On Thursday Democratic Representative Alexandria Ocasio-Cortez and Senator Ed Markey unveiled their highly anticipated Green New Deal. Conceived originally by the Sunrise Movement, this ambitious piece of legislation envisions a monumental shift in the U.S. economy to stave off the effects of climate change.
While some within the Democratic Party are already casting doubt on such widespread reform, this proposal gives progressives a real chance to combine their desire for financial reform and social justice with the need to address the Earth’s rapidly warming climate.
The Green New Deal calls for massively restructuring the economy to prioritize caring for the planet by investing in renewable power sources and energy efficiency. In just a few short decades, climate change will render our planet unrecognizable as extreme weather worsens, sea waters rise, food sources are threatened, and people migrate away from their ancestral lands. Poverty and racism force black and brown people—often women and children—to the frontlines of climate change. At the same time, wealthier and whiter populations can use their financial resources to buy greater distance between themselves and extreme weather.
To address these inequities and rising global temperatures,the Green New Deal must challenge the global capitalist activities that amplify racial and gender disparities in how people experience the effects of climate change. Black and brown people are already absorbing these effects by drinking poisoned water and breathing polluted air. Women are dying of miscarriages and children are at higher risk of disease and malnutrition.
Fortunately, the Democratic Party is poised to advance strong financial regulations and consumer protections in the coming years. With the 2020 campaign already underway, presidential contenders like Senators Elizabeth Warren and Sherrod Brown are likely put financial reforms front and center in their campaigns. And the newly empowered House Democrats won’t be far behind. TheHouse Committee on Financial Servicesis set to dramatically pivot its attention to these critical issues under Representative Maxine Waterswhose leadership has been bolstered by the appointments of newly elected progressive Representatives Alexandria Ocasio-Cortez and Rashida Tlaib.
Given the massive scale of the problem, Americans need leaders who are committed to advancing this ambitious and expansive agenda. As Ocasio-Cortez’s campaign platform affirmed, “It’s time to shift course and implement a Green New Deal—a transformation that implements structural changes to our political and financial systems in order to alter the trajectory of our environment.”
This is exactly where financial reforms can come in. Over the last several decades, wealthy corporations have emerged that use debt to finance global investments in land and property: a real-estate company can convert rental income from their properties, sufficient to cover interest payments on their original loans, into financing for other investments. These global corporate landlords often make sure that black and brown communities bear the heaviest burdens of climate change.
Private-equity firms like Blackstone Group LP effortlessly restructure debt into assets that benefit their own shareholders. One of the world’s largest property owners, with 26 percent of its $457 billion portfolio in real estate, Blackstone has spent millions of dollars buying rental units in U.S. cities like Atlanta, Los Angeles, Las Vegas, and New York. These cities have large populations of color, and are also prone to extreme weather from severe storms, wildfires, and droughts. Invitation Homes, a Blackstone subsidiary, owns 82,000 single-family homes nationwide. During the foreclosure crisis of the Great Recession, the firm converted families’ misfortunes into lucrative real estate investments by scooping up foreclosed homes.
Once these global corporate landlords have acquired properties, they often structure and reinforce inequality via residential segregation. All around the world, they buy cheap land and properties disproportionately located in communities of color to rent for profit, siphoning their tenants’ money and guaranteeing unstable occupancy. These landlords charge higher rents and deliver eviction notices at higher rates than their counterparts, displacing those tenants that shrink their profit margins.
Moreover, these properties may be at greater risk of flooding, poor heating and cooling, and poor construction susceptible to weather-related damage. And high rents, coupled with residential segregation, mean that residents often can’t afford to move elsewhere even as their financial resources are filling the coffers of global corporate landlords. These corporate landlords ensure thatthe people who can least afford displacement end up buffer the rest of the world from the effects of climate change.
The House Financial Services Committee canchallenge this global trend by crafting strong regulations that disrupt the global restructuring of capital, retain wealth within communities, and protect land and property from being mined for profit—measures that are well-aligned with the objectives of the Green New Deal.
These are not radical, new ideas. Until its repeal in 1999, the Glass-Steagall Act restrained banks from becoming too big to fail and from participating in questionable activities like financing global corporate landlords. And beyond new regulations, taking back the Consumer Financial Protection Bureau that has been captured by the Trump administration can help protect consumers against subprime lenders and tax incentives that allow corporations to devalue land and property in exchange for profit.
Support for strong regulations has long been undermined by false narratives that imply tackling climate change is impossible, corporations cannot be culled, and the financial system cannot be regulated. This is not true. Americans need a movement like the Green New Deal that matches the size of the climate change crisis with the strong financial system reforms that can help stave off a planetary catastrophe.
This article is published in partnership with the Scholars Strategy Network.