Recent market turmoil in the US has increased the chances of a Democratic win in the US Presidential elections in December 2020. The Democrats are putting the ‘Green New Deal’ at the centre of the 2020 US presidential campaign. The aim of the Green New Deal is to halve US climate emissions by 2030. The front runner for the Democratic presidential candidate is Joe Biden. He is embracing the new Green Deal and putting US$ 1.7 trillion behind the deal. A democratic win would catapult the US to the forefront of Green Economics and be an incredible lead for other large economies.
What are the chances of the Democrats winning the next election in the US? Well there are notoriously two data points that President Trump watches: popularity polls and the stock market. The US market (S&P 500) has fallen into bear market territory and the economy in the US is likely to go into a recession (two consecutive quarters of negative GDP growth). With both these indicators negative, a re-election for the Republican Party is looking increasingly unlikely. Add in the effect of the coronavirus, which is highlighting the importance of health care and universal benefits in times of a crisis, then Democratic values are looking more important to Americans.
The Green New Deal is a play on the words of President Roosevelt’s ‘The New Deal’ which was an economic programme implemented after the Great Depression to revive America’s prosperity. The New Deal involved large government programmes that employed people to build infrastructure such as the hoover dam. The New Deal worked by borrowing money, employing people and increasing their prosperity, which then fed into the economy through increased consumption.
The Green New Deal will also be funded by debt and will create millions of jobs and generate income and tax revenues. The aim will be for a rapid decarbonisation of the US, halving of carbon emissions by 2030 and 100% of power to be supplied by renewable energies. There are also some social aspects to the Green New Deal that aim to pair labour programs with measures to combat climate crisis.
Bernie Sanders has a US$ 16.3 trillion plan over 15 years to implement his version of the Green New Deal. His deal is the most progressive pushing for the US to have a carbon free economy by 2050. He also aims for a 100% renewable energy in the countries two most carbon intensive industries : transportation and power by 2030. He will invest in solar, wind and geothermal power. The plan will also declare climate change a national emergency and bring the US back on board with the Paris climate agreement.
However, it is looking more likely that Joe Biden will be the democratic candidate. He has a much smaller climate proposal valued at just US$ 1.7 trillion, but is also backing the Green New Deal. Biden said he “believes the Green New Deal is a crucial framework for meeting the climate challenges we face,”. Also, for the first time, Biden said he would not take campaign contributions from oil, gas or coal companies or their executives. That appears to put him in line with the majority of Democratic presidential candidates, who have signed a No Fossil Fuel Funding pledge.
Ironically a falling US economy and stock market could be just what the planet needs for transformation. If the government is looking to spend its way out of a recession through government programmes, then the likelihood of the green deal going through in the US is looking more appealing and could be just what the US needs after this crisis to get back to restore the economy.
Rebel Economics 
Very interesting. Thanks for sharing.
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