The Impact of Green New Deals on Latin America – FPIF – Foreign Policy In Focus

In response to an accelerating climate crisis, activists and policymakers have in recent years urged governments to move away from fossil fuels and at the same time create new clean energy jobs, particularly for workers in the oil, gas, and coal sectors. These proposals fall loosely in the category of Green New Deals, which references the government stimulus packages launched by Franklin Delano Roosevelt to rescue the U.S. economy during the Great Depression of the 1930s. While some of these Green New Deals are market-driven reform packages with an emphasis on decarbonization, others propose more significant economic and social transformations.

The European Green Deal, initiated at the end of 2019, aims to combine a transition to clean energy with an emphasis on economic equity. A similar initiative in the United States, associated most visibly with a resolution introduced at the beginning of 2019 by Rep. Alexandria Ocasio-Cortez (D-NY) in the House and Sen. Ed Markey (D-MA) in the Senate, has inspired some elements of the Biden administrations economic stimulus bills as well as some stand-alone legislation that has not yet passed Congress. In 2020, the South Korean government made a Green New Deal part of its official policy with an emphasis on boosting renewable energy and creating jobs in that sector.

The Global South is both present and absent from these initiatives. It is absent in that mainstream Green New Deals focus on the reactivation of economic growth in their own countries or regions, and the global South is scarcely mentioned. And yet the Global South is very much present as well, for many of the materials required in clean energy infrastructure come from this vast region. In other words, Green New Deals depend on a resource flow from lower-income countries without taking responsibility for the possible impacts that may have on local or transnational ecosystems and societies.

Latin America plays a disproportionate role in this resource flow. For centuries, the continent submitted to the extensive extraction of precious metals and other valuable resources by colonial powers, what Uruguayan writer Eduardo Galeano described as the open veins of Latin America.

That era is not over. Since 1970, according to a 2020 article in the journal Dialogos, the extraction of resources from Latin America has increased fourfold, greater than the global average. A significant portion of these resources leaves the continent as exports.

A transition away from fossil fuels currently requires a vast amount of minerals to build the infrastructure of renewable energy. According to the World Bank, the extraction and refining of minerals such as lithium, graphite, and cobalt will increase by 500 percent by 2050. More than 50 percent of the worlds supply of lithium, a key component in solar panels and the batteries in electric cars, can be found in the Lithium Triangle, a vast area of salt flats spanning Argentina, Bolivia, and Chile. Meanwhile, nearly 40 percent of the worlds copper, another key component in sustainable energy infrastructure, can be found in Peru and Chile.

The majority of Latin American economies import at a higher price than they export, points out Miriam Lang of the Universidad Andina Simon Bolivar in Ecuador in a recent workshop cosponsored by the Ecosocial Pact of the South and Global Just Transition. In other words, they are decapitalizing in material terms without generating positive economic returns. This reinforces the idea of an unequal ecological and economic exchange.

The increase in extraction of natural resources from Latin Americafossil fuels but also minerals like lithium and raw materials like balsa woodhas a direct and negative impact on the communities where the extraction takes place. This energy transition is being promoted to avoid the natural disaster of climate change, notes Esperanza Martinez, a biologist and lawyer with Ecological Action in Ecuador. But in the Global South we see that these actions have nothing to do with natural disasters. These are manmade disasters.

The extraction, for instance, has taken a huge toll on the natural world. Biodiversity has declined worldwide since 1970 at a rate of 68 percent, according to the World Wildlife Fund. But the figure for Latin America and the Caribbean is an astonishing 94 percent.

Enrique Viale, the president of the Argentine Association of Environmental Lawyers, draws a parallel to the development debates of the 1970s when the countries of Latin America were pushed toward making considerable sacrifices in the name of economic growth. Today, in the name of the energy transition, everything is approved, he says. Were going to build new nuclear plants: because of the energy transition. Were going to do offshore oil and gas drilling: in the name of the energy transition. All for the energy transition of the Global North, we are going to sacrifice our territory yet again. Before it was in the name of development, and now its in the name of the energy transition.

Meanwhile in the Global North, the Green New Deals recognize the urgency of climate change and the necessity of combining economic justice with decarbonization. But they do not propose complete economic transformation. I would call the European Green Deal a passive revolution, observes Ulrich Brand, head of the Research Network Latin America at the University of Vienna. Its an attempt by elites to change the resource base of the economy, the energy base, without changing the power structure or the dominant logic of capitalist growth and accumulation.

As it stands, the transitions envisioned by the Green New Deals run the risk of simply shifting the burdens of tackling climate change from vulnerable communities in the north to those in the south. We cant just shift zones of sacrifice around, notes Rajiv Sicora, senior policy advisor for U.S. Rep. Jamaal Bowman (D-NY). To eliminate them altogether, well need global cooperation on genuinely democratic models of development.

The U.S. Green New Deal

The Green New Deal in the United States is largely aspirational. It has appeared in the form of a nonbinding resolution in Congress but not as a piece of legislation. It has influenced parts of the Biden administrations climate policies, but the most significant portions of that agenda have not passed Congress. And it serves as a rallying cry for U.S. progressivesand a lightning rod of criticism from the right wingthough it translates into very different programs depending on which activists you consult.

There are some ways that the Green New Deal has already made a tangible contribution, Rajiv Sicora reports. The Biden administration has set some ambitious goals, though theyre not in line with a U.S. fair-share approach to global emissions nor do they deal with the climate debt to the Global South. The administration, for instance is trying to get to fully renewable electricity generation by 2035. Another direct influence is the Civilian Climate Corps, which is modeled on the Civilian Conservation Corps of the New Deal that put unemployed young men during the Depression to work building parks, planting trees, and doing ecological restoration projects. Alexandria Ocasio-Cortez played a central role in defining what that proposal would look like if it were implemented.

The administration, he continues, has also placed a genuine emphasis on environmental justice, at least within borders of the United States. It has set a goal of distributing at least 40 percent of the benefits of climate investments to historically marginalized communities, those who have borne the brunt of the impacts of extraction and the combustion of fossil fuel, and the other harms and injustices of our economy. This Justice40 initiative, he adds, synthesizes decades of work by the environmental justice movement led by Black, Brown, and Indigenous communities in the United States.

Although the administration has yet to push its major economic bill, Build Back Better, through Congress, it did manage to pass an infrastructure bill last year. Theyre trying to claim that this infrastructure bill is climate-friendly, Sicora adds. But it invests more in car and highway infrastructure than in public transit, which is outrageous.

He contrasts the administrations approach with the more transformative Green New Deal, which uses an emergency framework and stresses the importance of improving the material lives of everyday people and the need to fundamentally restructure our economy. The Green New Deal envisions creating millions of unionized jobs. To do this, we have to mobilize a holistic government response over the next decade.

The differences between the more transformative Green New Deal and the Biden administration begin with the scale of funds. Bernie Sanders, when he ran for president in 2020, put out a detailed and visionary Green New Deal platform that called for investing $16 trillion over 10 years, Sicora continues. President Biden in contrast started out with a $2 trillion proposal that was part of his signature legislation, Build Back Better. The climate spending in that bill has been reduced to $550 billion, and still the Democratic Party has not managed to get Build Back Better passed in Congress. And the leadership of the Democratic Party has not had a strategy to mobilize people at a grassroots level to push for this, or to overcome the resistance of corporate-backed Senators, he adds.

Another major difference involves the drivers of the transition. For the Biden administration, the private sector is the leading edge of the efforts to scale up wind and solar. For advocates of a Green New Deal, the public sector should be the driver of this transition, Sicora explains. The public sector can do it faster, and ensure high standards and democratic participation. We can develop the economic planning capacity to phase down fossil fuels at the same time as we scale up renewables.

This emphasis on the public sector extends to three bills associated with the Green New Deal: on public housing, on cities, and on public schools. Sicora has worked closely on the schools bill. Every school in this country should be safe, comfortable, and zero-carbon, he says. But right now, school facilities across the country are literally falling apart, and health harms and climate disasters are an everyday threat to Black, Brown, and low-income students. Public schools, as Rep. Bowman says, are the heartbeat of our communities. Theyve suffered from neglect and disinvestment for decades, but its hard to think of a single institution that touches the lives of more people.

The three bills also illustrate the organizing strategy of Green New Deal advocates. Were also talking about what coalitions we need to pull together to win radical change, he concludes. We need teachers fighting alongside workers who would benefit from retrofitting schools and alongside student climate activists. Even if these bills arent close to passage right now, we can use them as powerful organizing tools, and weve seen those coalitions start to come together to push for related funding in the Build Back Better package.

The European Green Deal

The European Green Deal, first introduced in December 2019, promises economic growth decoupled from resource use and envisions increasing the share of renewables to 40 percent of overall energy use, renovating 35 million buildings to make them more energy efficient while creating 160,000 new Green jobs in the construction sector, and boosting organic farming as part of a Farm to Fork program that aims to make agricultural production, distribution, and consumption more sustainable.

The EU has pledged to spend as much as 30 percent of its long-term budget, which would amount to around $700 billion, to reduce carbon emissions by 2030. As part of the plan, a Carbon Border Adjustment Mechanism would effectively apply a tariff on carbon-intensive goods coming into the EU. A Just Transition Mechanism of around $85 billion over six years would help poorer regions of the bloc meet the plans goals. Within this mechanism, a public sector loan facility would combine grants from the EU budget with financing from the European Investment Bank.

I see the Green Deal in continuity with the Green economy formulated after the financial crisis of 2008-9, observes Ulrich Brand. It is explicitly a growth strategy to transform the EU into a just and wealthy society with a modern, resource-efficient competitive economy. It is a growth strategy designed to give Europe a competitive edge.

This is not, Brand is quick to add, a complete transformation of the European economy. It is an attempt to transform the energy basis of the economy but not its political economy, he explains. For instance, the plan is to have a certain number of electric cars by 2030, which means its not about restructuring the whole transportation system. Also, the success of the plan is predicated on large-scale resource extraction from the Global South.

More progressive versions of the Green Deal exist in Europe that differ from the official policy in four important respects. First, more progressive versions put the state, rather than private capital, at the center of restructuring the economy. Second, in place of a paternalistic approach, the more progressive versions insist on a just transition in which workers secure good jobs, particularly those in high-carbon certain industries that are being restructured or phased out. Third, not only should the economy be electrified but also certain branches such as automobiles, air transport and the chemical sector should be reduced and reorganized. Although there is some consensus around such reorganization, Brand notes, there is more disagreement about challenging the growth imperative of capitalist economics.

On this last point, we need to rethink our wellbeing, he suggests. Our status shouldnt be about having a larger car or flying across the world. In a care economy, we need to care for ourselves, for our community, and for nature.

He points to one additional challenge related to the state. In the end, most Green New Deals are reformist, he notes. They think that the state can make a difference, and they dont reflect the fact that the state is a problem. We need to rethink the very structures of the state. Over the last two months, I went through the Green New Deal literature and I was surprised that there is no reflection on what the state means and how it should be changed. This, too, is a blind spot.

The Case of Balsa Wood in Ecuador

Ecuador is the worlds largest exporter of balsa wood. In 2020, the country exported over $400 million of the timber, 85 percent of it to China. The wood, because it is light and flexible but also hard, is particularly well-suited for the construction of wind turbine blades. China is a major consumer of wind energy and exporter of wind technology.

As Esperanza Martinez explains, however, this key component in the clean energy thats central to Green New Deals is having anything but a clean impact on communities and the biodiversity of the Amazon in Ecuador.

When we talk about oil and gas, you can imagine the negative impacts, like an oil spill or a fire, she says. When you think about balsa wood, its green. Its used for forest recovery. But no, balsa projects also have negative impacts. Wild balsa is no longer available, even in protected areas like the Yasuni National Park. Harvesters have gone into territories where voluntarily Isolated populations are living to get wild balsa.

The removal of balsa, meanwhile, has led to deforestation as part of whats been called balsa fever. The harvesting has caused landslides, Martinez reports, and balsa plantations have led to the displacement of people, particularly around the port city of Esmeraldas where many Afro-Ecuadorans live.

The balsa boom coincided with the COVID pandemic. People didnt have income, particularly people working in services and tourism, Martinez explains. People were left with no money and suddenly theres this opportunity of balsa. People in the countryside get seeds and the promise of payment three or four years later. It sounds like a good deal. But the problem is that it happened so quickly. There was too much production of balsa wood in 2020 and the prices went down. And this had a major effect on peasants whod changed the management of their land to grow the balsa.

The extraction of balsa wood from Ecuador resembles in many ways the extraction of fossil fuels. When businesses come in a violent way, they tear people away from their traditional ways of life, Martinez continues. This leads to a lot of disorder, robbery, violence. They just cut down forests and theres no discussion of rights, biodiversity, or food sovereignty. And its happening in a country that has recognized the rights of nature! In 2008, Ecuador became the first country in the world to enshrine the rights of nature in a constitution.

As an oil-producing country, Ecuador faces a particular challenge in transitioning away from fossil fuels. I remember when we said that we want to get out of oil production, Martinez remembers. They said it was impossible, it was too unpopular a position in the north. But we saw how it was costing lives in the south because of wars, cancer, and other environmental impacts. Now, we see that the climate change agenda is only focused on decarbonization. Yes, we have to close the oil wells. But we cant only talk about carbon. We also have talk about land appropriation. We have to talk about consumption. And we have to talk about our autonomy.

The Case of Lithium in Argentina

Lithium, like balsa wood, is a key component in clean energy alternatives. Lithium-ion batteries, for instance, are an essential part of electric cars. Like most minerals and metals, this white gold is in limited supply. According to one calculation, the global supply of lithium would run out in five years if the current number of conventional cars produced every year were replaced by electric ones.

The Lithium Triangle in the northern part of Argentina, in an area shared with Chile and Bolivia, is the new El Dorado, reports Enrique Viale. Its where we are promised enormous wealth. And its also where the new conquistadors can gain power.

Viale is experiencing a powerful sense of dj vu. In the past, Argentinians were promised that petroleum or copper would be the countrys savior. Now its lithium thats supposed to save us, he says. Everything is justified in the name of lithium. And it just so happens that the lithium is located where indigenous communities have lived a long time. All of their rights are being sacrificed on the altar of this idea of an energy transition that requires lithium. And again we environmentalists are the bad guys who want to stop progress in the name of energy transition.

The environment, too, bears the brunt of lithium mining. The salt flats of the Lithium Triangle are some of the driest areas on earth. Yet the extraction of lithium from beneath this desert requires a lot of water: 500,000 gallons per ton of lithium. At the Salar de Jujuy facility in Argentina, for instance, the pumps pull 2 million gallons per day of groundwaterin a place that receives less than four inches of water a year.

The lithium mining takes place in Argentinas liberalized economy. When mining came in the 1990s, during the era of the Washington consensus, everything was written with the same pencil, Viale remembers. There are low taxes. The state was even prohibited from participating in mining operations. Not even the progressive administration of Alberto Fernandez has dared to change that.

As a result, he concludes, we are living with a certain type of neo-neo-extractivism. Instead of the commodities boom of previous period, its now all done in name of energy transition. We need to challenge this corporate model. We dont want to be the ones who sacrifice everything so that everyone in the United States can have a Tesla.

Climate Justice

Green New Deals put climate justice at the heart of their programs, for instance in targeting funds at communities that have historically suffered negative environmental impacts But too often climate justice stops at the waters edge. In its eagerness to make a transition to clean energy, the Global North rarely considers the impact of this transition on the Global South.

The problems in Latin America are totally different from those in the North, explains Enrique Viale. When we see debates in the Global North, they only talk about decarbonization, as if that were the only issue, as if that were sufficient. They forget about all the local impacts of these development models. This turns our countries into colonies. We need new narratives in the name of energy transition.

A major issue that often gets lost in the climate discussions between north and south at the governmental level is debt. Latin America has a financial debt of dubious origins, Viale continues. The Global South pays more than $2 trillion a year just in interest on the debt. We have a really big IMF debt here in Argentina that the previous neoliberal government left and that we can never pay. It generates pressure on our territory. Because we need more money, the government says that we need more mining and more oil to get dollars to pay that debt.

Then theres the climate debt: the huge gap in historic emissions between the Global South and the Global North. Europe and North America, for instance, are responsible for over 60 percent of the carbon emissions since 1750. Contrast that with the 3 percent of emissions for which South America is responsible. We need to discuss the climate debt between north and south, which is so large, Viale concludes. We need to put the ecological debt and the financial debt on the table and think about who owes whom. We need to find a real way to pay off the ecological debt. And we have to find a way out of this dead end of Latin America being an exporter of nature.

Ulli Brand agrees. Within the progressive versions of the Green New Deal, there is discussion about historic responsibilities and colonial legacy, he points out. The Green Climate Fund should get more money, there should be greater redistribution of resources, and so on. But there is no direct dialogue with the Global South, no reflection of the experiences that Esperanza and Enrique are referring to. This is a new objectification where the south is a poor object that is exploited. We need to make the stories of struggle and success in the Global South more visible in the Global North. Our challenge is to make a story out of the numbersto show that if you use public transport and not a car or dont eat industrial food, this has implications on material extraction from the Global South.

One effort to apply principles of climate justice to the global economy has been the application of environmental and social standards throughout the supply chain. The UN Global Compact, a a voluntary agreement by global businesses, has promoted various practices to ensure greater sustainability in supply chains. Beginning in 2023, according to a new law, German businesses with more than 3,000 employees will be required to eliminate or minimize human rights violations and environmental risks in their supply chains.

However, when investors dont abide by these principles, there isnt an independent capacity to control their actions, Esperanza Martinez points out. She brings up the case of a contract between the Ecuadoran government and a Chinese company to drill for oil under the Yasuni National Park, a secret deal that was eventually cancelled, only to be followed by another huge deal with Chinese companies in a remote section of the Amazon rainforest. The investment contracts that the government accepts always work for the investors, not on behalf of human rights or the rights of nature, she continues. We need an agenda that reinforces those obligations by independently monitoring investments. The investments should not be done without full verification that the businesses are meeting their obligations concerning human rights and the rights of nature.

The United States, meanwhile, has been slower to embrace principles of climate justice. From a movement and organizing perspective, weve come a long way, Rajiv Sicora reports. There are U.S.-based groups participating heavily in growing global coalitions. They are organizing resistance to calls for increased lithium extraction in Nevada and California where you have the same problem of violating the rights of indigenous people and local communities.

This organizing is not, for the most part, reflected in the work of Congress where if you try to talk about supply chain justice and extractivism, you mostly get blank stares, he continues. One promising thing the Biden administration is doing, for example, is promoting more recycling of materials in batteries. But its not looking at ways to reduce demand for the materials in the first place by changing how we consume and how our economies are structured.

When Congress looks at global supply chains, it focuses almost exclusively on protecting U.S. production and consumption from disruptions. The way were thinking about supply chains is to secure access to inputs and materials or onshoring production to the United States, without a real strategy for supporting equitable, climate-friendly development around the world, he continues, pointing to a new bill that ties investments in innovation to the larger geopolitical competition with China.

There are opportunities for the Left to shift the narrative and contest how this is implemented, he concludes, but the bill is a dangerous mishmash of ambitious investments in science and innovation, indiscriminate subsidies for tech companies, and an aggressive approach to countering China in the global South. Parts of the bill are premised on the fantasy that well force other countries to choose us rather than China for energy and development assistance. Theres military support for Latin American countries and energy-related assistance to other countries, including to expand fossil fuels, and the greenest parts of the bill are all within a Green nationalism framework.

Paths Forward

The Ecosocial Pact of the South, which was formed in the first months of the pandemic in 2020, aims to chart an energy transition from below by amplifying and synthesizing local approaches to community control, food sovereignty, and the like. The Ecosocial Pact of the South has come out of the Global South, and it is for the Global South, says Enrique Viale.

In the short time that the Pact has been working, weve been trying to talk about different, specific alternatives, reports Esperanza Martinez. Weve had meetings, were working with local governments and existing networks to articulate these alternatives, not just from top to bottom, but from bottom to top. Its a big mistake to say that there is just one big economic variable that needs to be resolved for the future. In a diverse world, single recipes dont work. Instead, we have principles and values and were putting as many restrictions as possible on things coming from outside to protect what is valuable here.

Enrique Viale agrees: What were trying to talk about are horizontal ideas that have been forged over the last few decades: the rights of nature, buen vivir, redistributive justice, just transitions, autonomy, post-extractivism, ecofeminism, food sovereignty.

Another future trajectory involves challenging the very growth imperative of the global economy. Degrowth is not about shrinking the GDP, Ulrich Brand points out. A shrinking GDP is a crisis, as our comrades from Latin America knowand its usually a crisis for the weaker people, not the elite. Instead, degrowth is a way of overcoming the constant need to accumulate capital through mining, for instance. You can find this growth imperative even in well-intentioned Green New Deal debates where it appears as leftist Keynesianism.

One way into this discussion of degrowth is to focus on the definition of a good life. In the United States, were very far behind LA movements, but theres an emerging idea that if our basic needs are met, if we have free time to spend with friends and loved ones, if we have access to free arts and public services, then we will also be less likely to consume in a materially intensive way, notes Rajiv Sicora.

This focus on what Latin Americans call buen vivir, or the good life, has the potential to be maximally inclusive. After all, as Ulrich Brand points out, we cant expect most people to be internationalists. The radical transformation has to be a transformation of everyday life: what I eat, how I commute. Policymaking, law making, investment decisions: these have to be international and transformative, but we cant expect ordinary people to be transformative or think about the global scale in their everyday life.

Even in the United States, a core group of progressive legislators Alexandria Ocasio-Cortez, Ilhan Omar, Cori Bush, Jamaal Bowman, Ayanna Pressley, Rashida Tlaibhas been pushing for substantially different ways to approach the economy. Thanks in part to their efforts, the Build Back Better bill combined investments in clean energy with those into the care economy such as paid family medical leave and an expansion of child care. Even though the media portrayed Build Back Better as a grab bag of Democratic proposals, theres a powerful logic to tying climate action and the care economy together, Rajiv Sicora explains. Care jobs are already relatively low-carbonexactly the kind of sector we should be expanding and strengthening as part of a Green New Deal. And nurses, teachers, and homecare workers are all routinely dealing with climate impacts in their jobs.

Were also working on a bill to expand energy storage technology, which is an opportunity to address supply chain justice, he continues. And were exploring other ideas related to expanding and democratizing public ownership. As an inside-outside movement, we are basically figuring out for the first time how to try to transform and democratize the U.S. state and internationalize the struggle. Were learning as we go. And I think we should formally collaborate across borders, for instance, on how to transform the trade and investment regime. Legislative staffers like myself can work with counterparts in other countries to put forward alternative bilateral and multilateral frameworks. We need to trade lessons and have each others back as we work in solidarity.

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The Impact of Green New Deals on Latin America - FPIF - Foreign Policy In Focus