Only Green Planning Can Address the Twin Crises of Climate and Cost of Living

The Coordination Problem

The Green Planning Commission reconsiders a fundamental relationship — ownership and the kinds of coordination it makes possible, determining who organizes investment and production, who controls society’s surplus, and who sets the terms of consumption.

Decarbonization requires coordinating a massive change in infrastructure across the economy. Achieving net zero will require clean energy investment to nearly triple to over 20 per cent of global investment, while trillions of dollars in profitable fossil fuel assets will have to be written off early. Markets coordinate by chasing profit and freezing when uncertainty hits — tendencies that make decarbonization harder. The profit motive prevents divestment from profitable fossil assets. Liquidity preference starves green investment. Uncoordinated private actors cannot choreograph the synchronized supply chain coordination, sequenced capital phaseout, and production ramp-up that decarbonization demands.

Affordable essentials require coordinating provision so all can access them. Consumer prices have risen by 24 per cent in the US and 28 per cent in the UK since the pandemic, while trade chaos points to a further reacceleration of inflation. Markets organize provision around private ownership and profit extraction, increasing costs without improving quality. Private ownership encourages maximizing returns through both underinvestment and overcharging.

Market coordination has failed to meet either challenge. For the sake of the transition, alternative approaches to planning and provision must be developed.

Why Markets Cannot Deliver

Market coordination works by using profit signals to determine what should be produced. This mechanism has fundamental limits for states looking to achieve decarbonization and keep down the cost of living.

On decarbonization: China is years ahead of the west and its own targets. Private control of investment cannot achieve necessary timelines. Fossil fuel producers are reticent to divest following years of record profits, while investors would rather own stocks than wind farms. Markets coordinate asynchronously and reactively — supply chain bottlenecks create inflation rather than coordinated investment.

On the rising cost of essentials: in the UK, households pay hundreds of pounds in a “privatization premium” each year, while hundreds of billions have been paid out to shareholders and bondholders. In the private US healthcare system, administration costs are five times higher than in the public Canadian healthcare system. On both sides of the Atlantic, privatization raises costs. The profit imperative combines systematic underinvestment with maximum extraction from consumers.

Public ownership and planning make it possible to overcome both challenges. Removing profit as the organizing principle allows coordination around the needs of people and the climate. Rebuilding public provisioning lets taxes allocate costs progressively instead of regressive consumer bills.

Recent Reforms Have Proven Insufficient

Recent legislation shows dawning recognition that market coordination has limits. The Inflation Reduction Act (IRA) was the largest US climate bill in history, using subsidies and incentives to steer private investment. The UK continues to pursue its Clean Power 2030 plan and industrial strategy, targeting renewable auctions and net zero by 2050.

Neither matched the scale of the challenge. Since the repeal and rollback of the IRA, the International Energy Agency has cut forecasts of US renewables deployment by half. In the UK, market-oriented energy policy led to significant problems with the 2023 offshore wind auction alongside rising electricity bills — where a quarter is pure profit — showing the limits of a derisking approach. These policies subsidized private investment but left fundamental coordination decisions to private market actors, who remained unable to coordinate supply chains or prioritize systemic outcomes over profit.

Alternative coordination regimes exist but cannot be simply imported. In 2024, China deployed twice as much solar capacity as the US has in total. State-led coordination can achieve remarkable scale, but China lacks democratic governance and continues to add carbon capacity, showing their central policy goal to be energy independence, not decarbonization. Less developed countries face constraints from global financial hierarchies, technological positioning, and macrofinancial pressures. Truly democratic solutions to the coordination problem of decarbonization have yet to be developed. For advanced economies to pull their weight in the transition, their policymakers must learn to look beyond the market without sacrificing democratic values.

The Green Planning Commission Approach

The Commission will develop a politics and program of green democratic planning oriented towards systemic needs for decarbonization and people’s needs for affordable essentials — not towards profit. The goal: decarbonize, democratize, and decommodify.

Moving beyond markets means reopening the question of planning — using the powers of the state to directly coordinate and fund economic activity. Corporations do this internally — Wal-Mart centrally plans an internal economy whose GDP would consistently rank in the top 25 globally, were it a country — but so far states with advanced economies have declined to do so. Planning does have limits. Decades of privatization and attacks on the administrative state mean that for a planning approach to be successful, state capacity must be rebuilt. But the Commission believes these dual crises will only be solved through robust public direct investment, coordination, and provision oriented towards social outcomes and system needs. Pursuing this hypothesis, the Commission will deliver the following over the coming two years.

• Macroeconomic frameworks for public investment institutions and coordination.
• Macrofinancial reform proposals including credit guidance mechanisms.
• Sectoral strategies across energy, housing, transport, food, and industry.
• Corporate governance models for firm-level industrial democracy.
• International governance frameworks for cooperative development.

Why This Matters Now

Whether states face up to these crises will define our era. Market coordination will cause massive damage while failing on both challenges — as climate breakdown accelerates, essentials become more unaffordable; the vicious cycle tightens. Only green democratic planning can meet both challenges.

The political moment creates opportunity. The authoritarian right offers no credible solutions — immigration restrictions do not address the structural drivers of unaffordable essentials nor climate and environmental breakdown. Meanwhile, the growing crises create space to link climate action and cost of living into a unified political coalition: workers facing unaffordable essentials, frontline communities, and labor movements organizing just transitions.

The Commission will operate in a spirit of open inquiry, seeking to formulate an agenda that decarbonizes while making the economy fairer, by developing institutional solutions adequate to the scale of transformation our moment demands.

Green democratic planning is the next progressive paradigm.

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Alex Williams and Mathew Lawrence