UCL Institute for Innovation and Public Purpose


A bold mission-oriented approach explores the political economy of a Green New Deal

28 January 2020

IIPP Director Mariana Mazzucato and IIPP Head of Green Economy and Sustainable Growth Martha McPherson explore how we can enable sustainable and inclusive green growth in this new policy brief.

IIPP Brief 04 The Green New Deal: A bold mission-oriented approach

Climate change is (finally) being discussed as a serious global threat by international leaders and thinkers in a broad coalition including politicians, commercial actors, and financiers. Rising temperatures and increasingly intense weather events in the developed world (like the recent wildfires in Australia) are bringing climate change home to key economic actors and decision-makers. But fear about the impact of climate change alone doesn’t get us to the economic and behavioural transition required to mitigate it.

Instead, a green transition must be created by turning climate change into positive and socially equitable opportunities for investment and innovation, affecting production, distribution and consumption across the economy.

In December 2018, IIPP published its first policy brief from our Green Economy and Sustainable Growth area. In it, we outlined our manifesto for the characteristics of a ‘Green New Deal,' a term that, while not new, is now picking up traction. Europe is already making strides with their EU announcement.

The IIPP Green New Deal: A bold, mission-oriented approach offers the perfect framework for thinking about climate change, outlining these key areas of thought-leadership:

  • Firstly, IIPP recommends that we must acknowledge the green transition will take place in a complex global economy, the complexity of which has rarely been acknowledged in economic discussion about green shifts. This means that our current methods of monitoring and evaluation must be re-thought to take into account the role of characteristics such as feedback loops, path-dependency, non-linear dynamics (explored further in our policy report titled The economics of change: Policy appraisal for missions, market shaping and public purpose).
  • Secondly, it is also clear that green growth cannot take place in industry silos, but requires mission-oriented, economy-wide redirection. Work done by IIPP Director Mariana Mazzucato, IIPP Honorary Senior Research Associate Gregor Semieniuk and UCL Institute for Sustainable Resources Professor Jim Watson has explored the need for change to be cross-sectoral, harnessing supply and demand, innovation and procurement, and public and private actors. Designing for change should also be equitable, including trade unions and ‘brown industry’ workers – such as those in fossil fuel companies – at the decision-making table.
  • Thirdly, the ‘market-failure’ lens on climate change has led governments and businesses to see themselves as opponents in a zero-sum game. Rather than simply being seen as ‘fixing’ the mistakes of the market, IIPP advocates for the realisation of policy makers and the public sector as vital in creating policy which actively tilts the economy in a green direction. This has taken place in the early stages of the IT, biotech and nanotech industries, so why not at a cross-sectoral level in the green transition? Government instruments from procurement policy to prize schemes can be targeted towards innovative organisations willing to take on green investment, as Mazzucato and Carlota Perez have explored. Tax structures which reward long-run investments rather than quick trades are vital here.
  • Finally, and vitally, we know that the green transition can only be a success if it is equitable, bottom-up and inclusive. Movements are already growing, built out of people who want to create millions of green jobs, and who have the grassroots drive and multi-level buy-in to make it happen. In the US, current demands for a Green New Deal came out of a movement – the Sunrise Movement, harnessed by congresswoman Alexandria Ocasio-Cortez, who has campaigned extensively for ambitious, inclusive green growth. This inclusivity should not be seen from a defensive lens, but instead be about proactive stakeholder governance with labour unions civil society organisations and communities at the table before, during and after.

Read the full policy brief