By mid-2000 most of the 15 EU Member States were ruled by coalitions made up of a number of progressive parties, including Green Parties. At the time even the European Commission was made up of a number of progressives, including Michaele Schreyer, the former budget Commissioner and die Grünen politician.
Many circumstances have since then changed, the balance of power has now shifted towards the conservative side of the political spectrum, the global economy is in its worst recession since the second world war.
Drawing on the experience of its member parties in local, regional and national governments and also on the research carried out by some of the leading institutes in the area of sustainability, for example the Wuppertal Institute in Germany, the European Green Party (of which Alternattiva Demokratika is a founding member) has come up with the proposal, or rather with a set of proposals, which it has called The Green New Deal.
The Green New Deal is our response to the triple ecological, social and economic crisis that our societies are confronted with. It combines a set of ambitious and binding targets, incentives and public investments into green technologies and services in order to create 5 million jobs across the EU – jobs which are much needed in times of economic slowdown.
The Green New Deal relies for funding on a mixture of public and private spending financed by borrowing. Such borrowing is essential during a depression, when the government must intervene as the corporate sector shrinks. This government intervention generates employment, income and saving, and associated tax revenues repay the exchequer. This is the multiplier process, attributed to Richard Kahn, Keynes’s closest follower.
Public spending should be targeted so that domestic companies benefit, and then the wages generated create further spending on consumer goods and services. So combined heat-and-power initiatives generate income for construction and technological companies, and then workers’ salaries are spent on food, clothes, home entertainment, the theatre and so on, creating demand for those industries.
The mathematics of the process are such that the public investment should create an exactly increased amount of new saving, rather than being a draw on existing saving. Equally the higher level of saving as a result of public works will create demand for new savings instruments. This can be met with innovative government instruments, such as green savings bonds.
The same argument demonstrates that there is nothing wrong with reliance on public expenditure for a good part of national economic activity. The extent of that activity should be a matter for political and democratic choice, for it merely directs real resources into certain uses, while private impetus may direct resources elsewhere. The issue is surely complementarity of purpose and full utilisation of resource.
A number of reports, such as the Wuppertal Institute Report and the McKinsey Report have concluded that greening the economy has a grand employment potential in various sectors of the economy, ranging from low-skilled labour (in waste management and manufacturing for example) to high-skilled jobs (research and development in renewable sources of energy for example).
The United Nations Environment Programme (UNEP) has identified other areas having job creation potential. These include Transport (especially the building of more fuel efficient vehicles or fuel cell vehicles), energy efficient buildings (especially retro-fitting of insulation or in the construction of passive solar houses), materials management (recycling – including schemes such as green dot) and agriculture (organic farming).
Some of our detractors have implied that job creation through investment in eco-industries is a pipe dream. Let me quote some figures in order to prove these people wrong. Following the Energy Efficiency in Building Law enacted in Germany by the red-green coalition, 250,000 additional full time jobs were created in 2008 due to the massive retrofitting programme carried out throughout Germany. This brought the total number of people employed in the ecological sector to 1.8 million (BMU and Umweltbudesamt, 2009). Thanks to the policies employed by the red-green coalition from 1998 to 2005, there are now 1.8 million jobs in the ecological sector; this represents 4.5% of the gainfully occupied in Germany.
A WWF study in 2008 has found that with a 30% reduction of CO2 emissions by 2020 an additional 684,000 new jobs will be created in France.
The European Commission estimates that policies aimed at reducing energy consumption in the manufacturing sector by 10% will create approximately 137,000 new jobs across the EU and policies aimed at increasing the percentage market share of renewable energy sources by a further 10% will result in the creation of 58,000 new jobs across the EU. The European Commission’s study also concludes that a further 149,000 new jobs will be created with the investment of an additional e7 billion per year in Structural Funds for environmental infrastructure.
The Green New Deal takes the Lisbon Agenda a step further, from countering job losses to the Far East due to globalisation through the creation of a knowledge based economy to the creation of wealth without putting our future in jeopardy.
Even the Maltese people can take part in the Green New Deal: by voting Green on 6 June, we will be contributing to creating new Green jobs in Malta. So just go for it. this time: “Yes we can”!
arnoldcassola@gmail.com
www.alternattiva.org.mt
www.arnoldcassola.wordpress.com
Arnold Cassola is Chairperson of Alternattiva Demokratika – The Green Party and candidate for the European elections
