Green New Deal: An Economist’s Perspective

As climate change and policies to address it take center stage, it is important to have a constructive discussion that will bring productive and long-lasting results to this important problem. There is no doubt the Green New Deal (GND) has provoked that discussion with its ambitious goals. As ACCF has stated before, we agree that there is a need for policies that will reduce global greenhouse gas emissions. However, we also need to understand the impact of the policies suggested on other sectors of the economy to make any kind of judgement on their feasibility. Without a reliable and consistent estimate, it is difficult to render judgement. Many back of the envelope calculations have put the cost of the Green New Deal, which currently lacks details, at trillions of dollars. Obviously, there are a lot of discussions to be had surrounding many aspects of the Green New Deal. We wanted to focus on the more technical aspect, whether the Green New Deal can be modelled and analyzed to inform us about its costs and benefits. Who better than David Montgomery, Ph.D., with more than 40 years of experience in economic modelling and energy markets, to answer some of our questions:…