---------- Forwarded message --------- From: Other News <[email protected]> Date: Tue, Jan 22, 2019 at 8:28 PM Subject: Towards a Caring and Green Economy To: <[email protected]> Email not displaying correctly? View it in your browser <https://mailchi.mp/other-net/towards-a-caring-and-green-economy?e=471e4445c6>. Towards a Caring and Green Economy *By William Mebane * January 22, 2019 - The cause of the government shutdown, with hardships for federal workers and reduced services for all, originates from afar. It is not just the personal and political conflicts between Trump and the Democrats. The situation is the result of decreasing solidarity and inclusiveness over the decades. We are all too familiar with the multiple divisions of America: between rural and urban, rich and poor, young and old, male and female, white and colored, heterosexuals and homosexuals, left-right politics, pro-life and pro-choice, and others. Over the years these divisions have become more intense and above all less tolerant of each other. In addition the middle class has become to feel poor with low growth income over many years. In the last 36 years from 1979 to 2015 the percent change in income after taxes and transfers is only 46% (1.05%/year on a compound basis), for the middle 60%; instead it is 242% for the top 1% and 78% for the next 19%. (Stone, C., et al, 2018) One of the key identities of being American, the possibility of upward social mobility, has been weakened for many. Stagnant middle class income for three decades, while the upper one percent gets enormous gains, tends to deteriorate solidarity even more. These sharp divisions make democracy dysfunctional. Not only does it make political consensus difficult, as we are experiencing, “the evaporation of solidarity turns the characteristics of democracy upside down. Representation becomes polarizing as political leaders fight to privilege specific groups within existing institutions. Mobilization becomes intimidating. Institutional checks and balances become leverage points for blocking minorities for extract concessions. Voters hold their officials to account for their pursuit of ever-nearer definitions of selfinterest. Predictability gives way to uncertainty as politics oscillates between pluralist stagnation and populist outburst. Efforts to reform institutions quickly collapse into zero sum distributive political games. Democracy without solidarity is dysfunctional because its participants no longer view their institutions as representative, equitable, accountable, predictable or even open to reform.” (Jones, E., Matthijs, M. 2017). Is this the situation we want? Is it a good long-term environment for business? Leading business leaders have begun to be concerned, as chief executives received a new missive from Larry Fink, investment manager overseeing $6 trillion at Blackrock that will stimulate debate. “Businesses cannot merely have a purpose. They must be leaders in a divided world. Stakeholders are pushing companies to wade into sensitive social and political issues — especially as they see governments failing to do so effectively,” he wrote in his new letter, which was obtained from a recipient (Sorkin, A. R., 2019). We need policies that increase our solidarity, not exacerbate it. Certainly these trends cannot be reversed easily, and it will take years to recover, as it took years to destroy; but if we do not try, matters will get worse. Political theory suggests “the process continues until new social bonds are formed or institutions are modified for the lower social cohesion by a retreat from the public sphere, decentralization, or succession.” (Jones, E., Matthijs, M. 2017). None of these institutional alternatives appear desirable or appropriate in our global and electronic age. America needs to recapture its solidarity. One opportunity could be found in a Green New Deal. A leading economist has suggested the green plan should be generous with the workers in coal mining and other transition industries having a form of workers’ aid (Krugman, 2018). Last week a highly distinguished group of economists, including the last four chairmen of the Federal Reserve, 15 former leaders of the White House Council of Economic Advisors and 27 Nobel laureates signed a letter recommending “a gradually rising carbon tax that would be distributed to consumers as a ‘carbon dividend.’ “ (Irwin, N., 2019) Particular attention is to be paid to the energy poor who have energy inefficient homes and require financial assistance to improve. The good news is that energy efficiency and solar energy, the core of any green program, are often decentralized and can be designed to reach almost everyone, regardless of race, location, religion, political party, and to a certain extent even income. One of the most popular policies in Italy, also practiced in the States, is tax deduction for energy efficiency and solar investments in homes (ENEA, 2018). There is a history in the US of successfully financing these investments through the utility companies, with low or no front-end costs. State and local activities in energy savings are numerous including energy audits and technical assistance, utility assistance programs, financial assistance and rebates, on-bill and off-bill financing, and new construction (Institute for Local Government, 2013). The new super efficient homes and buildings, Near Zero Energy Buildings or NZEBs that optimize energy savings and solar energy production are best built in open or rural areas where there is more space and freedom of design. This all calls for a decentralized grid structure to connect the local home and commercial producers with the electricity grid. This implies more jobs near these energy producers. Product efficiency standards have been very effective in the US and can continue to be so. We forget that the minimum efficiency standards for household appliances such as refrigerators, washers, heaters, air conditioners and other devices have decreased unit consumption by more than 50% over the last decades. The efficiency labeling system helped to make the more efficient models very successful. The US was also a leader in promoting these energy efficiency labels and standards around the globe. Careful and repeated negotiation with industry produced these results. (US Energy Information Administration, 2017) It is essential that this continues for the automobile industry and that the existing planned efficiency is not rolled back due to the influence of the petroleum industry (Tabuchi, H., 2018). Households need to have the opportunity to purchase efficient vehicles. A significant part of the management of these policies can be done at a state and local level as exemplified by the work of California and other states. We do not need to create big government; we need to transfer those successful and more advanced experiences and management skills to the states and cities where they are required. This is the way Italy, with a per capita energy consumption less than one-half of the US, began in the 1980’s (Italian law 302, 1982) Certainly a gradual carbon tax and dividend system will make matters easier; however the work of energy audits, technical assistance, local construction programs, information campaigns, investment financing, coordination with the utilities, are activities that can be assisted and managed at the state and local levels. The federal government would be involved in the international and countrywide issues, such as management of the carbon tax-dividend, using existing government structures. The project might be thought of as a solidarity and infrastructure program extending into our homes. And maybe this Caring and Green New Deal could get bi-partisan support. The writer is former Director of Energy Efficiency Department at ENEA, the Italian National Agency for New Technologies, Energy and Sustainable Economic Development *References * - *ENEA, 2018, Annual Report on Energy Efficiency.* - *Institute for Local Government, January 2013, see https://www.cailg.org/sustainability-best-practice-area/energy-efficiency-co... <https://www.cailg.org/sustainability-best-practice-area/energy-efficiency-conservation>* - *Italian Law 308, 29 May 1982, n. 308 - Gazzetta Ufficiale* - *Irwin, N., January 19-20, New York Times International Edition* - *Jones, E., Matthijs, M., 2017, Government and Opposition, Vol. 52, No.2, pp. 185-210* - *Krugman, Paul, December 31, 2018, New York Times,* - *Sorkin, A.R., January 17, 2019, New York Times* - *Stone, C., Trisi, D., Sherman, A., Taylor, R. December 11, 2018, Center for Budget and Policy Priorities, (Data from Congressional Budget Office)* - *Tabuchi, H., December 25-25, 2018, New York Times, “ U.S. Energy Information Administration, June 2017, Residential End Uses: Historical Efficiency Data and Incremental Installed Costs for Efficiency Upgrades.* <https://other-news.us13.list-manage.com/track/click?u=e397bb7f243b9efb847d53922&id=05feed8d20&e=471e4445c6> <https://other-news.us13.list-manage.com/track/click?u=e397bb7f243b9efb847d53922&id=c5520d3301&e=471e4445c6> <https://other-news.us13.list-manage.com/track/click?u=e397bb7f243b9efb847d53922&id=e32bf10f71&e=471e4445c6> The figures speak clearly: we have a deadline of 12 years after which climate change becomes irreversible. The lack of action by governments, corporations and citizens is now dramatic. Othernews has decided to start a specific service on this theme, which will monitor data and events ... and their impact on the economy, society and nature. 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