A Green Stimulus Plan for a Post-Coronavirus Economy

A Green Stimulus Plan for a Post-Coronavirus Economy

A group of U.S. economists, academics and policymakers say the Covid-19 pandemic is an opportunity to fix the economy — and the planet — for the long term.

Brentin Mock
Publication Year: 2020

Reposted from CityLab

If we’re going to recover from the coronavirus pandemic, then let’s do it in a way that shakes up the status quo. This is the message that a group of U.S. economists, professors, and veterans of the last financial crisis sent in a letter to Congress yesterday asking for “green stimulus” legislation to jump-start the economy in a way that controls for climate change and poverty.

They are asking for a $2 trillion commitment for programs that will create living-wage jobs, amped-up public health and housing sectors, and a pivot away from a fossil-fuels-based energy frame. Under their plan, the stimulus would automatically renew every year at 4 percent of GDP, or $850 billion annually, as well as give the public more of a voice in whether — and how — large-scale corporations would get bailouts.For now, the coalition recognizes that the focus should be on stopping the spread of coronavirus and mitigating all related health risks.

“However, we can do all the preparatory work now to make green projects are ‘shovel ready,’” the group said in its open letter published on Medium.com. Legislative action and planning work now “can ensure that physical projects can commence as soon as it is feasible to restart major in-person work across the economy.”

Congress is already deep in the throes of constructing a large economic recovery bill, to help workers losing income and businesses and governments losing revenue due to the novel coronavirus crisis. But the U.S. Senate is stuck in a debate between Republicans who want to dedicate a quarter of its $1.8 trillion stimulus plan to bailing out corporations, and Democrats who want to ensure strict transparency and oversight over how that $500 billion corporate bailout would be registered.

Congressional Democrats are also making their own demands, like making airlines that receive federal funding assistance agree to reduce carbon emissions by 50 percent, and making corporations pay a $15 minimum wage to its workers. The Green Stimulus asks Congress to push for even more to guarantee that workers are protected and businesses can operate sustainably to ward off climate change catastrophes, especially in a coronavirus-crippled economy. The authors of the proposal are focused more on the long-term recovery — similar to the 2009 American Recovery and Reinvestment Act stimulus passed by the Obama administration that followed the 2008 Emergency Economic Stabilization Act bailout of the Bush administration.

In fact, many of the authors of the Green Stimulus letter either worked on the 2009 ARRA legislation or are now working on Green New Deal legislative proposals, and in some cases both. And yes, much of the Green Stimulus package mirrors the Green New Deal. The Green Stimulus architects are operating under guidelines set by a coalition of climate and environmental justice organizations called the “Five Principles for Just Covid-19 Relief and Stimulus:” prioritize public health; provide direct economic relief to families; relieve workers rather than corporate executives; protect elections and democratic processes; and, make a “down payment on a regenerative economy.” The last principle is what the Green Stimulus seeks to represent.

“As policymakers take steps to ensure immediate relief and long-term recovery, it is imperative that they consider the interrelated crises of wealth inequality, racism, and ecological decline, which were in place long before Covid-19, and now risk being intensified,” according to the principles.

CityLab spoke with J. Mijin Cha, an author of the Green Stimulus, senior fellow at Data for Progress, and assistant professor of urban and environmental policy at Occidental College. Much of her scholarship has been on the transition to a low-carbon economy, and how to fairly prepare fossil fuel workers and the unemployed for jobs in renewable energy. The interview has been edited for length and clarity.

Why is a focus on a just transition for workers — from fossil fuel industries to renewable energy industries — an important thing to talk about in the middle of a coronavirus pandemic?

There is an overlap between communities that are struggling with coronavirus that don’t have the resources to adequately fight it, and these rural regions that are fossil fuel communities. As we think about the stimulus, this is definitely an area of workers that should be covered. Because we can’t end fossil fuel extraction tomorrow. It will take us 10 years or so to be able to really plan for economic diversification and implement it so that these communities don’t go from having a tax base that is tied to coal mining to nothing. So, if we’re going to infuse, support and invest in projects that will put people to work, working towards transitioning fossil fuel communities away from extraction is something that we have to do now anyway.

From a health perspective, is there something about renewable energy jobs that make workers safer in times like this, meaning disease outbreaks, than jobs in the fossil fuel industry?

The health impacts from these extractive industries would make people more susceptible to something like the coronavirus, because they’re already not in good health. The second thing is, I’ve seen reports of, coal miners for instance, and oil and gas drillers, whose jobs are considered to be essential. They’re not able to stay at home. So, they’re still constantly being exposed to the virus. They are bearing the brunt of our extractive economy, and then in times like now when there’s a pandemic, they are still right at the forefront.

Part of the Green Stimulus asks for ramped-up resources and financing for electric vehicle manufacturing. Are there any caveats for that? For example, should Elon Musk expect a huge payout?

Absolutely not. And we’ve put in points about prioritizing companies and projects that already have project labor agreements — at the minimum, they have to pay prevailing wage. This is something that’s really important as we think about job creation. Creating a bunch of bad jobs will just perpetuate both inequality and the climate crisis. Now is a time when we think about not just what we invest in but who we invest in. Businesses and manufacturers that pay and treat their workers with dignity are the ones that we want to be lifting up and investing in.

There are also several provisions that focus on investing in women in the recovery. Why is that important?

You can see that in terms of the occupations that are being hit, like health care and education, a lot of these are workforces that are majority women. We can say that women will bear the brunt of the negative economic consequences of the coronavirus. This emphasis on women is a way to acknowledge that historically women have been left out of things like manufacturing and tech. We’re focusing specifically on low-income communities, communities of color, indigenous communities, and other frontline communities that have been historically excluded from both the extractive economy and the current neoliberal economy that we have now.

Many of the people working on the Green Stimulus proposal also worked on ARRA. What lessons are being taken into account?

First, ARRA was too small to address the magnitude of the crisis, which is why we’re calling for at least $2 trillion. I think ARRA showed how antiquated a lot of the programmatic infrastructure is. For instance, they tried to ramp up the weatherization program, but it could not handle that infusion of cash, just in terms of their basic infrastructure. That’s why a lot of our policies are really on the public sector, where we can stretch and advance a lot of these things, like renewable energy projects at utility scale, mass retrofitting of public housing. These are all things that we can do.

Another issue with ARRA is that it focused on training workers for green new jobs, but didn’t focus as much on the demand side. So for us, what are the policies that we’re implementing that will not only create jobs, but also create demand for jobs? Like when we think about public procurement, that’s a lever that we can use to really ramp up manufacturing on the demand side, and that creates jobs.

Critics are already arguing that ideas like the Green Stimulus or even the House Democrats’ recovery bill are just exploiting coronavirus to get Green New Deal policies passed. How do you respond to that?

I understand where people are coming from, but I think what we need to realize is that what we’re having now is a total corporate stimulus. Are they also saying that Republicans are using this opportunity to really ramp up the corporate sector? I know people will ask: How do we make this politically feasible? But I think the focus should be more on what is the right thing to do. One thing that has come out from the coronavirus pandemic is how unjust our country really is. Like all the people that don’t have access to paid sick days, that don’t have access to health care, and understanding how deep our inequality really runs. This is something that has come to the surface, and this is an opportunity for us to address that.