US Green New Deal: It won't pass, but that's fine

We’re more than halfway through Donald Trump’s presidential term – and, as far as wind investors are concerned, it’s a case of ‘so far, so good’.

Yes, he occasionally pops up with crowd-pleasing criticisms of wind farms, like at the Conservative Political Action Conference last week as he blasted the mooted Green New Deal: “When the wind stops blowing, that’s the end of your electric.” Yawn!

Yes, he wants to slash the US Government's budget for renewables research. That is a worry.

And yes, there is still uncertainty for US wind after the production tax credit ends.

But wind has kept growing despite statements from the Climate-Change-Denier-in-Chief. Wind farms totalling 7.6GW were completed in the US in 2018, after 7GW in 2017 and 8.2GW in 2016. Growth has been particularly strong in Republican states, which got wind tongues wagging that renewables was no longer a partisan issue. However, to that last point we can only say three words: ho ho ho.

The debate about the Green New Deal since it was published by Alexandra Ocasio-Cortez, Democrat member of the House of Representatives, last week has shown that renewables and climate change is still a huge source of division between the two main US parties.

To Democrats, it contains the important steps that the US must take to overhaul the country’s economy and address climate change. Key policies include a shift to 100% renewable energy backed by a national smart grid; decarbonisation of infrastructure and industry; and upgrading all business to be energy efficient. All major tasks.

To Republicans, it is the ‘green raw deal’. A liberal and socialist nightmare that would wreak economic havoc by destroying business models and jobs, and change society in the US in scary and dystopian ways. Even cannibalism. Actual cannibalism.

That isn’t to say that support and hostility to the policy strictly follow party lines.

For example, Democrat Nancy Pelosi, speaker of the US House of Representatives, has refused to set up a special committee to develop the proposed deal, and instead set up a special panel on climate change. Likewise not all Republicans will oppose it.  But it does show that the idea of a supportive consensus for renewables is a myth.

And that’s why we don’t expect a Green New Deal in the US in its current form.

First, there is the political maths. The Republicans control the Senate and are using the deal to paint Democrats as embracing extreme policies. This makes it extremely unlikely that the Green New Deal would get through Senate in the next two years.

Second, there is the ambition in the deal. Even a savvy eight-year-old knows that the best way to get a kitten is to start by asking for a pony. It makes sense for the deal to push for serious goals, including its call for 100% renewables by 2030, as this means that it could still end up looking ambitious even after it ends up being watered down.

However, in the short term that will also make it less palatable. It’s a tricky balance. Even renewable energy firms rarely talk publicly about moving to 100% renewables, but that may be a failure of communication by companies in the clean energy sector.

And yet, we’re still positive.

This shows that the climate crisis and renewables will remain a key issue heading in to the 2020 presidential campaign. Expect plenty more ill-informed Trump outbursts.

It is also likely to galvanise other campaigns, including former New York mayor Mike Bloomberg’s campaign for 100% renewables, called Beyond Carbon; and worldwide student protests about the climate that have captured imaginations in recent months. Politicians who oppose efforts to fix climate change will be the subject of mass anger as they show they are on the wrong side of history.

And it shows that firms in the wind sector, and renewables investors more widely, will need to make whatever headway they can on climate change, rather than relying on the whims of politicians. With support from corporates who want to buy the electricity produced by wind farms, that could make a major difference.

It’d be great if the US were to get a Green New Deal.

But, even if it doesn’t, a high-profile debate could still prove beneficial.