Many countries have been considering Green Recovery (GR) measures to recover from the corona pandemic recently. GR generally represents “Achieving job creation and economic growth while avoiding a rebound in greenhouse gas emissions and creating a resilient society against crises such as climate change and pandemics.”

The more specific content of the GR overlaps greatly with the Green New Deal (GND), which aims to expand job employment and economic growth through renewable energy and energy-saving, which also overlaps with the previous Green Growth discussion.

In the U.S., the youngest Congress member Ms. Ocasio-Cortez presented a resolution titled “The Green Deal” to Congress in February 2019. Both Senator Sanders and former Vice President Biden, who was the Democratic nominee for President, have also released their own GND proposals which are discussed below.

This paper presents specific proposals for GR and GND in the US and Korea, focusing on financial resources and climate justice issues such as inequality, poverty, race, and gender.

Detailed Contents and Financial Resources

Most GN and GNDs are a combination of numerical targets and investment amounts. In the case of former Vice President Biden’s GND proposal, for example, it aims to increase the percentage of renewable energy in electricity generation to 100% by 2035 and would invest $2 trillion (around ¥214 trillion) over 4 years in infrastructure. Senator Sander’s GND proposal has similar targets, but the total investment is a massive $16.3 trillion (around ¥1,744 trillion) over 10 years, with detailed funding and repayment plans. Those proposals are explained in detail below as they can be useful for the discussions in Japan.

The main sources of revenue and funding in Senator Sanders’s proposal are as follows: (1) $3.885 trillion in the elimination of fossil fuel subsidies, fossil fuel corporate taxes, and polluter fines and lawsuits, (2) $1.2155 trillion in military spending reduction related to protecting oil transportation routes, (3) $6.4 trillion in electricity sales, (4) $2.3 trillion for an income tax on new employment for 20 million people, (5) $1.31 trillion in current unemployment assistance programs for 20 million people, and (6) $2 trillion in an additional tax increase for the wealthy and large corporations.

There is concern that such significant financial spending might lead to hyperinflation. However, Galvin and Healy (2020), for example, argued that (1) the possibility of hyperinflation is low given the size of taxation and wartime government bond issuance and (2) the greatest pressure is in the taxation for the wealthy, but the tax rate is at the same level as the previous one for the wealthy in the 1960s and 70s.

GND and Climate Justice

GND, especially GND in the US, heavily incorporates climate justice into their climate change measures by taking into consideration the issues of inequality, poverty, race, and gender. In fact, Sanders’ GND proposal is a good example of this principle, which includes (1) the creation of 20 million full-time jobs (with a five-year wage guarantee), (2) the construction of 7.4 million low-cost, low-carbon houses, (3) energy efficiency improvements to existing houses, including 1.2 million federal housing units, (4) improving the climate resilience of underdeveloped and indigenous communities, (5) funding for rural areas, and (6) provisions of the school lunch program.

Galvin and Healy (2020) explain why inequality issues are in line with climate change measures and GND as follows: (1) the higher the economic inequality, the greater the CO2 emissions (previous research shows that countries with higher Gini coefficients also have higher CO2 emissions per capita and that increasing taxes on the rich while redistributing those revenues to the poor can reduce a country’s total CO2 emissions); (2) large corporations, especially those in energy-intensive industries, are large CO2 emitters and have a large say in politics while defending their rights; (3) climate change measures mainly benefit the low-income group; (4) carbon pricing (e.g., carbon tax), as one of the climate actions, would have a greater impact on low-income groups and could lead to riots, as in France; and (5) unemployment problems are more serious among the female and non-white population and GND would help to solve this problem. In other words, reducing inequality and big business domination would contribute to reducing carbon emissions. By contrast, climate change measures without inequality considerations will fail

GND in South Korea

The South Korean government is also pushing GND as a national policy. In July 2020, shortly after the ruling party won a landslide victory in the election, President Moon Jae-in officially announced the Korean New Deal, which is aimed at bringing on nationwide transitions in three ways: from a follower to a pace-setting leader in the world economy, from a carbon-dependent to a low-carbon economy, and from an unequal to an inclusive society. “This is the blueprint for South Korea’s next hundred years,” said President Moon at the beginning of the address.

The Korean New Deal revolves around three pillars – the Digital New Deal, the Green New Deal, and a better social safety net – with a total investment of 160 trillion won (approximately 14 trillion yen, consisting of 70% public funding and 30% private funding) and the creation of 1.9 million new jobs by 2025.

A more specific version of the policy consists of the remodeling of public buildings, the creation of urban forests, recycling, the development of renewable energy infrastructure, and the creation of a low-carbon energy industrial complex, for which the amount of investment and employment have been specified. Specific measures to combat unemployment are also presented.

The Challenges Facing Japan

At its core, energy transition, GR, and GND share the same spirit – embracing renewable energy, encouraging energy conservation, and phasing out fossil fuels. The price of renewable energy has fallen by 90% in the last decade, which opens up the possibility of protecting the environment without sacrificing economic benefits in today’s world. Therefore, many governments are considering concrete GR proposals. Japan, however, is about to introduce regressive policies, such as substantial subsidies for existing nuclear power plants and coal-fired power plants.

For a concrete proposal for GR/GND in Japan, please refer to the “Strategy for Zero Nuclear Power Generation and Energy Conversion”, with which I was involved. Based on these concrete proposals, we may expect an active discussion on the future of GR and GND in Japan.

Text: Jusen Asuka (Tohoku University)