Three Reasons to Greenlight a Green Marshall Plan

A serious response to the climate crisis must help other countries grow sustainably. Photo from Wikimedia Commons.

by Trevor Levin

When Elizabeth Warren announced an economic agenda that included a “Green Marshall Plan” last month, I was overjoyed — not only because it’s an even more promising concept than the Green New Deal, but because I had submitted the idea to her Senate office in February! (Okay, yes, I’m sure her climate policy team had more to do with it than a no-name constituent talking to a Senate intern, but let me live.)

Climate policy discussions in U.S. progressive circles tend to focus inward — understandably, as the U.S. emits the second-most carbon of any country and has usually seemed more likely to provide “climate leadership” than the biggest emitter, China. And we could certainly make significant progress on our own emissions, ideally through a don’t-call-it-a-tax cap-and-trade with a price collar. (Because price ceilings and floors insure against big misses in estimating compliance costs, collared cap-and-trade achieves virtually the same result as a carbon tax without the dreaded T-word.) But an outward-facing climate policy on the scale of the post-World War II Marshall Plan could have a much larger per-dollar effect on emissions, not to mention diplomatic, security, and moral benefits.

What might such a plan look like? At the same scale in GDP terms (about 4% of annual GDP) as the original Marshall Plan, it would invest $800 billion over four years in sustainable development in poor countries. This could mean grants for solar farms in India, low-interest loans to build public transit in Lagos, funding clean energy research and exchange programs with Chinese universities (a “Green Marshall scholarship”?), compensating tropical nations for conserving their rainforests, and supporting the WHO’s efforts to curb the very unsafe, highly polluting, and shockingly widespread practice of cooking with simple stoves in unventilated rooms. And, of course, we’d have to dedicate some of that $800 billion towards rebuilding the foreign service to develop our on-the-ground intelligence to ensure that these projects have local support and that the money flows toward reputable and effective recipients.

But why do these ideas deserve our funding over a domestic Green New Deal?

1. Curbing emissions in developing countries is both more important and cheaper, but asking them to sacrifice growth raises ethical dilemmas. U.S. and European emissions have been falling for years, but that decrease has been more than offset by increases in China, India, and the rest of the developing world. Indeed, the U.S. is now just 15% of global emissions (as of 2015), so even if the Green New Deal hit its target of U.S. carbon neutrality by 2030, it might not be enough to keep the temperature rise below 2 degrees Celsius. (Funding research for green energy would make it cheaper relative to fossil fuels everywhere, but U.S.-only policy might also increase emissions elsewhere by encouraging firms to simply move their production, a phenomenon called “leakage.”) Thus, a plan to stay below 2C must have a major international plank. Plus, it’s less costly for poorer countries to reduce future emissions than rich countries, which makes intuitive sense: it’s cheaper to not build a new coal plant than to replace a coal plant with a hydroelectric one, which is why the Kyoto Protocol allowed rich countries to buy emissions allowances from poorer ones.

Source: U.S. Energy Information Administration.

The problem with assigning the bulk of the burden of climate adaptation to developing world, however, is that it seems deeply immoral: the countries responsible for the vast majority of the carbon currently in the atmosphere keep their lifestyle, while developing countries (most of which were colonized and/or exploited by the former group) give up the massive welfare benefits of industrializing. That’s why one of the core principles of the United Nations Framework Convention on Climate Change is the “common but differentiated responsibilities and respective capabilities” doctrine, which explicitly puts the onus on the rich world to lead the way. Unfortunately, China’s “undeviating recital” of the doctrine helped tank negotiations at the 2009 Copenhagen Summit. It might be unfair to ask developing countries to shoulder all or most of the emissions reductions, but if their emissions keep growing at their current rates, staying below 2C will prove impossible, and those countries will suffer the most.

But unlike a Paris Agreement-style emissions target system or a global carbon tax that would, as a side effect, discourage investment in developing countries, a Green Marshall Plan would both channel economic activity into developing nations and enable them to industrialize more cleanly than the 19th-century Europe and the U.S. It would preserve the efficiency gains from targeting developing-world emissions while addressing the distributional objection to doing so.

2. It would bolster U.S. foreign policy goals. Embarrassments like the Iraq War, the withdrawal from the Paris Agreement, and the Trump Administration’s bloviating towards Iran and North Korea, coupled with the collapse of the U.S. foreign service, have reduced American soft power, driving countries toward seemingly more stable and proactive alternatives like China. Any kind of 21st-century “Marshall Plan” would go a long way towards demonstrating a renewed American commitment to diplomacy, engagement, and economic interreliance, but one focused on climate change would have a few advantages.

First, it would directly address distrust borne from our previous climate actions, including both the Paris withdrawal and our refusal to sign the Kyoto Protocol.

Second, we could target our grants and investments toward specific foreign policy goals. Funding clean energy in the Northern Triangle could help reduce the push factors for immigration. Diversifying the fossil fuel-based economy of northern Nigeria could reduce the volatility and violence that enable groups like Boko Haram and ISIL to recruit from the area. And supporting transitions toward sustainable agriculture in Southeast Asia would go a long way towards the TPP’s goal of bringing the Pacific region more firmly under U.S. influence as China strengthens. (The Green Marshall Plan shares this justification with the original Marshall Plan, which existed entirely for the purpose of keeping Western Europe in the capitalist umbrella.)

Third, a Green Marshall Plan would mitigate the international climate-related challenges that will dominate the foreign policy of the 21st century, from the oncoming climate refugee crisis to the dependence on oil that already raises the stakes of every Persian Gulf-adjacent conflict.

3. It could bring hundreds of millions out of poverty. Globalization, state-building, and a drop in international violence have already brought the share of humanity living in poverty to a record low, no matter how you define it. A Green Marshall Plan would have similar side-goals as a Green New Deal: protect against disruption while solving long-fought economic problems. But a Green Marshall Plan could do a lot more for human welfare than a Green New Deal. As with any well-designed foreign aid, a dollar spent on a given program in India will have a vastly larger impact than a dollar spent on a similar program here because of diminishing marginal returns. Developing countries face problems that developed countries have long had the resources to solve, like universal access to basic sanitation facilities; in dollar terms, these are relatively low-hanging fruit, compared to the problem of U.S. unemployment, which would require a massively expensive job guarantee.

A Green Marshall Plan would need to be sold to the American public. But it can be sold: Americans would reap the benefits of a more stable climate and a more secure, prosperous world. The original Marshall Plan kept our allies close in the face of a rising alternative. Its green successor would do that and so much more.