The Green New Deal in a Kaleckian model of growth and distribution

In this chapter, I explore the impact of the Green New Deal (GND) on carbon emissions and the economy using a Kaleckian model of growth and distribution. While green productivity improvements and government spending on renewable energy under the GND will reduce emissions per unit of output, they also increase economic growth, which increases carbon emissions. In addition, the GND implies a reduction in the markup and an increase in depreciation, which also have the effect of increasing economic growth. With reference to ecological economics, while relative decoupling of the economy from carbon emissions will occur, absolute decoupling may not. This suggests that the argument for the GND is only strong when carbon offsets are understood to be effective in reducing emissions. Otherwise, the GND appears to be a national greenwashing exercise and alternative arguments for degrowth need to be taken seriously.