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CEO Insights: What's the deal with the Green New Deal?

By Andrew Petersen

CEO | BCSD Australia

Compared to the rest of the world, the United States has been uniquely slow to recognise and address the threat of climate change. This week US Democratic Party tabled the Green New Deal (GND) in US Congress — which calls for a mammoth expansion of federal investments and market interventions.

What is the Green New Deal?

  • "Meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources," while cutting emissions from transportation as much as technologically possible.

  • "Upgrading all existing buildings in the US and building new buildings to achieve maximum energy efficiency..."

  • "Guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States."

An early legislative draft of the GND stops short of banning fossil fuels. If legislators get the details right, and a climate-related economic program could do a lot of good, writes Bloomberg Opinion's Editorial Board.

But regardless of whether it comes to fruition, it seems poised to finally force a conversation in the US Federal political arena that other governments (including Australia) and the private sector have been holding for a long time. What's significant is that the GND calls for a World War II-level mobilisation to put the US on an aggressive pathway toward reducing greenhouse gas emissions to net zero, while also providing universal health care and a jobs guarantee (among other goals).

Between the lines: Corporations from Walmart to Toyota are already investing in restructuring their businesses toward GHG reductions and a longer-term sustainable energy model. Similarly, major energy-consuming and energy-producing governments such as Germany, China, and, yes, even Saudi Arabia, are pursuing their own versions of risk management and economic transformation in anticipation of rapid decarbonisation. But none of these government or corporate efforts are as transformational as the GND, and as a result are unlikely to deliver greenhouse gas reductions at a level consistent with the Paris Agreement or similar targets.

Why Australia should take notice: The plan is designed to deliver a major shot in the arm for US green industries, sparking a rapid expansion of low-carbon economic activity from smart technology firms, green energy developers, and electric vehicle manufacturers, to name just a few. No one (country, corporation, community) is an island these days on the issue of energy transformation and this new momentum in the US will permeate across the world, just as the China-US trade war is now talked about impacting on Australia's GDP expectations for the immediate future.

All BCSD Australia members receive ongoing analysis of these and other topical sustainability issues through our weekly e-newsletter THE INSIDER.


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