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Public Finance for a Green New Deal: Why We Need to Change the Rules

A Green New Deal must involve far more active and interventionist public finance and fiscal policy.
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Report

Public Finance for a Green New Deal: Why We Need to Change the Rules

A Green New Deal must involve far more active and interventionist public finance and fiscal policy.

Executive Summary

The physics of climate science are clear. The global economy must be re-embedded within sustainable limits – consciously and deliberately – within little more than a decade. If not, we face irreversible shifts in weather, temperature and average sea levels that could ultimately prove fundamentally incompatible with a future in which all human societies can flourish.

Perhaps for the first time in the UK, recognition of the sheer scale of change required has begun to go mainstream. In May 2019, the UK government’s official advisors on emissions policy, the Committee on Climate Change (CCC), called on government to achieve ‘net-zero’ emissions by 2050. The CCC acknowledge upfront this would require transformation in every resource and energy intensive sector of the economy, from power generation to heat, construction, manufacturing industry and agriculture. But perhaps even more significant was the CCC’s recognition that this could no longer be done sequentially, sector-by-sector. In their view, the only remaining option for the UK is simultaneous, economy-wide transformation requiring the largest peacetime mobilisation of resources in the country’s history.

Climate change is very far from the only socio-environmental problem that we face. But it is perhaps the most urgent. It is now clear that a Green New Deal is needed to reorient economies towards the required investment, employment and redistribution of resources and opportunities that are essential to avoid its worst impacts.

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Public Finance for a Green New Deal: Why We Need to Change the Rules
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