Harris’s Global ‘Green New Deal’

Americans today increasingly recognize the need for a more intentional approach to industrial policy. Whether in the context of competition with China, the middle-class job market, or general economic growth, all but the most strident libertarians have acknowledged the harms caused by the decline in American manufacturing, productivity growth, innovation, and competitiveness over the last few decades. More generally, this recognition is what fundamentally informs the appeal of the slogan, “Make American Great Again.” But while many on the Left now understand the rhetorical appeal of pro-industry and pro-worker populism, proposals like the “Clean Energy Marshall Plan,” a top Harris advisor’s proposal to impose the Paris Climate Agreement through American investment and trade policy, demonstrate a continued desire to place climate ideology before the needs of the working class, both domestically and abroad.

Over the last four years of the Biden-Harris administration, the rhetorical focus on rebuilding industry and the working class has been clear. For example, after passing their signature legislation, the Inflation Reduction Act, in 2022, President Biden stated, “[W]e’re going to build a future—the future—here in United States of America with American workers, with American companies, with American-made products.”

But despite the name, rebuilding American industry and reducing inflation were not the primary focuses of that legislation. As Biden himself admitted last week, “I’m proud to announce that…through my investments, the most significant climate change law ever. And by the way, it is a $369 billion bill. It’s called the — uh, we, we should have named it what it was.” In other words, while Biden and Harris clearly recognized that Americans’ primary concern at the time was inflation, they pursued left-wing environmental priorities while cloaking the effort in dishonest language. Worse, the bill likely increased inflation by injecting enormous subsidies into less efficient and reliable energy sources—subsidies which are now projected to cost more than double the originally estimated $369 billion.

Energy is the lifeblood of any industrial economy. How cheaply and efficiently a good can be produced is significantly affected by the energy costs of running equipment, lighting and weatherizing worksites, and transporting merchandise. These factors also largely determine the quality of life for working-class families—just swap appliances for equipment, homes for worksites, and children for merchandise in the equation.

Industrial policy centered on working-class families, therefore, entails a distinct focus on lowering energy prices. This is doubly true in America, where our energy resources in oil and natural gas give us a natural comparative advantage over countries like China. The expansion of fracking and natural gas development has also allowed the U.S. to lower its emissions more than any other nation over the past fifteen years while providing nearly 120,000 quality jobs. China, meanwhile, continues to expand coal production and now emits more than twice as much CO2 as the United States.

Voters are now wondering if Harris will continue these policies if elected president. While Harris’s campaign attempts to rebrand her as a moderate and as she continues to avoid questions about her plans and record, her advisors are signaling to those paying attention that she has no intention of abandoning the green agenda. On the contrary, she intends to take it worldwide. Recently, Politico Pro—a subscription service marketed to government and business elites—ran a piece titled, “Harris’ real global economic agenda: investment.”

The piece includes quotes from Harris’s advisors and showcases a Foreign Affairs essay, “The Case for Clean Energy Marshall Plan,” by Brian Deese, “economic advisor to both Biden and now Harris.” Deese served as the director of the National Economic Council for the first two years of the Biden-Harris administration, where he helped shepherd the Inflation Reduction Act through Congress. Previously, he was the global head of sustainable investing at BlackRock and deputy director of the Office of Managment and Budget (OMB) in the Obama administration, where he led negotiations on the Paris Climate Agreement. The Politico article states: “Those close to Harris say the investment agenda Deese outlined is something she is personally engaged in…”

So what would this so-called “Clean Energy Marshall Plan” entail? As summarized by Deese, the proposal does three things: “finances foreign deployment of U.S. clean energy technology, secures more resilient supply chains, and creates a new, more balanced trade regime that encourages the development and implementation of clean energy technology.”

While this summary may sound innocuous, the details are not. By “financing foreign deployment,” Deese means setting up a new government entity to issue taxpayer-backed grants, debt, equity, export credits, insurance, and loan guarantees for risky green energy projects. By “securing more resilient supply chains”—a worthy goal—Deese means assuming developing countries would rather partner with the U.S. to secure “clean energy” than with China to secure infrastructure of actual value to their people and economies. By a “more balanced trade regime that encourages…clean energy,” Deese means global enforcement of the Paris Climate Agreement—which the Trump administration withdrew from and the Senate never authorized—through a universal carbon tariff.

These policies—the third piece in particular—are apparently meant to trump existing trade paradigms. Deese explains:

Policymakers will have to reimagine existing trade rules—and be willing to lead the World Trade Organization and other international institutions in thinking about how trade can accelerate the clean energy transition. The WTO’s objective was never just to promote free trade for free trade’s sake; its founding document includes a vision for sustainable development. The WTO must reform if it is to deliver on that vision, but in the meantime, the United States shouldn’t cling to old trade conventions when more targeted and effective approaches exist.

The policy is also envisioned as an alternative to our current trade policy with China. Deese argues:

This approach would allow the United States to transition from its current indiscriminate, broad-based tariff regime to a more comprehensive carbon-based system that more accurately targets Chinese overcapacity and trade imbalance concerns. And the United States should leave the door open to cooperating with China in this context, as well.

Another former Biden-Harris administration official cited in the Politico story also stated, “In addition to countering China…Harris sees U.S. investment policy as helping stabilize political situations in the developing world, and stem the tide of migration over borders…” So, of course, this policy will also address the “root causes” of illegal immigration…

Deese further states his hope that this program would offer an attractive alternative to China’s investments in developing countries under its $1 trillion Belt and Road Initiative. The difference is that China is offering huge investments for infrastructure projects like bridges and ports that actually benefit the economies of developing nations with little scrutiny of their politics. Why would the leaders of these countries instead opt for more expensive “clean energy” from the U.S. that currently represents less than 18% of world and U.S. energy consumption? The answer is that they wouldn’t, which is why Deese calls for worldwide tariffs on emissions (the understated stick behind the investment carrot).

“To receive U.S. investments,” Deese writes, “governments and private sectors in these countries would themselves need to invest in clean energy. The promise of reliable U.S. support would prompt reform.” As a priority for voters, the climate issue falls near the bottom and is even losing steam among younger voters. And that is here in the U.S., the richest nation in the world. Imagine living in India where many places lack basic infrastructure like plumbing, or a country in Africa where burning wood and dung is still the primary fuel, cutting millions of lives short every year. How would these populations feel about the U.S. pressuring their leaders to invest what limited resources their nations have in unproven U.S. clean energy when they lack basic living standards?

Aside from the obvious strong-arming of developing nations through emissions tariffs, the plan would also prey on their economic independence through U.S. investments and organs like the World Bank. As Deese puts it, “authority could be expanded such that U.S. capital is allocated to these banks based on which ones…improve their lending practices for clean energy projects.” In other words, the plan would extend globally the logic of “Environmental, Social, and Governance (ESG)” requirements forced on investors and corporations in the United States by enormous financial entities like BlackRock.

This type of investment also represents the kind of “development economics” that undermines the economies of developing nations. As economist Richard Werner has argued:

…the Washington-type of “development” consists in persuading developing countries, under the guise of ‘comparative advantage’ to focus on low value-added commodities exports, but because their prices decline over long time periods relative to high value-added finished manufacturing goods, these developing countries will experience balance of payments deficits, feel the need for borrowing foreign money and their currencies weaken, causing debt traps – while making their resources ever cheaper for the rich countries to acquire.

He continues:

That is when the foreign vultures move in and demand ‘debt for equity swaps’, handing over valuable domestic assets, land, mines, mineral resources or mining rights, from poor countries to the rich foreign bankers, who had in any case simply created the money out of nothing. The developing country debt is in fact a form of predatory lending…

The actual Marshall Plan this proposal appropriates was passed to boost demand after Europe’s economy was decimated in World War II while helping the U.S. smoothly transition from its massively expanded wartime industrial capacity to a sustainable peacetime equilibrium. The difference between that policy and Harris’s “clean energy” version is that there was an obvious demand for the goods and technology necessary to rebuild civilization after the most devastating war in human history. There is no obvious demand in the developing world—or even in the U.S. outside of elite circles—for inefficient and unreliable “clean energy,” especially when the U.S. already has an abundance of affordable, reliable, and lower-emission fuels like natural gas. Nor does the U.S. have the current capacity to produce most clean energy without significant inputs from China.

Deese claims the plan would “meet other countries’ development needs while advancing U.S. interests,” but it remains unclear who has decided these countries need clean energy to develop or that clean energy production advances U.S. interests, rather than the interests of green investors. He also states that the “most credible way to accelerate the adoption of zero-carbon technologies is to make that technology cheap and widely available,” but built into that logic is the assumption that “zero-carbon technologies” should be mandatory and made affordable by government means, regardless of their natural cost, availability, and reliability.

That assumption is reflected in the second paragraph of the article, which states that “the clean energy transition remains the most important planetary challenge.” Not American decline. Not global poverty. Not countering China. Not even defeating Russia. This understanding leads him to conclude: “In this moment of domestic economic strength…the United States can do something generous for people across the globe in a way that benefits Americans. It should take that leap, not just because it is the morally right thing to do but also because it is the strategically necessary thing to do.”

One is left asking: In what world is the American economy not just strong, but so strong that we can afford to make risky energy investments for foreign nations? In what world is it “generous” or “moral” to force developing countries to purchase less efficient energy from the richest nation in the world and use predatory loans to extract their resources and destabilize their economies? In what world is it “strategically necessary” to set clean energy investment as the guiding principle of U.S. global economic policy rather than our broader industrial competition with China?

Not in the world of today. No American should be fooled by the glossy title of the “Clean Energy Marshall Plan,” or by other “green” policies that co-opt the promise of industrial policy for ancillary goals. Such policies will not advantage America over China in the race for the 21st century, nor will they support workers and industries that rely on cheap, abundant, and reliable energy to thrive, both here in America and in the developing world.