How Viable Are AOCs Green New Deal Energy Proposals? Just Ask Europe

http://fortune.com/2019/05/14/alexandria-ocasio-cortez-green-new-deal-energy-europe/

If the U.S. ever gets around to implementing aspects of the so-called Green New Deal, Europe has a few lessons to share.

When Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey, both Democrats, introduced their Green New Deal resolution earlier this year, it quickly sank in the Senate, largely due to Republican opposition. But its ideas are certain to remain in the spotlight, given the increasing visibility of climate change, Ocasio-Cortez’s continued promotion of the package, and the number of Democratic 2020 contenders who have thrown their support behind some of its proposals.

No country on Earth has tried to implement all the Green New Deal ideas at once—it’s a policy smorgasbord heaving with environmental, social and stimulus-related offerings. Critics have painted the resolution as radical, but many of its social elements are so common in Europe they’re almost taken for granted, such as universal healthcare. And two of its energy-related proposals have started to become reality there, too. Europe has, in essence, tested the viability of transitioning to renewable energy and making houses more energy efficient. And the results of those experiments are worth inspecting, particularly when it comes to timing and the question of jobs.

Power goes green

One of the marquee Green New Deal proposals is for the U.S. to entirely switch to “clean, renewable and zero-emission energy sources” by 2030, which is roughly when humanity is expected to cross the point of no return: a global temperature rise of 1.5°C above pre-industrial levels. The worst effects of climate change will likely become unavoidable once we pass that threshold.

Alexandria Ocasio-Cortez, who upset a long-time Democratic incumbent to represent New York's 14th Congressional District in the House of Representatives, introduced the Green New Deal in February 2019. (Photo by Ira L. Black/Corbis via Getty Images)

Alexandria Ocasio-Cortez, who upset a long-time Democratic incumbent to represent New York’s 14th Congressional District in the House of Representatives, introduced the Green New Deal in February 2019. (Photo by Ira L. Black/Corbis via Getty Images)

Arguably the best-known example of such a big energy transition is that of Germany’s Energiewende, which means, well, “energy transition.” The Energiewende was established by Chancellor Angela Merkel’s conservative-led coalition with a 2010 law that said renewable energy must account for 60% of supply by 2050. Since then, wind, hydro and solar power’s share of total generation has gone up from 17% to 40%, which is ahead of schedule; the target was to achieve a renewables share of at least 35% by next year.

However, while most see the Energiewende as a success—the vast majority of Germans support it even though it currently means paying more for electricity—it’s still a lot less ambitious than what’s been proposed under the Green New Deal in the U.S.

So, if a Green New Deal-backing Democrat wins next year’s election, would it be possible to achieve all-clean energy in a decade? European experts see the idea as hugely ambitious, but perhaps doable, depending on whom you ask.

Selling the change

“I feel very sympathetic [to the proposed timescale],” said Daniela Setton, a senior research associate at the Institute for Advanced Sustainability Studies in Potsdam, Germany. Setton said the tight timescale could succeed in spurring urgent action. However, she added: “If you take that too seriously, a disappointment will definitely come. That’s very ambitious, to achieve this in 10 years.”

Jonas Sonnenschein, a green energy economy researcher at Sweden’s Lund University, said the pace of the Green New Deal proposals is not excessive, as the required technologies are ready to go. Plus, “by actually deploying them on a very large scale, you can bring down prices,” he said.

The pre-mounted star of a wind turbine is fitted on the 139-metre-high tower in Cheinitz, Germany. (P

The pre-mounted star of a wind turbine is fitted on the 139-metre-high tower in Cheinitz, Germany. (P

icture alliance via Getty Image)

However, Sonnenschein is skeptical about the economic stimulus aspect of the Green New Deal, which was partly inspired by President Franklin D. Roosevelt’s series of public work projects in the post-Depression 1930s. Like its namesake, the Green New Deal aims to create a lot of jobs and economic activity through the changes it entails. While the green stimulus proposal may prove attractive to politicians, he said, studies show that reaching a zero-carbon future means drastically cutting energy use. “That may also mean you have to cut GDP growth targets,” he said.

Then there’s the issue of energy-sector jobs. The Green New Deal proposals include a call for full employment, and Sonnenschein said the evidence is “quite clear” that renewable-energy generation creates more jobs overall than those in the traditional energy sector. That’s because the generation is more decentralized, relying on many small solar, wind, and hydro installations feeding into the grid, rather than a few traditional power plants that may each have one big boiler.

But drill down to a regional level, and you encounter big political problems. In Germany, for example, the recently-announced phase-out of coal will hit jobs in some eastern areas of the country—where coal is currently mined—particularly hard.

That prospect has helped the far-right Alternative for Germany (AfD) party make inroads in states such as Brandenburg, by claiming the coal phase-out represents elite politicians ignoring the needs of common workers.

“The experience in Germany is that it’s a trade-off,” said Setton. “The effect is that you destroy well-paid, secure jobs in regions, when it comes to [coal] mining, where you have no other jobs.”

Housing goes green

The Green New Deal also calls for a 10-year plan to make U.S. buildings as energy-efficient as possible—both new builds and “all existing buildings.” After all, the deal’s climate targets aren’t going to be reached if most people’s houses are still leaking heat and using too much electricity on air conditioning and humidity regulation.

A good—if relatively modest—example of this retrofitting drive can be found in the Netherlands, where a government-funded initiative called Energiesprong (“energy leap” in Dutch) has over the last five years morphed into a system that’s being exported to the U.K., France, Germany, and even New York State.

Rather than handing out government subsidies to homeowners as a way of encouraging them to upgrade their houses to “net zero energy” status, the Energiesprong approach works with social or public housing developers to clad their existing properties in prefabricated insulation panels, while installing solar panels on their roofs. The focus is on older, cheaper houses whose appearance is probably improved by the cladding, and that can be addressed in bulk—which cuts costs.

The idea is that the improvements pay for themselves over 30 years, due to cuts in maintenance and energy requirements, and that expansion will bring prices down to the point where private home-owners can consider the same technology.

A worker installs solar panels atop a house in The Hague, Netherlands. (Photo by Yuriko Nakao/Getty Images.)

A worker installs solar panels atop a house in The Hague, Netherlands. (Photo by Yuriko Nakao/Getty Images.)

’10 years is a fantasy’

But the time frame is a problem, at least in the context of the Green New Deal proposals.

“Retrofitting your whole building stock in 10 years is a fantasy,” said Jasper van den Munckhof, the director of the Energiesprong Foundation, which coordinates the initiative’s push across various markets.

At the moment, around 2,500 to 3,000 homes are being retrofitted under the Energiesprong scheme each year in the Netherlands, a country with a population of 17 million. By van den Munckhof’s calculations, attempting an upgrade of all Dutch homes over 30 years—three times the Green New Deal timescale—would mean retrofitting 1,000 homes a day. Consider that the U.S. population is 19 times that of the Netherlands, and you get an idea of the scale of the task.

According to van den Munckhof, upgrading all U.S. homes in a decade is impossible because the building sector is behind in its use of prefabricated materials and industrialized building processes. Getting it up-to-speed—even with the intensity of a military operation—would take “a few years at least.”

However, van den Munckhof does see huge opportunity for job creation in the Green New Deal’s green housing proposal. By setting up new factories that churn out prefabricated insulation panels, “you create work for people in their fifties who are just not able physically to work in a building site,” he said. “In the lower-educated group, there’s a lot of industrial employment potential—kind of like the car industry. It actually produces jobs where you need to have job creation.”

Changing views

For Green New Deal devotees—and its opponents, too—there’s a key lesson from the European experience: deployment brings down prices, creating new solutions to old problems.

For example, in Germany, using renewable electricity rather than oil or gas to heat houses used to be frowned upon, because clean power was expensive and converting it into heat was seen as wasteful. However, the scale of the country’s Energiewende push has over the last nine years successfully driven down the cost of solar power from 24 euro cents ($0.27) to just five euro cents per kilowatt hour.

That’s allowed for a dramatic rethink of how best to make homes more energy-efficient. According to Dirk Uwe Sauer, a professor at the RWTH Aachen technical university, the aim was once to reduce houses’ energy demand to almost zero—an expensive and difficult task. But now the industry realizes it makes more sense to bring down heating and air-conditioning requirements less drastically than that, by simply better insulating the buildings, and to then supply those reduced energy requirements with low-cost, clean electricity.

“Because of the change in prices, some former ideas and concepts could be changed again,” Sauer said.

Of course, one of the hurdles of the Green New Deal is that its proposals go beyond energy and the environment, veering into social program territory by calling for universal healthcare and a guaranteed “job with a family-sustaining wage” for everyone. In short, the package laid out by Ocasio-Cortez and Markey was unmistakably progressive. And that may prove problematic when getting more conservative-minded people to take it up.

“I think it is essential to also include social aspects, but… it may be counterproductive if you mix climate change policies too strongly with the liberal, progressive agenda,” said Setton. “In Germany, this is not so much the case… It’s important that all of the parties say this [is] something we all need to take care of, like economic growth.”

“It’s important to bring society together and not view climate change through the polarization of society,” Setton said. “This is a huge danger.”

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