Green new deal or planned economy?

In September, delegates to Labour Party conference adopted what was been widely hailed as the most radical environmental policy of any major political party in the world.

But when it comes to the Clause V committee hashing out the party’s election manifesto behind closed doors, there is no guarantee that the conference motion’s most radical elements, like the 2030 target date for net zero carbon emissions, will make it into the manifesto.

Activists with Labour for a Green New Deal, the campaign group responsible for the conference motion, have already admitted as much by conceding a watered-down wording which instructs Labour to “work towards a path to net zero carbon emissions by 2030”. A leading GND campaigner recently wrote in LabourList: “Net zero emissions by 2030 is an incredibly ambitious target – perhaps even an impossibly ambitious one, and it remains to be seen how the frontbench will choose to interpret it.”

Yet the 2030 target is not arbitrary, but essential, according to UN scientists who have warned we have less than 12 years to keep global warming to a maximum of 1.5C or face untold damage to human civilisation. So why are even the Green New Deal’s most enthusiastic proponents so pessimistic about achieving the radical change necessary? The answer is simple – the scale of the economic reorganisation that would be necessary to avert climate catastrophe is impossible under a system of production for profit, to which the Green New Deal and Labour itself are completely beholden.

A new deal for whom?

Like its historical predecessor – FDR’s New Deal for an American economy ravaged by the Great Depression – the Green New Deal is a deal between capital and labour. The policy of mass state investment is designed to boost consumer demand and give capitalists new routes towards profit in a time of crisis, achieving the two-pronged goal of setting the economy on a path to recovery while preventing civil unrest and mass radicalisation amongst workers. It hands some important gains to the working class in the process, but the very nature of capitalist political economy ensures these gains can never be guaranteed, and are always ripe for reversal at the next change of government or economic cycle.

The GND commits Labour to ‘public ownership of energy’ and ‘public ownership of the big six [energy suppliers]’. This is a step forward from Labour’s previous policy, which had Labour endorsing public ownership of the electricity networks, but would have left energy distribution in private hands. Yet while a Labour-commissioned report setting out a roadmap to 2030 concedes that significant government subsidies will be necessary to incentivise wind and solar power generation, Labour would leave private industry free to continue fossil fuel extraction and nuclear power generation so long as it is profitable.

The GND also talks of nationalising the transport industry and mass investment into free or affordable public transport. But Labour has been clear that its approach to rail nationalisation would buy back all private assets at market price, financed by state borrowing – a huge transfer of wealth from taxpayers to profiteers. In order not to offend business interests, Labour would allow existing rail franchises to expire before initiating these buy-backs. Since many rail franchises last for ten years, and the process would inevitably be subject to protracted legal proceedings and appeals, this would mean the 2030 deadline was missed before Labour could even start to implement its plans, if it wasn’t voted out of office first. Presumably, a similar process would apply to the nationalisation of energy.

The emphasis on technological solutions leading to increased use of renewable energies, including electric cars, offers an uncritical endorsement of industries which come with their own damaging environmental effects. For example, construction of wind and solar farms requires rare earth metals and non-renewable material inputs that are energy-intensive to produce. The car industry offsets lower profits in electric car production with luxury models sold to less energy-conscious consumers or cheaper to produce petrol-powered models in other parts of the world.

Most importantly, Labour’s approach treats each privately-owned industry – solar, wind, cars, buses, energy generation – as discrete puzzle pieces which, if boosted by enough state cash, will fit together and allow the picture of a green economy to emerge. But as socialist environmentalist Gabriel Levy has written: “Modern electricity technologies – renewables, plus networks that distribute flows – can only realise their decarbonisation potential as part of integrated systems. The electricity sources need to be coordinated not only with each other, but with gas, heat and transport systems. If bits of these are owned by private companies, profits will be put before climate and social justice imperatives.”

Ownership

This brings us to the crucial question of ownership. Labour’s plans show that its logic prioritises respect for private capital; it sees businesses as “partners” in the green transition. Even if Labour delivers the vast sums of state investment it has promised – a questionable prospect given Labour’s current revenue-raising proposals – it has already conceded that significant parts of ‘green’ industry would remain under private ownership.

The Green New Deal is in effect a taxpayer subsidy on a vast scale to incentivise the greening of profit-driven companies and financiers, many of which have been some of the biggest drivers of environmental destruction. Aside from the fundamental injustice of such a transfer of wealth, the short time we have to implement a grandiose worldwide transition away from fossil fuels, along with the imperative to unite all aspects of energy generation, distribution, and use into an integrated system, render any market-oriented solution woefully inadequate.

What we really need is mass nationalisations of every part of the economy, followed by their integration and subordination to democratic planning and production for human need and environmental sustainability. Public ownership of the banks and finance are essential, to allow for the re-investment of profits according to socially determined priorities across the entire economy. Without it, even those key industries that Labour plans to nationalise would be run on a corporate infrastructure, hamstrung by constant competition from a private sector bent on reclaiming its market share. What’s more, if investment decisions are left in corporate hands, the shift to renewables will never happen on any timescale relevant to tackling climate change.

A programme of nationalisation on the necessary scale is impossible if Labour insists on respecting the sanctity of private property by paying “fair” (i.e. market-determined) compensation to the former owners. It is simply not possible to raise such huge sums with existing rates of taxation or to borrow enough on the money markets to buy back all the necessary assets. Even if Labour were willing to impose significantly more radical taxation and borrowing plans, this would certainly trigger capital flight on a massive scale or plunge the UK into a sovereign debt crisis. Clearly the threat of expropriation would have a similar effect. But in either case Labour would have to meet and defeat this sabotage by imposing strict exchange and capital controls, and the trade unions would have to enforce them by imposing workers’ control and inspection of the books of the companies involved. 

Democratic control

Labour has placed much emphasis on the importance of a “just transition” to green industry, meaning that a mass shift in jobs from high-polluting to green industry must come alongside protections for workers displaced from their jobs. GND campaigners at party conference were swift to make accommodations to trade union demands, particularly those which organise manufacturing, construction, and energy workers, and are cooler on environmental radicalism.

The tension between narrowly defined trade union interests – preserving existing jobs and improving terms and conditions – and environmental politics are not new. As campaigners have rightly recognised, broad working class support, including from those who currently work in high-carbon industries, will be essential to the green transition. But the contradictions won’t be resolved by brushing them under the rug, as Labour has done with the issue of airport expansion. The movement needs to openly acknowledge that some industries will have to disappear, and fast.

While state support for re-training schemes can go some way, this will never be able to fully counter the anarchic market forces which will, at least temporarily, displace workers and force them into lower-paid work. Workers need to be able to fight for their own interests. But though the GND policy includes a commitment to repealing all anti-union laws, Labour continues to mention only a limited commitment to repealing the 2015 Trade Union Act.

Genuine workplace democracy can go much further, offering a lasting integration between long-term social interests and immediate protections for workers. Real workplace democracy would mean workers democratically set the objectives for their branch of industry. At a regional and national level, strategic decisions about workforce development and labour allocation could be made across the entire economy, guaranteeing everyone a socially useful and productive role. This will need to apply internationally too, wherever workers challenge and take over production, the foundations can be laid for a global plan to halt, indeed reverse, the harmful effects of climate change.

Environmental imperialism

The struggle against climate change cannot be fought on a terrain of national policy with every country responsible for itself. The UK produces only 1% of global CO2 emissions, compared to China’s 29% and USA’s 14%. UK carbon emissions have been on a downward trend since the 1990s. Based on national metrics, it would be easy to assume that the Green New Deal is merely accelerating the current trend, with success all but assured if only Labour acts decisively enough. But when UN scientists warn we have 11 years to save the planet, their assessment is global.

Focusing on UK emissions obscures the role of British capital in the global value chain, and therefore its true responsibilities in the climate struggle. The world’s highest-polluting companies are those involved in fossil fuel extraction, in which British shareholders have huge stakes. The largest proportion of energy produced by these companies is consumed by a second tier of high-polluting producers in industries like farming, car production, plastics, and other carbon-intensive consumer goods. The vast majority of these companies are owned by Western capital.

These companies externalise the most dangerous and high-polluting processes to the global south, and then import the finished goods back into their own economies to sell them and appropriate the profits. Meanwhile, waste from Western production processes follows the opposite trajectory of displacement from the richest to the poorest countries. Yet the role of British business interests in all of these processes is not accounted for in national emissions measures or targets.

Western imperialism is directly responsible for an exploitative global system of production which has pillaged the economies of Asia, Africa, Latin and South America. Two centuries of environmental depletion, coupled with its enforcement by the IMF and other global institutions of economic imperialism has relegated these semi-colonial economies to an inescapable dependence on their imperialist masters. As a result, the poorest people in the world suffer from the most polluted environments and severe depletion of ecological resources. Natural disasters are occurring at an accelerating rate in the global south, yet the same countries’ enforced poverty leaves them the most ill equipped to deal with the resulting damage.

Labour’s Green New Deal has acknowledged some of these dynamics, but posits only voluntaristic solutions invoking the “promotion of international exchange of technology… and resources to help other countries achieve a Green New Deal”. There is no way to hold a national government accountable for such a general aspiration. More importantly, given Labour’s commitment to market-based Keynesian solutions at home, it surely wouldn’t be prepared to back the smashing of all institutions of global imperialism, which would be necessary to unshackle the economies of the global south.

Political leaders in the global south, reasonably enough, argue that it shows grotesque double standards for those states which created the problem of climate change to now demand that they forego the industrialisation that will enable their population to raise their living standards to those of the ‘global north’. And true enough anything that is not a real “new deal” for the workers and farmers of the ‘south’ too will fail completely to meet its objectives. It needs to build into its objectives the ending of chronic poverty as well as avoiding the devastation which will otherwise afflict these countries.

The vast human and material productive forces, presently accumulated in North America, Europe and China must be deployed to undertake the green development of the countries in Asia, Africa, Latin America that have missed out on it, whilst avoiding the pollution that went with the industrial revolutions of the nineteenth an twentieth centuries.    

Conclusion

The Green New Deal is an illusion – a national programme for a problem that can only be solved internationally. It’s true that we have the technological capacity to reverse climate change, but capital accumulation occurs in a cycle which externalises environmental cost. As long as we accept its existence in a profit-driven system, the transformative potential of green technology will coexist with continued environmental destruction.

Given the scale of the challenge and the rapid timescale needed for implementation, only an internationally planned economy can save us. And only revolutionary movements coming to power in successive countries in the service of the worldwide revolution can make the incursions onto capital to achieve it.

In contrast to the moralistic pleading of Extinction Rebellion, the nationalist utopianism of the Green New Deal, or the hypocritical greenwashing of business elites, socialist economic planning is the only concrete road to arresting the development of the climate crisis before it’s too late. In the face of fast-approaching social collapse, it is the task of socialists to organise the revolutionary transition to an economy based on production that satisfies the twin demands of human need and environmental sustainability.