The left must be bold and back a green new deal | Larry Elliott

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It’s often said that real change takes place at a time of crisis, but that’s not the whole story. A crisis makes change possible, but only when new ideas are knocking about does it actually happen. Otherwise, it is soon business as usual. The US economist Milton Friedman understood that fact, which is why he toiled away in the political wilderness to plot the downfall of postwar social democracy and was fully prepared when trouble arrived in the mid-1970s.

Contrast that with the mainstream left, which was so in thrall to market forces and globalised capital that it was bereft of ideas when the financial crisis broke in 2007, and as a result blew a golden opportunity to challenge the status quo. The age of austerity was the result.

Lessons needed to be learned – and they have been, not least by Alexandria Ocasio-Cortez, who won a seat in the US House of Representatives and has been calling for a 21st-century equivalent of Franklin Roosevelt’s plan to tackle the Great Depression: a green new deal.

Ocasio-Cortez’s plan mixes old and new. She wants a living-wage job for anyone who wants one; universal healthcare; and basic income programmes as part of a “detailed national, industrial, economic mobilisation plan” that would ensure the US was powered by 100% renewable electricity and eliminated greenhouse gas emissions from manufacturing, agriculture and other industries.

Full disclosure here: I was a founder member of the UK Green New Deal Group in 2007 and have been banging on about the idea – with almost zero impact – ever since. There was a time in 2008 when both Barack Obama and Gordon Brown seemed to be warming to it, but the moment was lost.

There is already pushback against Ocasio-Cortez, and without question the immediate chances of success are not great. For a green new deal to become a reality, the Democrats would have to be in control of the White House and both houses of Congress. What’s more, the Democratic hierarchy would need to stop thinking that the answer to Donald Trump is to cleave to the centre.

But, as the new right showed all those decades ago, it is important to start preparing the ground even when the politics look unfavourable, so that you are ready when the opportunity arises. And, let’s face it, it is only a matter of time before an opportunity does present itself. Why? Because the world faces not just one but four challenges in the coming years, and this quadruple crunch will demand new thinking.

Crunch number one is the ever-increasing threat posed by global warming. The Intergovernmental Panel on Climate Change says the world has until 2030 to take the measures needed to prevent a temperature increase of more than 1.5C. If it doesn’t, catastrophe awaits. The decarbonisation of economies is happening, helped by a sharp drop in the cost of renewable energy sources, but progress is not nearly fast enough. Green New Dealers are rather like those calling in the 1930s for countries to mobilise in the fight against fascism: they think rearmament is happening too slowly, and that the fight will only be won when economies are put on an environmental war footing.

But that means speeding up the transition to renewables and conserving as much energy as possible during the transition from fossil fuels: scaling up investment in solar and wind power; reducing needless heat loss from homes through mass energy efficiency programmes; subsidising house-builders to install solar panels; and introducing feed-in tariffs so that households can sell their excess energy to the National Grid.

The third crunch is the risk that the world will suffer another financial and economic crisis before it has recovered from the last one, and at a time when the potency of the traditional weapon for dealing with recessions – that is, lower interests rates – is much reduced. Under a green new deal, central banks would do what they did in 2008 to 2009 – print money – only this time they would use it to invest in renewables and job-creating energy efficiency schemes, rather than handing the cash to the banks.

That’s not just because it makes more sense to use quantitative easing to tackle the existential risk of climate change than to boost asset prices. It’s also because green quantitative easing would allow the creation of well-paid, skilled jobs in places that need them most: the rust belt of the US and the old industrial towns of the UK. Failure to do this last time has turned a triple crunch into a quadruple crunch by generating a ferocious political backlash.

So far, that political anger has been exploited by the right. Ocasio-Cortez and her movement of young supporters think there is another way. And they have one big thing going for them: an idea whose time has come.

Larry Elliott is the Guardian’s economics editor

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