It’s no surprise given Sanders love of political performing, a public salary that has sustained him for 30 years, and the popularity of the idea of a Green New Deal which began with AOC’s list of goals, that Sander’s would attempt to capitalize on the buzz word popularity to fuel his presidential campaign. Unlike AOC whose GND resolution is merely a goal list, Sander’s GND consists of goals, and a shopping list with a general idea for implementation. Finally something that demonstrates what they are trying to accomplish instead of the non-sense speculation from both sides that has validated something (AOC GND) that possessed no more substance than a campaign speech.
The first phase of the plan is to build the infrastructure and place it under the authority of the Power Marketing Administrations. The PMA’s were established to manage and sell hydroelectric power to utilities and presently still serve in that capacity. Once the infrastructure is built the second phase which will likely be included in the first phase, is to regulate fossil fuel power plants out of existence. Utility companies will be forced to purchase power from renewable sources, and most of those sources will be owned by the federal government. Build the infrastructure, including transmission lines, and storage, and sell the power to the utility companies who in turn sell the power to the consumers.
The obvious issue is you have to pass a bill that will not only push private ownership of power generation out of the market, in a market that is primarily privately owned, you will also be ending the sale of fossil fuels in the US for power generation. The basic formula for determining the feasibility of legislation and policy is this: the amount of organized money behind the interest verses the amount of organized money possessed by any interest harmed by the represented interest. There is almost no organized money behind the GND, and the money of the fossil fuel industry against the interest. There are some aspects of the idea that I do support and others which I foresee as detrimental without significantly contributing the purposes for which they are created. The main issue I have with Sanders GND is he cannot accomplish what he’s promising even if he is elected, and he knows it.
Sanders claims “electricity will be sold at it’s current rates to keep the cost of electricity down during this transition”. I’m not sure how this can be mandated since electricity is sold to the utility companies and the utility company sets the rates for consumers. These rates vary based on fuel costs to power plants, demand for energy, and weather which influences the cost to maintain transmission. If Sanders included a price freeze on what utilities could charge through some regulation during the transition, it could force utilities to become unprofitable depending maintenance costs, increases in fuel prices, extreme weather and natural disasters. In California, price controls imposed on utility providers not only led to Pacific Gas and Electric having to restructure under bankruptcy, it also caused shortages in the supply of energy. This may be what is intended if Sanders was elected and this unpassable idea was miraculously passed, as in the same section he is promoting assistance from the federal government for municipalities to create their own utilities.
Regulate private power producers out of business, then impose price controls to push private utilities out of business, which paves the way for state owned producers of energy, and publically owned distributors of energy.
Sanders plan includes the allocation of over 500 billion dollars to replace the entire grid, which may be a conservative estimate. (1) Generally, when estimates are given to replace the grid the cost includes power plants, transmission lines, and distribution assets. The smart grid Sanders refers to for 500 billion dollars most likely refers to transmission costs, as power plants will be replaced by renewables, and distribution assets will be integrated into energy storage systems. My question is how upgrading the grid affects the private utilities who own most of the grid? I presume this is an area where utilities will benefit from public spending to upgrade the grid and they will continue to own the areas they own once the upgrade has been completed. That’s if they can survive the price control period.
Sanders GND calls for spending over 2 trillion dollars for grants for low and moderate income families and small business to weatherize and retrofit their homes and businesses to maximize energy efficiency. First it seems like an unnecessary expenditure since the purpose of energy efficiency is to reduce carbon emissions. If all energy is going to come from renewable sources, then increasing energy efficiency has very little public benefit. The benefit is personal in saving money on energy consumption and doesn’t require the investment of 2 trillion dollars. It calls for a sliding grant system to accomplish these upgrades which will be achieved through regulation: all structures will meet certain requirements for energy efficiency, which will undoubtedly be a burden for some who may not qualify for grant money. In addition, grants designated for a purpose is really just the channeling of public funds into private profits, and in some instances it serves the public good, but in this instance, has no public benefit; because the benefit is to save energy, the primary purpose is to reduce emissions, and there are no emissions if we have achieved 100% renewable energy.
As I previously expressed, Sanders can include anything in his GND because even if elected, it will not pass congress, but in the same paragraph as weatherizing and retrofitting homes he is promising houses to as many as 20 million American’s.(2) Sanders plan calls for replacing all mobile homes with modular homes. The average size of a mobile home is 1500sqft conservatively. (3) The average cost per sqft of a modular home is $150.(4) The average cost of replacing each mobile home with a modular home is $225,000. Multiplied by 20 million is 4.5 trillion dollars, and Sanders has allocated only 2 trillion dollars for grants for retrofitting and weatherization, and to replace 20 million mobile homes, which does not include the cost of demolishing 20 million mobile homes and disposing of the debris. Again, you can claim the cost of promises you know you cannot keep is whatever you want it to be because the rubber will never meet the road.
Another trillion will be spent on grants towards mandating that all heating systems run on electricity. The grants are for low and moderate income families and businesses, while those not classified as such will pay out of pocket. Sanders who has made a living as the conveyor of empty rhetoric social justice rhetoric, will undoubtedly increase the burden on the lives of American’s who are the most disadvantaged. Nearly 40% of the population rent their housing. (5) Those who own these rental properties are unlikely to qualify for grants for weatherization, retrofitting, or ensuring their properties operate solely on electricity, and they are also unlikely to sacrifice the profit many rely on for income to bear the costs of these upgrades. Which means the costs these mandates impose will be passed on to the tenants, and many of these tenants already pay a substantial portion of their income for housing. It isn’t only furnaces that must be changed from gas to electric, but no appliances will be permitted to operate on natural gas. It is an area that seems to limit consumer choice and provides only the most minimal benefit. No gas stoves for cooking, or tank-less water heaters if space is limited.
Bernie has allocated over 2 trillion dollars to provide grants to purchase electric vehicles, and another 700 billion for a cash for clunkers program aimed at allowing people to trade their vehicles in for electric vehicles. How many cars does 2.7 trillion dollars buy? The average cost of an electric car is $55,000,(6) and there are 286 million registered cars in the United States, only a million of which are electric. Say the grants cover half of all the cars purchased and we have 5.4 billion dollars to purchase electric vehicles. This would lead to the conversion of 98 million cars presuming American’s have both the money and the will to make the purchases. A significant decrease in carbon emissions and a major step towards emissions free transportation.
There’s just one problem. In 2018, only 361,000 electric cars were sold in the United States. (8) Production capacity is geared towards anticipated sales. The United States sells roughly 17 million cars per year,(8) meaning even a market incentivized to produce more electric cars and more buyers, will still take a very long time to shift production towards electric vehicle manufacturing and demand for trade in and purchasing. It is a step in the right direction, but it will not be achieved by 2030 as Sander’s webpage implies. I say implies because Sanders doesn’t say he will decarbonize transportation by 2030, but does say transportation will be sustainable by 2030, which I have to presume means decarbonized to the point where emissions are so insignificant as to be sustainable. Basic arithmetic doesn’t support the claim.
The next aspect of Bernie’s sustainable transportation effort is spending 400 billion dollars to phase out all public transportation and school buses, and replace them with electric buses. This is a good application for this technology but I’m not sure where Sander’s team gets the 400 billion dollar price tag. An electric school bus cost’s about $200,000 (9) and there are roughly 480,000 school buses which is a 96 billion dollar price tag. There are 96,000 public transit buses(10) which cost roughly $750,000(11) which would be a total cost of about 73 billion dollars. The total cost should be $170 billion, and perhaps some additional funding to upgrade facilities to accommodate charging the buses. I’m not sure where the remaining 230 billion dollars will be spent in the interest of accomplishing this goal. Implementation will be constrained by production capacity.
The other major aspect of the transition of the transportation sector to renewable energy is shipping trucks. Sanders intends to spend 216 billion dollars to upgrade all 2 million diesel tractor trailers to electric tractor trailers.(12) 216 billion covers a little more than half the cost, and Sanders claims the program will be established to upgrade both large fleets and owner operators. There are a few issues with this upgrade. First, no one is mass producing these vehicles, they are all basically prototypes. The Tesla semi has an estimated range of 500 miles pulling 75,000lbs which is nearly double the Freightliner model which has a range of 300 miles. As the technology is today, you cannot replace diesel tractors with electric tractors. Even with the creation of charging stations every 250 miles, and batteries that are reported to charge to 80% in 90 minutes, it isn’t feasible, even if they prove reliable in application, due to the amount of trucks on the road, and the necessity for goods to cover great distances in short amounts of time. The transition of shipping vehicles to electric power is still a pretty far out.
Sanders intends to spend 600 billion on a high speed light rail system which is enough to build about 3000 miles of light rail. (13) Sanders also intends to invest 300 billion to bring public transportation to areas that do not presently have public transportation services, calling for public transportation to exist in rural communities. I understand the light rail has the potential to reduce carbon emissions as an alternative to flying, but spending 300 billion to expand public transit seems like a waste of money. If public transportation was a viable market service in many areas Sanders intends to expand the service into, it would likely already exist in these areas. Rural communities do not have public transportation because there is no need for it. I foresee buses driving routes day in and day out with no passengers. At least they’ll be electric buses as to not contribute to emissions, but although the start up money to begin service expansion will come from the federal government, the projects will become a drain on local municipalities who will have to maintain unprofitable public transportation services which have been forced into areas for which there is no need.
There is a slew of other components to Sander GND, most of which is general and much of it becomes vague after power generation and transportation. Money for research and development, general infrastructure upgrades, infrastructure upgrades aimed at preparing for climate change enhanced natural disasters, protecting against sea level rise, and a series of points rooted in social justice rhetoric aimed at pandering to his base and marginalized people. Social justice points that will accomplish very little in improving the lives of most people.
I think the approach for a renewable energy transition is correct. Utilities are natural monopolies, and because renewable energy transition is necessary to ensure the habitability of the planet I’m not altogether opposed to these monopolies being strangled by regulation that leads to energy production and distribution becoming publically owned, especially if the public is paying for the infrastructure for power generation and the upgrading of the grid. The grid itself is the utility companies primary claim to selling energy to the public, which is a necessity. I also don’t see a problem with spending money to incentivize consumers to purchase electric vehicles and thus incentivizing auto manufacturers to produce more electric vehicles.
I do have problem with strict regulations that mandate homeowners to upgrade their homes for energy efficiency and to operate purely on electricity. There is another point in Sanders GND that prohibits the export of fossil fuels. Each nation is going to transition as it is able to renewable energy. Because there is demand for fossil fuels and the United States is geared towards the extraction, refinement, and export of fossil fuels there is no reason why American companies shouldn’t have the opportunity to meet that demand. The demand exists and will be satisfied by someone, meaning the prohibition of fossil fuel exports doesn’t decrease emissions, it only prevents American companies from participating in the market.
As I have stated probably gratuitously at this point one problem I have is Sander’s writing these checks with his mouth that he can’t cash, and that he knows he cannot deliver. The second issue of contention is the sheer amount of money he intends to spend on aspect of his GND which serve little to no public benefit. For all the social justice related spending and promises there is a much more efficient way to create social justice for the amount of money he wants to spend. Sander GND is 16 trillion dollars. For 1.5 trillion dollars, which is substantially less than the cost of the sum of his ideas both within the GND and outside of his GND, he could provide substantial relief directly to the poor people of this country.
I classify poor according to wealth distribution, where anyone who has more debts than assets should be considered poor. I base this on the reasoning that wealth is surplus income, and thus, anyone whose expenses exceed their income which is evident by the fact they possess negative wealth, should be considered poor. This represents 40 percent of the population (14) who is without surplus income, roughly 100 million adults. 1.5 trillion dollars distributed directly to the poor could look like this: 600 billion to bottom 10% of the wealth distribution equals $24,000 per person. The next poorest 10% 400 billion dollars is $16,000 per person. The next poorest 10% 300 billion equals $12,000 per person, and the most well to do of the poor, 200 billion, equals $8000 per person. This is to say there is a much more efficient way to spend money in the interest of progress towards economic equality, and opportunity than high cost programs that only minimally improve the conditions of the most disadvantaged people in this country, and do little to nothing to empower them.
The criticism of direct distribution of funds to poor people would implications for inflation. However, such a poor stimulus would likely have far less impacts than many economist may claim, mainly, because much of this money would be spent repaying creditors and not affect the prices of products and services by inflating the money supply for those with the least access to money. Many would start businesses, and much of the money would be saved as poor people value the security of having money when they suddenly have the money to meet their expenses. Data on the subject would speak to the contrary that poor people do not save, but their lack of savings is more a product of a limited income where saving requires sacrifices that reduce their quality of life. Economists write that people need to skip their morning coffee and they could save 90 dollars a month, which turns into 1100 dollars per year, but skipping small expenditures like this greatly impacts people’s quality of life. When your life revolves around working for an income that barely provides basic necessities of life, a cup of coffee, a cigarette, an energy drink, or any small expenditure that changes your mood is a significant sacrifice.
While social justice spending may seem a deviation from the purpose of this article which is to examine the merits of Sanders GND, it speaks to a larger point against these grand ideas which are rooted in social justice. Mainly, these radical ideas intend to spend huge sums of money that do not enhance the liberty, opportunity, or improves the lives of people the ideas are intended to help.
There are a number of other elements of this plan but those that I identified are the most relevant and possess the most merit. The remaining while not completely unimportant, are efforts to pander to groups of marginal size that Sanders hopes will translate into enough votes to win the primary and general election. That’s what his GND is anyway, an effort to further the cause of his presidential ambitions. At the end of the day, Sanders is little more than a political performer who enjoys the opportunity to perform the same as musician, a comedian, or any other entertainer; the only difference is that Sander’s performance art is political, and this is true of most all politicians.
1: EUCI 3/28/2017 “Aging Electrical Grid Could Cost 5 Trillion to replace”. Energize Weekly. Article states 5 trillion to replace but the cost includes of power plants which Sanders plan calls for in a different area than the grid itself. The article states 10% of the grid replacement expenditure is transmission, and this is what I believe is intended by Sander’s plan to upgrade the grid. Transmission from distribution centers to homes, where the lines will be moved underground. The cost is about the same 500 billion. (https://www.euci.com/aging-electrical-grid-could-cost-5-trillion-to-replace/)
2: BBC 9/24/2013 “Why Do So Many American’s Live in Mobile Homes?”, Tom Geoghegan. “Estimated 20 million American’s live in mobile homes”. (https://www.bbc.com/news/magazine-24135022)
3: Mobile Home Sell 11/17/2017 “Mobile Home Sizes and How to Choose the Best One for Your Family”, by Bryceadmin. Single wide’s range in size from 600 square feet to 1300 square feet, double wide’s range from 2000 to 2500 square feet. The average of 1500 square feet is a conservative estimate for ease of math, as the average between 600 square feet and 2500 square feet is actually 1650 square feet. Additionally, there are triple wide mobile homes as large as 4500 square feet but were excluded from the average based on the presumed rarity of these structures. (https://www.mobilehomesell.com/mobile-home-sizes/)
4: Home Advisor “How Much Does it Cost to Build a Modular Home?”. “This breaks down to a price of $100 to $200 per sqft…” (https://www.homeadvisor.com/cost/architects-and-engineers/modular-home-prices/)
5: City Lab 8/8/2018 “Who Owns a Home in America, in 12 Charts”, by David Montgomery. The charts suggest that roughly 40% of people rent their housing, although I think the data may be somewhat misleading and under representing renters as a proportion of the adult population. The data is stated as people who live in homes which are owned verses homes that are rented. Most people who own homes are families that own homes which represents at least two adults, whereas people who are single tend to rent. Most homes owned represent two people living in a home owned which implies a greater degree of ownership as a proportion of the population, whereas people who rent are more likely to be single. Conversely, there are also a good portion of the adult population who rent and have roommates which may offset the misrepresentation but the point of this not is to highlight that the numbers are not completely representative of how many people own and how many people rent housing. (https://www.citylab.com/life/2018/08/who-rents-their-home-heres-what-the-data-says/566933/)
6: Quartz 8/27/2019 “The Average Electric Car in the US is Getting Cheaper”, by Michael J Coren. “Data analyzed by research house Cox Automotive show EV prices dropped from $64,300 to $55,600,” (https://qz.com/1695602/the-average-electric-vehicle-is-getting-cheaper-in-the-us/)
7: Consumer Reports 1/15/2019 “Electric Vehicle Sales Hit New Peak in 2018, but A lot of Room for Continued Growth”. (https://advocacy.consumerreports.org/research/electric-vehicle-sales-hit-new-peak-in-2018-but-a-lot-of-room-for-continued-growth/)
8: Marklines “USA Flash Report: Sales Volume” (https://www.marklines.com/en/statistics/flash_sales/salesfig_usa_2018)
9: Electrek 8/23/2019 “Electric V2G School Bus Pilots Grow, but Schools Asleep at the Wheel” by Charles Benoit. Price is listed as $215,000. (https://electrek.co/2019/08/23/electric-v2g-school-bus-pilots-grow/)
10: New Geography 12/19/2014 “School Buses, America’s Largest Transit System”, by Wendell Cox. Schools bus fleet 480,000. Transit bus fleet 96,000. (https://www.newgeography.com/content/004801-school-buses-americas-largest-transit-system)
11: Forbes 8/31/2018 “The US Just Spent 84M on Electric Buses”, by Sebastian Blanco. Transit Bus cost listed as $750,000. (https://www.forbes.com/sites/sebastianblanco/2018/08/31/84-million-electric-buses/#50b9a3fb5e40)
12: US Special Delivery 2/23/2017 “How Many Trucking Companies in the US”, by Michael. (https://www.usspecial.com/how-many-trucking-companies-in-the-usa/)
13: San Francisco Chronicle 2/17/2019 “The Train to Nowhere: Here’s How High Speed Rail Went Off the Rails”, by Racheal Swan and Kurtis Alexander. Cost is 77 billion from LA to San Francisco, a distance of roughly 400 miles which gives us about 3000 miles of high speed rail per Sander’s allocation of 600 billion dollars. (https://www.sfchronicle.com/politics/article/Train-to-nowhere-Here-s-how-high-speed-project-13621347.php)
14: Statista “Wealth Distribution in the United States 2016”. (https://www.statista.com/statistics/203961/wealth-distribution-for-the-us/) Bottom 40% .1% of wealth, bottom 30% -.3%.