At a Glance
Some of the most well respected names in American climate policy (Bill McKibben, Elizabeth Warren, Jamie Henn, and Data for Progress) have been calling for a Green Marshall Plan: an expansion upon the postwar program of United States financial aid to countries in Europe. The context for the recent calls is the pressure put on the European and global fossil energy market by the Russian invasion of Ukraine and subsequent sanctions. Well-meaning climate heads understandably see this shift in energy prices as an opportunity to finally get some carbon-free infrastructure going and because it’s the “first war in Europe in 70 years (if we ignore Cyprus, Northern Ireland, former Yugoslavia, former Czechoslovakia, etc).” The Marshall Plan is an easy proxy for the kind of funding folks are advocating. While providing American dollars to pay for Germans to buy heat pumps sounds like a pretty nice thing, the historical impacts of the Marshall Plan call into question whether it should really serve as a model for global decarbonization.
Double Take
In 2020, during a seminar at the Trinity Center for Environmental Humanities, leading environmental historian and avid knitter Verena Winiwarter was asked what date she would pick as the beginning of the Anthropocene (the time frame for this human-driven geologic period is a hot debate among historians, geophysicists, and everyone in-between). Her answer was the 1948 enactment of the European Recovery Program, colloquially known as the Marshall Plan. The implication here is that the turning point for humanity’s influence on the biosphere, namely the catastrophic changes to the climate wrought by the burning of fossil fuels, is the same government aid package being name-checked by Warren and McKibben as a pivotal move in averting the worst of the climate crisis. Advocates for a Green Marshall Plan aren’t shying away from this history; in fact the Data For Progress memo on the proposal specifically states that Marshall Plan 1.0 “locked in a fossil-fuel dependent economy, further contributing to climate change today.” Data for Progress and others see a Green Marshall Plan as a way to rehabilitate the original, making it undo the energy system changes it triggered. So to fully assess whether or not this serves as a good model, let’s look into exactly how the Marshall Plan changed global energy.
According to Timothy Mitchell’s book Carbon Democracy, the Marshall Plan worked hand-in-hand with the 1944 Bretton Woods Agreement which profoundly changed the global economy and founded the International Monetary Fund and the World Bank. Previous to 1944, most global currencies were tied to a gold standard, meaning that every dollar was tied directly to an amount of gold owned by a country’s government. This worked pretty well as long as your country had a good amount of gold to back its currency but after WWII, the United States had accumulated 80% of the world’s gold reserves by selling warplanes, oil, and other wartime supplies to its European allies. Without gold to back them, Europe’s currencies were at the verge of collapsing and thus the Bretton-Woods Agreement abandoned the gold standard for a new standard of value: the amount of goods exchanged. In other words, the value of most of the world’s money after the Second World War was, and continues to be, based on how often that money changes hands.
The Marshall Plan 1.0 used this economic restructuring to its advantage by giving European nations American dollars to exchange for American products, the most popular of which was oil. However, before and during WWII, Europe’s infrastructure mostly relied on coal coming mostly from the continent itself which didn’t help the American corporations who had been working hard to seize as much Middle Eastern oil as they could. Coal’s labor-intensive extraction process also made it prone to worker disputes and strikes which oil’s largely free-flowing and automated extraction process avoided, another win for neoliberalism. Therefore, the Marshall Plan’s build-back-better-y funding was intended to help Europe recover while restructuring European energy infrastructure to rely on oil from US corporations who demanded payment in American dollars. This restructuring even changed agricultural practices, with Marshall Plan grants and loans paying for tractors in Italy and France and for United States experts to introduce fossil-fuel intensive fertilizer and pesticide regimes to Ireland. The aha moment in Timothy Mitchell’s analysis of this history is that the reliance of European nations (and their colonies and pseudo-colonies) on American oil from the Middle East solidified purchases of oil as the largest portion of American dollars exchanged. This means that the combined effect of the Bretton-Woods agreement and the Marshall Plan was not only to strengthen the US dollar, but to switch out the gold standard for a new global monetary standard based on the continued exploitation of oil.
Hindsight
The thing that raises my eyebrows about the promise of a Green Marshall Plan is not necessarily that the original was based around oil, but that it made Europe, and to a large extent the world, energetically and economically dependent on the United States. The reason shocks to Russian oil are so catastrophic to Europe in the first place is because Russian oil companies were able to plug into the oil-dependent infrastructure put in place by the United States. We’ve seen this pattern of international aid as a form of dependency continuously used in the past century, from World Bank loans whose interest payments enthrall countries in the Global South, to the Green Revolution which replaced agricultural traditions in South America and Asia with energy intensive agricultural regimes reliant on US patented seeds, inputs, and infrastructure. Ultimately, the goal of carbon-neutral energy is energy independence: being able to harness energy directly from the sun, the wind, or in the case of Bill McKibben’s heat pumps, the ambient heat of the planet, instead of relying on an energy source sold by a distant corporation. It’s ironic to think of the United States paying for Europe to decarbonize when the EU’s decarbonization has been much more effective and started much earlier, but that’s just the kind of climate action COP26 shows the wealthiest and most powerful humans us are okay with: you bend over backward to sequester carbon so we don’t have to. But can an aid program that purposefully echoes the Marshall Plan, backed by America’s oil-soaked dollars, actually foster energetic and financial independence from the very thing that made the United States a political and economic superpower? I wouldn’t put money on it.