After the devastation of WWII, Europe was in ruins. Millions had died, and thousands of cities had been levelled. Even the victors faced a bleak future. In the East, the Communist Iron Curtain had begun to descend and Soviet forces appeared poised to expand westward.
In this uncertain time, America provided Europe with an unprecedented aid package: the Marshall Plan. Named for the Secretary of State George Marshall, the four year plan invested over $15 billion (over $160 billion today) in rebuilding the continent and developing closer economic ties between Europe and America.
The Marshall Plan set Europe on the road to recovery and drove the creation of the North Atlantic Treaty Organisation (NATO). It supported greater integration within Europe and counteracted Soviet influence.
Now, with the world suffering the ravages of COVID-19, America must offer a similarly bold plan. A Green Marshall Plan could jump-start the global economy, mitigate climate change, and restore American prestige.
COVID-19 has inflicted tremendous harm on the world economy. Fitch Ratings projects a global contraction in 2020, and Wall Street fears that the economic damage may rival that of the Financial Crisis. America saw an unprecedented ten million jobless claims at the end of March, with expectations that unemployment will surge well above 10%.
The current Congressional stimulus package, while laudable, functions primarily as a short-term emergency measure. The world will ultimately defeat COVID-19, but without an effective post-crisis plan, recovery may be slow and painful.
A Green Marshall Plan could boost global growth by investing in the development and manufacture of green technologies both domestically and internationally.
In recent years, the green economy added jobs far faster than the economy overall. The renewables boom has created many of America’s new good-paying blue-collar jobs. By contrast, coal jobs have disappeared and oil and gas companies continue to consolidate their operations.
Supporting America’s dynamic green manufacturers would aid the recovery at home and increase American exports abroad. At present, a majority of the largest solar power, wind power, and electric vehicle manufactures are Chinese. American innovators could spur competition and efficiency gains in these critical industries.
Confronting Climate Change
While attention is rightly focused on COVID-19, climate change represents humanity’s greatest threat this century. Limiting global warming will require a global effort. That effort will almost certainly fail if the developing world pursues fossil fuel driven growth. America can create and deploy the green technologies that would empower developing nations to take a shortcut past this unsustainable growth model.
Regions like Sub-Saharan Africa are already seeing massive surges in energy demand due to rapid population growth and increasing living standards. Presently, supply is falling far short of that demand.
In India, where solar power is already cheaper than coal, a barrier to adoption remains initial installation costs. A Green Marshall Plan could provide critical financing to facilitate the roll-out of cheap renewable energy from American manufacturers.
Unfairly, many developing nations will be disproportionately impacted by climate change. Like the original Marshall Plan, a Green Marshall Plan would recognise that failed states pose a danger not only to their own citizens but also to America.
In its 2014 Quadrennial Defence Review, the Pentagon called climate change a “threat multiplier.” A Green Marshall Plan could fund resiliency and adaptation programs to allow nations to prepare for climate change before it inflicts chaos and carnage.
Following the chaos of WWII, the Marshall Plan helped establish the American-led postwar order. Today, the current administration has alienated our European allies and disparaged NATO. Around the world, confidence in American leadership has fallen dramatically. With America abdicating its postwar role, other nations Russia and China have sought to fill the vacuum.
Under Vladimir Putin, Russia has grown increasingly aggressive. The nation also has used its vast fossil fuel reserves to exert international influence. Already, 40% of the EU’s natural gas comes from Russia, with new pipelines planned. Now, Russia is laying claim to the resource rich Arctic in a bid for further energy dominance.
China has also sought to offer an alternative to American economic hegemony. China’s massive Belt & Road Initiative (BRI) is a $1 trillion infrastructure and development program that aims to reorient commercial activity across Eurasia. Similarly, China has expanded its economic influence in Africa and South America through major infrastructural investments.
The U.S. must match China’s ambition. A Green Marshall Plan would help nations modernise energy, transportation, and civil infrastructure while building closer ties with America. The plan could also improve relations with European allies, who are committed to global climate action.
After winning the fight against COVID-19, as after WWII, the challenge will quickly become rebuilding a peaceful and prosperous world. A Green New Deal would demonstrate U.S. investment in a sustainable future, and help America reclaim the mantle of Global Leadership.