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12/27/19

Bonds and the burden of climate change

Climate change demands massive investment, and a simple way to deal with the financing problem is for the government to issue bonds. This approach has all kinds of political advantages: as I argued in my proposal for a Global Green New Deal, for example, you can use bonds to insulate climate finance from defunding efforts by the right. Though there are other policy mechanisms that do this as well (for example mandatory spending), in my view any effective short-to-medium term approach to the massive funding that the fight against climate change requires is probably going to demand bonds.

That said, there is also a bad policy rationale for using bonds:
I’ll propose a "Green Victory Bond," backed by the full-faith and credit of the United States by the Treasury Department, to finance the transition to a green economy. These Green Victory Bonds will be sold at levels that allow Americans across the socioeconomic spectrum the opportunity to own a piece of the climate solution, and to benefit from the new green economy that we build together.
Here, Elizabeth Warren, in her latest batch of climate proposals, is proposing a standard bond issuance program - but she's doing more than that. She is also insisting that it is this bond program that gives us "the opportunity to own a piece of the climate solution." This rhetoric is directly at odds with efforts by socialists to assert our shared ownership of the planet as the basis of our right and responsibility to act. That assertion is crucial, because the fight against climate change requires collective ownership and management at odds with ideological doctrines of individual ownership.

Warren's rationale for bonds is also, I think fairly, being read as an argument that they will build public support for a green agenda. This rationale echoes one given by The Center for American Progress in its proposal for a national climate crowdfunding vehicle:
This fund...would signal that Americans remain engaged in the global climate effort...[and] help maintain momentum behind the Paris Agreement, which will be important as countries take stock of global progress on climate change in 2018.
It also echoes the old right-wing "skin in the game" argument that we only "own" a government program if we are involved in its financing; that, evidently, is the only way that people are "engaged in the global climate effort." But again, the problem of climate change is a problem of building support for collective ownership and management, not of just building support for the usual opt-in programs. The government has supported voluntary participation in the fight against climate change for a long time - through things like recycling programs, incentivizing green consumption, and so on - and that has just brought us to where we are today.

This may seem like a lot to read into a few turns of phrase, but these policy roll-outs are carefully calibrated messaging efforts in an area where Warren has struggled to distinguish herself, and the ideological subtext is fairly consistent with her hostility towards socialism.