A think tank led by a former Congressional Budget Office director said Rep. Alexandria Ocasio-Cortez’s (D-N.Y.) big plan to fight climate change could cost as much $93 trillion.
By comparison, total government spending over the next 10 years is projected at less than $60 trillion, according to the Congressional Budget Office.
American Action Forum, headed by Douglas Holtz-Eakin, concluded that over a 10-year period the Green New Deal (GND) could cost taxpayers between $51 trillion and $93 trillion.
Household energy costs are projected to increase under the GND, the study also notes, with optimistic estimates suggesting that electricity expenditures would climb by 22 percent and “with an average monthly electric bill in 2017 of $111, the average household could expect around $295 of increased annual expenditures on electricity.”
Holtz-Eakin added that the staggering cost estimate is an “order of magnitude” approximation that does not even capture the “social and institutional changes far exceeding the narrow policy goals” that adoption of the GND implies, as “these changes are impossible to quantify at this point.”
Many of the plan’s proponents—like Sen. Ed Markey (D-Mass.)—deride attempts to quantify the plan’s financial impact. “Any so-called analysis of the #GreenNewDeal that includes artificially inflated numbers that rely on lazy assumptions, incl. about policies that aren’t even in the resolution is bogus,” Markey said on Twitter.
Democratic presidential hopeful Kamala Harris has also refused to put a price tag on the GND saying in an interview Sunday that “it’s not about a cost,” but rather return on investment.
‘Likely Social Upheaval’
Holtz-Eakin, who served as director of the nonpartisan Congressional Budget Office from 2003 to 2005, and co-author of the study, stands by his numbers.
“Even if the estimates are 5 to 10 times too high (and I suspect they are more likely too low),” said Holtz-Eakin in a blog post, “it is hard to wrap one’s head around numbers these large. But if you manage to do so, be aware that the likely social upheaval would be even larger.”
He added that while part of the GND is clearly intended to identify areas of focus and generate enthusiasm for such aspirational goals as a pristine environment and quality infrastructure, he added that “the rubber meets the road, however, with the policy details.”
Holtz-Eakin said that one pillar of the GND relates to the production and use of energy in the United States. The second pillar, according to the former economics professor, “envisions re-engineering essentially every aspect of American society and its institutions.”
Holtz-Eakin added, “Top-down societal engineering should make you very (very, Very, VERY) nervous.”
“For me, a way to think about the GND is that it is simultaneously a radical overhaul of the production and use of energy in the United States (the “Green” part) and a sweeping revision of the nature of economic relationships in the society (the “New Deal” part),” Holtz-Eakin said in a blog post. “As the table clearly demonstrates, both are quite expensive.”
“The green agenda—electricity grid, transportation system, guaranteed energy-efficient housing—adds up to $8.3 to $12.3 trillion over the next 10 years. The economic agenda—jobs, health care, food security—accounts for another $42.8 to $80.6 trillion.”
The central goal of the plan is to achieve “a greenhouse gas neutral society” in 10 years and includes such measures as upgrading or replacing all buildings in the United States, substituting air travel with high-speed rail, and phasing out fossil fuels entirely.
Holtz-Eakin noted that besides its massive cost, the GND involves “further expansion of the federal government’s role in some of the most basic decisions of daily life.” He added, “It would likely have a more lasting and damaging impact than its enormous price tag.”
Supporters of the GND said the cost of inaction would be even more pricey.
The resolution itself, released earlier this month by Ocasio-Cortez and Markey points to a report on global warming released by the United Nations last October that claims catastrophic climate change could cost more than $500 billion annually in lost economic output in the United States by 2100.
“It is the moral economic national security issue of our generation,” Markey said in a recent interview.
Many conservative commentators, however, have long argued that most proposed solutions to climate change would do more harm than good.
Author and analyst Trevor Louden said, “If fully implemented, the Green New Deal will at best plunge the world into a massive war or, at worst, into an unprecedented permanent tyranny.”
“The Green New Deal, which only a few years ago would have been labeled as crackpot utopianism, is heralded on the left as a serious program for addressing environmental issues and social inequalities,” Louden wrote, adding, “in reality the Green New Deal is a deeply socialist plan formulated and promoted by bona fide communist groups.”
Rep. Alexandria Ocasio-Cortez (D-N.Y.), the main sponsor of the bill in the House of Representatives, said that to achieve the goals in the proposal, the United States would need to undergo a “World War 2 scale mobilization.”
“Americans love a challenge,” Ocasio-Cortez wrote, “This is our moonshot.”
“The Green New Deal is a national suicide pact,” Louden retorts, adding that the GND “may not give us World War III—but only because America will be too weak to fight back.”