1. Introduction

The IPCC reports that limiting global mean temperature increase to 1.5 C will require net CO2 emissions to fall by about 45% by 2030 and reach net zero emissions by 2050 [1]. Achieving this target within 10 years necessitates “rapid and far-reaching transitions in energy, land, urban and infrastructure and industrial systems …unprecedented in terms of scale” ( [1]:17). Attempting to meet this challenge within the US, the Green New Deal (GND) resolution introduced by US Congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey sparked a large global reaction [2]. Co-signed by 111 US Federal legislators, it was endorsed by the majority of the Democratic Party’s 2020 Presidential frontrunners. Its chief aims are to radically decarbonize the US economy while significantly reducing economic inequality, in such a way that these two achievements would be inextricably linked, and the rights of vulnerable communities protected and enhanced. In the words of the resolution, it aims “to achieve net-zero greenhouse gas emissions through a fair and just transition for all communities and workers” and “to create millions of good, high-wage jobs and ensure prosperity for all people of the United States” ( [2]:5).

The economic rationale of the GND is based on the adoption of Keynesian1 demand-side economics of the type utilized by President Franklin Delano Roosevelt (FDR) to revitalise the US economy during the Great Depression of the 1930s — a project known as the “New Deal” — and to finance the US’s Second World War (WW2) effort [3,4]. Broadly speaking, in this type of macroeconomic approach a government creates as much money as it needs to, to pay for its projects, and withdraws money from circulation via taxes, fees and the issuing of bonds in order to dampen inflation. The alternative approach, which we call “neoclassical” in this paper, is that governments must first raise money from taxes, fees and borrowing before they can spend it on their projects, i.e. that money originates outside of the government and the government must therefore get it from elsewhere before it can spend it [5,6]. This difference between these two approaches is further discussed in Section 2.