The Political Economy of Saving the Planet – Bob Pollin part 1/2

Talia Baroncelli
Hi. You’re watching theAnalysis.news, and I’m Talia Baroncelli. I’ll shortly be joined by economist Bob Pollin, who will be speaking about the Green New Deal as well as the economic policies of Vice President, now Democratic presidential nominee Kamala Harris.

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I’m very happy to be joined by Bob Pollin. He is an economist as well as a professor at the University of Massachusetts Amherst. He’s the co-director of the Political Economy Research Institute, also known as PERI. He served as a consultant to the Department of Energy during the first Obama administration and also advised Bernie Sanders as well as progressive Democrat Pramila Jayapal on issues such as Medicare for All. He co-authored the book Climate Crisis and the Global Green New Deal with Noam Chomsky. It’s great to have you back.

Bob Pollin
Thanks for having me on.

Talia Baroncelli
Well, I wanted to speak to you about the Green New Deal and about Kamala Harris’s economic policies because she’s now the democratic presidential nominee. In a recent interview with Dana Bash from CNN, she said that she would not ban fracking. It seems like she’s flip-flopping on certain issues, and it’s really contradictory to reconcile support for a Green New Deal with not having a ban on fracking. I wanted to drill down on that particular aspect.

You wrote a paper called The Political Economy of Saving the Planet. In it, you say, and I quote, “The Global Green New Deal includes four major features. These are, one, phasing out global fossil fuel consumption by 2050; clean energy investments averaging about 2.5% of global GDP per year, including both public and private investments; just transition support for workers and communities that are currently dependent on the fossil fuel industry; phasing out deforestation and industrial agriculture to be replaced with afforestation and sustainable agricultural practices.” Why don’t we focus on the first three features? What do they entail?

Bob Pollin
Sure, and thank you for reading my article so carefully. So, to start off, this stuff is basic. It’s very, very simple. Yes, there are a lot of details that are complicated, but the basics are very simple. If you believe in climate science, that means we have to stop burning fossil fuels to produce energy because burning fossil fuels to produce energy is the primary cause of climate change. Climate change is kind of a euphemistic, gentle way of putting the fact that we are moving towards climatic disaster, and we are seeing the repercussions of that already. You see, in India last summer, you had average temperatures of 115 degrees Fahrenheit, and that’s going to become more persistent.

Climate change, climate crisis is real. It’s severe. The major cause is burning fossil fuels, oil, coal, and natural gas, to produce energy. Therefore, the primary way through which we fight climate change and try to stabilize the climate and prevent these oncoming disasters is to stop burning fossil fuels to produce energy. It’s that simple. That means all fossil fuels. That means oil, coal, and natural gas. There’s no ifs, ands, or buts about it.

Within that framework, of course, we can’t continue fracking because fracking is a technology. It’s just another technology to extract natural gas from underground. The specifics of the technology aren’t that important. The basic point is it entails horizontal drilling as opposed to going down vertical drilling. It extracts natural gas more cheaply, which sounds good, but on the other hand, it releases methane gas in the production process. The impact on overall climate change emissions is equivalent to burning coal. It’s very bad. On top of that, it has other negative toxic impacts on the environment, such as contaminating the water supply. It’s a terrible technology. It should be banned. All fossil fuel consumption should be banned.

Now, we know it’s not going to be banned in one year. The Global Green New Deal is a way to say, let’s make this happen over a 20-25 year period. You went down my list. Number one: stop burning fossil fuels to produce energy and generate a renewable and high efficiency-based energy system globally to substitute for our existing dependence on fossil fuels. Do so in a way that generates employment, jobs, good jobs, addresses the job losses for workers and the impact on communities such as western Pennsylvania, which is now benefiting economically from fracking.

Those are the main components, and you can generalize off of that. Yes, it applies to western Pennsylvania, it applies to Kenya, it applies to South Korea. Those are the simple elements. As you know, I myself and many, many other people have written and shown, on balance, this is going to be a very positive development. Yes, number one, in terms of eliminating emissions and stabilizing the climate, but also in terms of job creation and addressing inequality. That’s why I like the term Global Green New Deal, because it evokes the 1930s New Deal under Roosevelt, which addressed the economic crisis, the Great Depression, but it did so in a way that put a focus on making capitalism less exploitative and promoting more equality.

Talia Baroncelli
Your article was fascinating because it also addresses the International Energy Agency’s world outlook, in which they outline two different scenarios. In the first scenario, they address what’s called the Stated Policies Scenario, which examines all the different policies that are currently in place. What would happen by 2050? Would we be able to actually get to net zero if we stay on the same trajectory? The answer is no. In the second scenario, which the IEA calls the Announced Pledges Scenario, they examine all the different commitments put forward by world governments, which are trying to get us to net zero by 2050. In the second scenario, we still won’t get to net zero by 2050. What they call the difference between actually getting to net zero and these two different scenarios is an ambition gap. In your opinion, what do we need to do to achieve that mark?

Bob Pollin
The goal is to phase out fossil fuels entirely. You also mentioned the issues around deforestation, corporate agriculture, and high emissions agriculture, but we’ll put those aside for now and we’ll just focus on how we have to stop burning fossil fuels. We can say, let’s stop burning fossil fuels. And then what? We can’t turn on the lights. We can’t drive our cars. So, obviously, we need an alternative energy infrastructure. So concurrently with stopping the burning fossil fuels, we’ve got to build out the renewable energy infrastructure.

What are the policies that can make that happen? So it’s got to be a combination. The big thing that’s passed in the United States, the so-called Inflation Reduction Act, which at least a third of it was about addressing climate issues, but it basically was subsidizing the clean energy economy, subsidizing the development of renewable energy i.e. wind, solar, geothermal, some hydro, and also investing in promoting high efficiency, including, by high efficiency, I include public transportation, because by efficiency, it means getting from point a to point b without burning so much energy. You can get a lot more people if they’re in a bus or a subway than if they’re in a private car.

How do we do that? One set of policies is the ones in the Inflation Reduction Act and so forth, which subsidize green energy. The other set would be, okay, what are the things that we need to do concurrently to phase out fossil fuels? One thing is to say we phase out fossil fuels. You could say stop burning tomorrow 100%. We know that’s not realistic. You could either think about what are called carbon caps, which say every year, let’s say, utilities have to cut back their fossil fuel consumption by 5-7%, and they have to do it. If they don’t do it, they are criminally liable. They go to jail. The CEO goes to jail. I like that one.

Talia Baroncelli
Although it’s highly unlikely given that not even a handful of people went to jail during the housing crisis and the subprime mortgage scandal that brought the entire economy down, the global economy down.

Bob Pollin
That’s true.

Talia Baroncelli
Do you think that would really happen?

Bob Pollin
No, of course, it won’t. That’s why the thing that did pass, it’s all carrots and no sticks as they say. Yes, we will give money for renewables, and it’s not as much as I would have liked, but depending on how you cut it, it could be very substantial because it really incentivizes private capitalists to invest. That’s the main thing that’s there.

What about the fossil fuels? Okay, so if we’re not going to have a 100% cap or you go to jail, you can try to gauge how far you can take it politically. The other alternative to a carbon cap is a carbon tax. So yes, you can keep consuming fossil fuels, but it’s going to cost you, and it’s much cheaper to transition to green energy. That’s not as strong a policy as a carbon cap, but politically, it may be easier to implement. So that’s really the basics.

The other part of it is every time we talk about anything to promote green energy and phase out fossil fuels; we have to worry about the communities and the workers that are dependent. These are industries that are huge for people’s lives. It’s not just rich capitalists and shareholders, though it is that of course, but it is also the workers. The jobs in coal mining and oil refining, they’re good jobs. People make $100,000 a year or more on average, whereas the average job in clean energy, at least in the U.S. now, is like a third less $65,000, roughly $65,000-$70,000. The reason the fossil fuel jobs are good jobs is because, for generations, people organized labor unions and made them good jobs. We have to have a transition program to move people out of those jobs into jobs in green energy or anything else. Their living standards need to be protected. The communities that are dependent on the fossil fuel industry are actually not that many, but they’re there, and they should get a disproportionate share of the green energy investments to compensate.

Talia Baroncelli
Well, I guess a question about that would be why isn’t Harris leaning into this just transition, at least publicly, when she’s speaking. Instead of trying to appeal to Pennsylvania voters who might have these fracking jobs, why didn’t she just say, I’ll pay for this just transition? I’ll pay for people to transition from those jobs to jobs that involve clean energy. Wouldn’t that be better than saying she won’t ban fracking?

Bob Pollin
I can’t tell you politically. In terms of the substance, of course, it’s better. I wrote a study commissioned by different progressive groups in Pennsylvania. It came out in 2021. Right now, there are about 17,000 fracking jobs in all of Pennsylvania. The green transition program that we designed would generate about 160,000 jobs. Now, those 17,000 jobs, and if we talk about phasing them out over 20 years, we’re looking at maybe 700 people a year that would get laid off. It’s not very hard to find new jobs for 700 people. It works. It’s true. But to say it politically, you know, I’m not a politician, and I’m not a political advisor to someone running for president. It’s all true.

I did a similar study for West Virginia, which is even more dependent on coal and oil. We got the miners union to say, yeah, okay, if this is the transition program, we’re okay with it. I did one in California, the union representing oil refinery workers they endorsed it. They said, yeah, if this is a transition program, we’re for it. So, yeah, we should get politically– obviously, Harris isn’t helping right now on this, but politically, we have to kind of get that idea into people’s heads.

Talia Baroncelli
I do want to return to your article. There’s another part I wanted to quote because you’re speaking about how, in your opinion, it is possible to actually rely on green energy sources in order to get to the net zero reduction that we need by 2050. You wrote, “It is entirely realistic to assume that a global clean energy infrastructure can supply close to 100% of global energy supply by 2050. By my higher estimate, it will require an average level of investment spending throughout the global economy of about 2.5% of global GDP per year, focused on two areas. One, dramatically improving energy efficiency standards in the stock of buildings, automobiles and public transportation systems, and industrial production processes, and two, equally dramatically expanding the supply of clean, renewable energy sources, primarily solar and wind.” Do you see this actually happening globally?

Bob Pollin
Yeah, I do. It’s happening. I would like to see it happening more quickly, and I would like to see the phase-out of fossil fuels happening faster concurrent with this. But, yeah, the levels of investment, they’re not to the point where this path that I’ve laid out is, but it’s not nothing. We’re seeing investments in solar and wind efficiency. I haven’t looked at the data in the last few weeks, maybe, but it’s over a trillion dollars a year for today’s global economy. Where we need to be would be maybe 2.5 trillion, and then average between now and 2050, about 4 trillion. I can tell you how I calculated it. It would be really boring for most people. But other studies that come at it from totally different vantage points are not that far off from what I got, and I know how I got my numbers, so I think they’re pretty reliable.

Look, if we continue to subsidize this, and it has to be subsidized in the developing world, and that’s one of the big issues now that high-income countries pledged $100 billion a year, nowhere close to getting $100 billion a year into the developing economies; $100 billion a year is actually peanuts relative to what’s needed. So that needs to be ramped up maybe seven or eightfold.
There have been successes, and the only reason there have been successes is because climate activists have made connections with people, working class movements as well. These successes have only been partial. People like yourself and people in the media have been pounding on this. So that’s been good, and we need to keep it up.

One of the things that I’m finding discouraging in not only Harris, but more generally, the whole climate issue seems to have faded as a central focus of activism. I don’t live in Europe, but it seems like that’s the case also in Europe. Just looking at, for example, the returns on the elections, where the green parties are, for example. Maybe I’m wrong.

Talia Baroncelli
Well, I think there are a lot of misconceptions as well. That was actually my next question. You’re assuming that these green energy sources are actually efficient and sustainable, like clean energy sources such as solar and wind. In certain countries, don’t some of these technologies also need other fossil fuels to make up for the times when they’re not producing enough energy? Is this really an issue of the technology not being developed or sophisticated enough and just needing to be scaled up, or are these technologies really actually capable of supplanting fossil fuels completely?

Bob Pollin
Yeah, no, I think they are, especially in developing economies. I’ve done work in Sub-Saharan Africa and I don’t know what the exact number is, but if you look at the rural regions, 25, 30, 40% don’t even have access to electricity at all. Any kind of access. Their capacity to build smaller-scale units that generate solar or wind power far surpasses any capacity to build out huge utilities that are going to burn fossil fuels. So these would be massively beneficial. Yeah, the capacity to rely entirely, yes, of course, we know that solar and wind are intermittent, meaning the sun doesn’t shine all day, and the wind doesn’t blow everywhere all the time. Those are relatively easy things to resolve through storage and through transmission lines.

The other issue that progressive people rightly have been critical of is the need for mining, the resources that, for example, batteries for electric vehicles are heavily dependent on lithium and cobalt, and they are extracted from developing countries under exploitative conditions and bad environmental conditions. We need to work on those things. Those things need to be greatly improved. The point being that we will get energy without generating CO2 emissions. If we can solve those other questions, we still have a path to climate stabilization.

Talia Baroncelli
What about countries like India and China? China, for example, is the largest emitter, and that’s partially because of Western countries setting up their companies in China. There’s been an export, in a way, of Western emissions to China. We can’t completely fault China for that. I’m sure we can fault them for other things, but we need to understand how these emissions are distributed globally. China is still the largest emitter, and India is also a large emitter. Based on analysis from 2021 and 2022, 72% of their total generation of energy was from coal. Are they making the right investments? Are they actually transitioning to green sources of energy? Or are they just relying on fossil fuels?

Bob Pollin
China, for many, many reasons, including this is an extremely interesting case. China is, yes, on the one hand, by far as a country, the largest source of emissions, not per capita. I mean, per person. But for one thing, they have 1.4 billion people and it is a growing economy. It’s not surprising that the level of emissions in China is about twice that of the U.S., and the U.S. is second. China is also by far the leading developer of renewable energy. It’s totally the achievement, a huge achievement of Chinese technology, that the per unit cost of solar, of generating a kilowatt of electricity from solar, has come down by over 90% in the last 15 years. Unbelievable. You know, from something like $0.37 per kilowatt of electricity on average to $0.03 or $0.04, that’s due to China. China’s doing both things. They are developing renewables massively. They are building electric vehicles that are affordable. They’re not Teslas, they’re affordable small electric vehicles. They have managed to dominate the global supply chain for these critical minerals, i.e., cobalt, lithium, and nickel. China is, they don’t have a total lock, but they are running it and that’s due to their foresight 30 years ago to say, okay, we’re not a leader in fossil fuels technology, but here’s where we can become a leader.

China has both things happening. For China to transition off of fossil fuels is going to be hugely beneficial in that they are also at the cutting edge of renewables. Now, India is a different case because they haven’t been developing and innovating, but the same cost calculations apply to India, China, and every place else. If renewable energy comes in at $0.03 or $0.04 a kilowatt and coal is at $0.07, well, it’s just a matter of time before we can build out the green energy technology. Of course, there has to be money, and there has to be financing. There are always a lot of details that need to be worked out, but these are the things that, if you say, and I’ve been in these discussions at times. I was in Sub-Saharan Africa, and they said, well, you want us to just stay poor. You don’t want us to burn fossil fuels, therefore you want us to stay poor. My argument, my counter argument is actually building out a renewable energy infrastructure is going to be cheaper. It’s going to enable you to get out of poverty faster.

Talia Baroncelli
It requires initial investment, though, right? It’s not just going to happen.

Bob Pollin
It does. Of course, it’s not going to happen tomorrow. We have to be able to think through this transition whereby, okay, you’re going to burn coal, but you’re going to cut it back to some realistic number, i.e., 5%, 6%, 7%. Concurrently, we’re going to build out the renewable capacity to make up the difference. That’s the basics. Again, it’s very simple in principle and practice, of course, there’s a lot of interest. People are making a ton of money off of selling these fossil fuels that are destroying the planet.

Talia Baroncelli
Thanks for watching part one of my discussion with Bob Pollin. Join us for part two where we’ll be discussing the economy as well as inflation. See you next time.