By Shriya Chitale
Climate change continues to be a contentious topic in the United States. Though politicians grapple with the best way to combat ongoing environmental issues, there is yet to be a comprehensive solution. Many prominent figures have gone so far as to suggest that there is no such thing as “climate change,” or that climate change was a concept manufactured by scientists to instill their agenda. Such claims have consistently been disproven by science. Despite ongoing debate, one thing remains clear — climate change is affecting the United States, and is no longer a distant and intangible problem to deal with. With the election of Joe Biden, climate change has moved to the forefront of the economic and political agenda. Analyzing Joe Biden’s plan and comparing it to the Green New Deal can provide us insight into the potential economic ramifications of comprehensive federal legislation regarding the environment.
In stark contrast to President Trump’s plan, which accounts for no restrictions on fracking and encourages fossil-fuel consumption, President-elect Biden’s plan concedes that humans are, in part, responsible for current environmental conditions and concentrates on resolving the issue. Biden’s plan calls for the United States to hit net-zero emissions by 2050, invest in more environmentally-conscious infrastructure, recommit to the Paris Climate Accord, and hold corporations accountable for their role in this crisis. At first glance, this plan seems ambitious — which it is, considering that Biden’s environmental plan is the most radical one to have been proposed by a President-elect. Biden plans to fund the plan by investing $1.7 trillion dollars over the next ten years. Yet, Biden’s primary way of raising funds is not through raising taxes; in doing so, Biden is sending subtle signals that environmentally-conscious legislation is something that should be bipartisan, not a polarizing issue. Rather, Biden intends to reverse Trump’s tax cuts and closing tax code loopholes that enable corporations to continue with harmful practices. Biden’s plan seems to strengthen Obama-era environmental legislation. The economic consequences of closing tax loopholes are drastic. Primarily, Biden’s plan illustrates the mechanics of economic trade-offs. Due to the plurality of loopholes, the IRS estimates that over 1 trillion dollars are lost in revenue. Closing loopholes without lowering tax rates inadvertently will increase taxes on the whole United States economy, and in turn, result in lower economic growth. Yet, in addition to raising revenue for environmental legislation, closing tax loopholes is likely to reduce income inequality as well.
Nevertheless, The Green New Deal is unparalleled in its reach for compounding the effects of climate change. The Green New Deal calls for reaching complete reliance on renewable energy for both energy and transportation by 2030, providing for a just transition for workers, declaring climate change a national energy, and investing in research and development. Proponents of the deal, such as Senator Bernie Sanders and Representatives Alexandria-Ocasio Cortez have called for a $16.3 investment in combating climate change. Though detailing the consequences of climate change, the exact economics of the Green New Deal are not illustrated in the piece of legislation itself. Common ideas include using revenue generated from holding fossil fuel companies accountable for their role in expanding this crisis and increasing taxes on the wealthiest individuals in the United States. Though there is likely to be short-term frictional unemployment due to unprecedented changes in industry, the plan creates new jobs in renewable energy fields. In turn, the plan is likely to increase the United States’s GDP. Overwhelmingly, figures indicate that the Green New Deal will generate more economic growth.
Given the economic benefits of the Green New Deal, it seems surprising as to why it is controversial. Firstly, calls for increased taxes to fund the programs illustrated the Green New Deal are popular only amongst liberals, with Republicans and moderate Democrats against it. Additionally, as the legitimacy of climate change itself is doubted, Republican politicians are not in favor of an all-out admittal to the problem. As the Green New Deal significantly impacts the fossil-fuel industry, essentially eradicating it, special interests and corporations are not in favor of the act’s far-reaching power.
In this scenario, politics have been considered more important than the environment. Climate Change is no longer a potential threat, but one that is already impacting individuals across the world. Despite the controversy, it’s imperative to address the issue now. □
- DSouza, D. (2020, October 08). The Green New Deal Explained. Retrieved December 03, 2020, from https://www.investopedia.com/the-green-new-deal-explained-4588463
- Davenport, C., & Friedman, L. (2020, November 17). Biden Plans to Move Fast With a ‘Climate Administration.’ Here’s How. Retrieved December 03, 2020, from https://www.nytimes.com/2020/11/17/climate/biden-climate-change.html
- Daugherty, G. (2020, November 09). Biden’s Plan for Climate Change. Retrieved December 03, 2020, from https://www.investopedia.com/biden-s-plan-for-climate-change-5083643
- D’Souza, D. (2020, November 09). Comparing the Economic Plans of Trump and Biden. Retrieved December 03, 2020, from https://www.investopedia.com/comparing-the-economic-plans-of-trump-and-biden-4843240