homes nationwide, and the bill tops $400 billion. The cost of avoided carbon dioxide: up to $285 per ton.
To understand how high $83 to $285 per ton of carbon dioxide is, consider that Barack Obama’s economists put the economic harm of a ton of CO 2 at $50. Or that you can pay a power producer
- $6 to reduce emissions by one ton in New England,
- $15 in California, and
- $25 in the European Union,
based on emission permit prices in those jurisdictions, notes Mr. Greenstone, an economist at the University of Chicago.
Yet in the Green New Deal, trillion-dollar price tags are a feature, not a bug. That is because its mission is to create “millions of good, high-wage jobs” in “front-line and vulnerable communities.” The higher the price tag, the more jobs it creates. How to pay for it? Its Democratic sponsors would raise taxes on the rich and borrow the rest, including from the Federal Reserve, just as the U.S. did during World War II, dramatically boosting output and employment.
But in 1941, the U.S. had plenty of unused resources to mobilize: just 28% of prime-aged women had jobs. By 1945, 35% did and today, 74% do. (The data aren’t strictly comparable due to changing definitions.) The war effort still spurred intensive inflation pressure, contained only with wage and price controls. The U.S. is now close to full employment and its debts are far higher. Even in today’s world of low inflation and low interest rates, the scale of deficit spending the Green New Deal implies would likely push both higher.
Republicans and business groups have long fought even modest costs to mitigate climate change. Jacking up the price to finance left-wing Democratic priorities will only intensify their opposition. Indeed, Republicans and President Trump are itching to run against the Green New Deal. This guarantees inaction on climate unless Democrats win the White House, House of Representatives and 60 Senate seats.
What the U.S. needs is the Green New Deal’s sense of urgency combined with market mechanisms that incentivize carbon reduction at the lowest price, such as a carbon tax, carbon credits or tradable emission permits. This will also spur innovation that other countries can adopt to tackle their own emissions, which will be 88% of the global total by 2040.
Most climate models predicted warming above the mid-20th-century average of about 1 degree Celsius by 2016. They were right. Atmospheric scientists predicted increased frequency of extreme-heat events, and they were right, too. Scientists also predicted warming would be most apparent in East Asia and the Arctic, and it is.
These results aren’t surprising, given that they are based on many independent data sets. Measurements are collected by towers, buoys, aircraft, satellites and more, and are assessed by thousands of scientists world-wide.
.. It’s a sign of the reliability of this research that the insurance industry, with trillions in liability at stake, uses it to determine financial models. Most businesses can’t afford to have “political” opinions about climate change. For companies facing potential impacts from climate trends, to deny warming would be like Macy’s pretending online shopping isn’t disrupting retail.
.. Onetime climate skeptic Jerry Taylor, a former vice president of the Cato Institute, changed his views when he reread Mr. Hansen’s testimony and realized its predictions were “spot on.”.. Climate change is a byproduct of the prosperity created by the market economy, but the market similarly can be an engine to generate cost-effective solutions. Clean-energy technologies such as wind and solar power already have developed immensely in the past two decades. Public policy that puts a price on carbon emissions would speed the adoption of clean energy by exposing the market to the costs this pollution puts on society. This will accelerate adoption of and private investment in clean-energy technologies.
Though climate change presents American industries a daunting challenge, market-based policies can unleash innovation from investors, inventors and entrepreneurs, who will work to build a more prosperous and safer future. Working with accurate scientific facts and the right incentives, the market will find winning solutions.