• Sebastián Plubins

The Green New Deal in the spotlight.


I can still remember my first day of work in Chile.


It was the 11th of September of 2001 and when I arrived at the office the first airplane had just crashed into the north tower of the World Trade Center in New York. Like millions of people around the world on that fateful Tuesday morning, I watched the events unfold in real time, shocked and amazed as images of the burning skyscraper filled every channel on TV. When the second plane hit the south tower my initial confusion and disbelief led to clarity when one name popped into my head: “Osama Bin Laden.”


Several weeks before, I had finished reading The Lexus and the Olive Tree: Understanding Globalization by Thomas Friedman. On this book, published in 1999, the author submits that the world faces two major struggles: the drive for prosperity and development, symbolized by the Lexus (Toyota’s luxury car division), and the desire to retain identity and traditions, symbolized by the olive tree.


He also mentioned Osama Bin Laden: “... a Saudi millionaire with his own global network, declared war on the United States in the late 1990s, and the US Air Force had to launch a cruise missile attack on him as though he were another nation-state. We fired cruise missiles at an individual!”, Friedman wrote 3 years before the name “Osama” would become known all around the globe.


I had recently completed my MBA in international studies and this book was just what I needed to understand the dynamics that were shaping globalization at the time. Since then, I have read almost all of Thomas Friedman’s books and they have made a profound impact on me.


The first time I heard about the Green New Deal was in Friedman’s book titled “Hot, Flat, and Crowded”. It was a fascinating read in which the author pointed out the benefits of globalization, but also warned about some of its side effects, like overconsumption and overpopulation, and how they were accelerating climate change, an issue that would shape geopolitics and, subsequently, the world.


This remarkable book was released after the 2008 financial and economic crisis and in it Friedman put forward an idea that has captured my mind ever since: The Green New Deal.

Friedman’s Green New Deal was a big undertaking like the Apollo Program, Marshall Plan or Civil Rights Movement. In it, he described the need for a profound change of mentality in which we should embrace a new green economy based on renewable energies and clean technologies rather than carbon & fossil fuels.


He also wrote about the geopolitical benefits the USA, Europe, and countries alike would have if they were to embrace this policy and cut their dependency on the Middle East.

Back then, many countries were going through deep financial, economic and political troubles. Populist parties were beginning to emerge and Friedman proposed that the government should support big investments in green technologies in order to create jobs and prepare our society and economies for the future, acknowledging that climate change is a timebomb that must be addressed sooner rather than later.

"Innovation, creativity and new technologies can help us make the big transition towards the decarbonization of our economies."

Friedman’s views were extremely appealing to me. He talked about how we can use capitalism for good and in our favor, and how the use of innovation, creativity and new technologies can help us make the big transition towards the decarbonization of our economies.


In regards to his political beliefs, Friedman views himself as leaning towards the left on some issues like health, education and universal basic income policies for the unprivileged, and towards the right on others like the reduction of income and corporate taxes.

He said that a Carbon Tax, Financial Speculation tax and Weapons tax should be implemented to offset the reduction of income and corporate taxes. This is an amazing suggestion, and one which I fully agree with!


Unfortunately the Green New Deal entered a long winter season for many years, but -luckily- it's back on the agenda and making headlines thanks to Alexandria Ocasio-Cortez, the youngest congresswoman in America’s history.


She is outspoken, brave and full of energy and enthusiasm. She’s an activist for social issues and she appeals to youngsters. She is a breath of fresh air to the US Democratic Party and I like her a lot!

Alexandria Ocasio-Cortez

She is resurrecting the Green New Deal to the political agenda with nuance. She wants to finance these policies by increasing income tax to the wealthiest Americans. She proposed a 70% levy to annual income beyond $10m, that would collect nearly $70 billion annually. You can read the full bill on the following link: Plan for a Green New Deal.


At the same time, Elizabeth Warren, a democratic senator from Massachusetts, has released her own big idea — a tax of 2% a year on all wealth above $50 million, rising to 3% for those fortunes of more than $1 billion.


The proposal, which would affect around 75,000 of America's wealthiest people, also comes with a set of measures designed to reduce avoidance and evasion. Warren’s plan would raise about $275 billion a year, almost four times as much as the most optimistic estimates for Ocasio-Cortez’s income tax.


A wealth tax will probably seem fairer to many people than income tax. Instead of taxing only future income, they should tax the accumulated income of the past — in other words, the existing rich can’t avoid the tax by being grandfathered in.


Personally, I don't agree with Ocasio-Cortez and Warren’s proposals on regards to increasing income or wealth taxes, but I think that it's good for everyone that the US is even having this conversation.


I also believe the United States must embrace the Green New Deal and reduce its military budget to fund it.


The United States spends 3 times as much as China and 9 times as much as Russia on defense...

The United States military spending will be a hot topic in the presidential elections of 2020 as it plays an important part of the total federal budget. If we consider that the United States spends 3 times as much as China and 9 times as much as Russia on defense, they should have enough room to use some of that military spending and help finance the Green New Deal.


In 2018 the United States made a heavy overhaul in taxes, reducing income tax for top earners from 45% to 39% and corporate tax from 35% to 21%. This tax cut has certainly polarized the left and right, but I believe it can pay off in the long run as long as lawmakers in Washington start following Fridman’s suggestions and implement a tax on Carbon, a small Financial Speculation tax and Weapons Tax, among other Pigouvian Taxes to offset the reduction of income and corporate taxes.


It is very important to have a coherent narrative and appealing arguments when we describe how the Green New Deal can be funded.


It's very easy for Ocasio-Cortez and Warren’s political enemies to label them as “watermelons”: green on the outside, but red in the core. “They are not environmentalist, they are communist” some hard-core republicans may say.


This kind of political branding is something all environmentally conscious people have to deal with. The Green agenda has always been associated with the “left” when this is not always the case.


From my point of view, labour should not be penalized with a tax, regardless of the level of income. People should be motivated to work. Not the other way-round. Corporations are capital allocators and job creators and should be supported with a low tax.


I believe in the Green New Deal. We need to decarbonize our economy and think about humanity’s future in the age of climate change. However, the rationale behind the financing of the Green New Deal should be sound, otherwise we will never gather the consensus needed for it to be an eligible policy plan.


We need to think differently and Friedman has given us many ideas on how we can achieve this endeavour smoothly. Friedman’s Green New Deal should be the philosophical framework and guideline for all political parties and civil societies in general. Right or Left, climate change does not discriminate and should be everybody’s top priority and new technologies and different configuration or set of taxes should be applied.


From the seminal book “The Lexus and the Olive Tree”, to his latest “Thank you for Being Late”, from his articles in the New York Times to the many conferences he has given along the years, Thomas Friedman has been sharing his thoughts on globalization, geopolitics and climate change, and has probably inspired me and shaped my mind as no other person alive.


Thanks Tom.





Kaccelerator is a next-generation thematic investment fund focused on disruptive innovations that are changing the world for the better and that have long-term growth potential. We believe in the transformative power of allocating capital into mission-driven businesses that can deliver positive change and alpha.


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