New York City And The Green New Deal
April 12, 2019 9:03 AM   Subscribe

“If passed, the bill would likely be the largest single legislative mandate to cut climate pollution by any city in the world. The legislation, by one estimate, would create a demand for more than 3,600 jobs construction jobs per year and another 4,400 jobs in maintenance, services and operations, fueled by the sheer magnitude of the investment required to meet the emissions goals. ” New York City Charges Ahead With Its Own Green New Deal (HuffPost) “This rally marked the launch of the Public Bank NYC coalition, more than 20 grassroots groups seeking a banking alternative. Because public banks are not run for the benefit of private shareholders, the banks can offer lower rates and fees, and profits can be reinvested into the community rather than trickling up to the already-wealthy.” Public Banking Can Fund The Zero-Carbon Economy (In These Times) Rally Photos “The group envisions a future where the industrial waterfront accommodates not only artisanal wine and candle shops, but the assembly of solar panels and wind turbines, which would provide thousands of good-paying green-collar jobs for local residents.” Industry City: A Green New Deal Vs. Gentrification in Sunset Park
posted by The Whelk (17 comments total) 23 users marked this as a favorite
This is really good. Go NYC!
posted by fshgrl at 10:25 AM on April 12, 2019 [2 favorites]

Not quite a New Green Deal, but Yet another state (Washington, this time) passed 100% clean energy legislation -- Hawaii, California, New Mexico suggest climate policies are popular at state level. (Megan Geuss for Ars Technica, April 12, 2019)
On Thursday, Washington state's House of Representatives passed a bill that will require 100 percent of the state's electricity generation to be carbon emissions-free by 2045.

A previous bill was passed in the state's Senate in early March, though the House amended its version, so the Senate will have to vote again on the bill's updated language, according to the Associated Press. However, the bill previously passed the Senate on a 28-19 vote, and it is expected to pass again. The legislation was part of a key campaign promise made by Governor Jay Inslee, who is expected to sign the resulting bill.
Washington follows Hawaii, California, and New Mexico (Ars Technica x2) in supporting rules that eliminate carbon emissions from the energy sector by 2045. Hawaii has historically had some of the highest electricity costs in the nation, because so much of its electricity was powered by imported petroleum. While California had long-since phased out coal when it passed its 100-percent carbon-free bill, its dependence on natural gas will be hard for the massive state to break.
In Midst Of An Oil Boom, New Mexico Sets Bold New Climate Goals (Nathan Rott for NPR, March 13, 2019)
New Mexico, a poor but fossil fuel-rich state, is aiming to make itself a national leader in the fight against climate change.

Lawmakers passed ambitious legislation this week that will reshape the state's energy sector by mandating that the state's publicly regulated utilities get all of their electricity from carbon-free sources like solar and wind by 2045.
The article also includes this quote:
This is a state that is not in climate denial. We are clear that we have basically a decade to begin to turn things around and New Mexico needs [to] and will do its part.

New Mexico Gov. Michelle Lujan Grisham
Yeah, I'm totally my-state proud.
posted by filthy light thief at 12:06 PM on April 12, 2019 [3 favorites]

While I'm skeptical of the results for environment, I do think Public Banking should really be the way forward for things. Imagine, instead of taxing everything, you gain from the interest into the people's interest, the dividends from that are dispersed (a la Alaska Oil Fund) and you can say you "cut taxes" so those goddamned Republicans can STFU already.
posted by symbioid at 1:36 PM on April 12, 2019 [5 favorites]

FYI Californians: please call your reps to support our bill for Public Banks. AB 857, the crucial local public banking bill, will soon come up for a vote in the Assembly’s Banking Committee and Local Government Committee. The deadline for public comment is Wednesday, April 17.

If you are interested in learning more about Public Banking and you're in California, message me!
posted by latkes at 1:40 PM on April 12, 2019 [3 favorites]

You can have a mutually owned bank but you can't have a mutually owned bank that invests in risk assets at a subsidy rate and throws off dividends and grows capital. The capital math won't work. Lending is already a commodity return business.
posted by JPD at 3:17 PM on April 12, 2019

Check out the Bank of North Dakota where it's been working for 100 years and it's profitable.
posted by latkes at 3:24 PM on April 12, 2019

That's not what they do.
posted by JPD at 3:51 PM on April 12, 2019

To be clear in no sense is the BND a "real" bank. Their deposits are all from the state so they have no costs servicing their customers. No branches, no ATMs anything like that. Then on the lending side they don't actually originate any loans, they just buy loans originated by banks in North Dakota, so their lending engine has no costs. And then on top of that 40 - 45% of their loan book is federally guaranteed. The rest of the book is small town Ag and SME lending.

It's a fine institution but in no way is it a model for public banking that disintermidiates JP Morgan Chase.
posted by JPD at 4:29 PM on April 12, 2019

Yeah that's exactly the model public bank advocates are working on: not retail banks, but institutional banks for cities, counties, states or other municipal bodies where they deposit all their own funds (also funds of local publicly held utilities, public education institutions, public transit agencies, etc). Then they use this money to make loans to a) small community banks that rely on larger banks for bigger loans or possibly depending on the specifics of the project to b) individuals and businesses and c) to public entities that borrow money for infrastructure projects. When the banks, individuals, businesses and public entities repay their loans, the Public Bank makes money.

Many left municipalities have voted to disinvest from private prisons and fossil fuels, but we can't meaningfully do so when we're paying interest to one of the small handful of mega-banks that are big enough to serve cities. Public Banks are the only alternative I know of.
posted by latkes at 5:41 PM on April 12, 2019 [2 favorites]

My point isn't that the deposit side doesn't work, it's the asset side that doesn't work. I.e. BND isn't actually underwriting loans, its buying a slice of low risk/guaranteed loans - not underwriting socially useful project finance. In no way are they creating loans that wouldn't have been made anyway.
posted by JPD at 6:03 AM on April 13, 2019

There’s hope for Boston too!

posted by natasha_k at 12:26 PM on April 13, 2019

Seems neat. I think they need to be a bit cautious not to overpromise and underdeliver, though. I'm a bit skeptical that a public bank could both intentionally pass up profitable lending opportunities (because the loans wouldn't meet their ethics criteria) but also generate "higher returns at lower fees" (so that would-be clients would give them deposits to lend off of) than a commercial bank run by venal profit maximizers.

It's not impossible (in fact it seems workable in theory, and I admit a certain fascination with and attraction to postal banks), but it's a hell of a needle to thread, and I think it's probably a mistake to downplay the challenge.

But it makes me wary when they say that "Our effort is rooted in racial justice and community organizing and base-building". Those are all nice things, but none of them are particularly related to… you know… banking. If they're going to beat the banks—some of the biggest corporate entities capitalism has produced, and staffed by at least that subsection of the best-and-brightest possessing the requisite level of moral flexibility (e.g. a penchant for one-bedroom NYC apartments with reasonable commutes)—on their own turf no less, I think perhaps their effort should be rooted in a deep understanding of finance.

In particular, if they're actually unlikely to pull off the win-win of ethical-only lending and higher-than-market returns, and the whole business model relies on getting political buy-in to shift deposits to them preferentially over other banks, they need to be upfront about that. And in particular, they need to acknowledge the huge risk that carries: one shift in the political winds (and the argument wouldn't be hard, if it's costing the public—or pensioners!—money because they can't deliver on the higher returns angle) and they could lose that preferential status, and the bank might collapse.

While the Bank of North Dakota is interesting, focusing on it ignores the elephant in the room: the largest state bank in the United States, the Puerto Rico Government Development Bank, which is currently in liquidation. Also, in the 1840s, a number of US states ended up in what were basically sovereign defaults (technically, debt repudiation) due to failing state banks—IIRC, the state banks had made well-meaning (and politically popular) loans to farmers and for infrastructure improvements and the like, but then the market had one of its decadal panics (1847 in particular), and the banks found themselves crunched. Since US states can't print currency, there's no easy out. That's one reason state banks haven't been very popular since.

I still find the concept intriguing, but I think history shows that state banks tend to be problematic if they're not well-insulated from political pressures to invest in unprofitable or risky projects. I'm not sure how you achieve that insulation while still accomplishing the goals they want to achieve with the bank.
posted by Kadin2048 at 10:25 PM on April 13, 2019 [1 favorite]

A message from the future
posted by The Whelk at 10:04 AM on April 17, 2019

It passed

“So yeah we FUCKING WON 45-2 absolute crush!!! #GreenNewDeal4NY #Pass1253 history made”
posted by The Whelk at 12:24 PM on April 18, 2019 [3 favorites]

In These Times series of articles, introduced by Winona LaDuke: How To Build the Zero-Carbon Economy: The Green New Deal sets an ambitious goal. Here’s how to get there.
posted by homunculus at 6:00 PM on April 26, 2019 [1 favorite]

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