Like its 1930s counterpart, the Green New Deal should champion democratic cooperation in electricity.

While the world has failed to make significant progress in combating climate change over the past decade, the prospect for real action looks very promising today. Proponents of a Green New Deal aim not to nudge the current energy economy toward carbon neutrality but to restructure the production, distribution, and use of energy. Even as it represents a break from the impoverished political imagination of the (still ongoing) neoliberal era, the Green New Deal draws on a rich legal and historical template for transforming our energy economy and deepen democracy.

The government structures—indeed builds—a market economy through the creation of property rights, the enforcement of contracts, and the construction and maintenance of roads and highways, among other actions. Two forms of market structuring should be at the heart of the Green New Deal. First, the corporation is a creation of the state endowed with the special privilege of limited liability. This generally protects the owners’ personal assets in the event of legal claims against the corporation. Given this privilege of limited liability, states historically treated corporations as quasi-public institutions. Second, the government can use its monetary power to promote certain activities and types of firms. During the New Deal, the federal government established a program to electrify rural America through cooperatives owned and controlled by their customers.

Building on this law and experience, fostering democratic cooperation at the state and local level should be a core principle of the Green New Deal. Specifically, Congress should create a cooperative charter for state and local governments and existing electric co-ops that want to remake their electricity supply systems. In line with the historical conception of the corporate form, this charter should both confer privileges and impose duties on cooperatives. First, this charter should grant the legal authority and the funds necessary to both acquire existing investor-owned utilities and invest in clean energy. Second, the federal charter should require cooperatives to govern themselves in accordance with democratic principles and end the production and purchase of fossil fuel-generated electricity by 2040. This charter would help decarbonize the energy system and ensure that this vital transition is managed by all of us—not by Wall Street or fossil fuel interests.

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