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Nicoletta Batini, Mario di Serio, Matteo Fragetta, and Mr. Giovanni Melina
This paper estimates multipliers for spending in clean energy and biodiversity conservation to help inform stimulus measures for a post-COVID-19 sustainable recovery. Using a new international dataset, part of which was especially assembled for this analysis, we find that every dollar spent on key carbon-neutral or carbon-sink activities—from zero-emission power plants to the protection of wildlife and ecosystems—can generate more than a dollar’s worth of economic activity. The estimated multipliers associated with green spending are about 2 to 7 times larger than those associated with non-eco-friendly expenditure, depending on sectors, technologies and horizons. These findings survive several robustness checks and suggest that ‘building back better’ could be a win-win for economies and the planet.
Nicoletta Batini, Mario Di Serio, Matteo Fragetta, Mr. Giovanni Melina, and Anthony Waldron

protection of wildlife and ecosystems—can generate more than a dollar’s worth of economic activity. The estimated multipliers associated with green spending are about 2 to 7 times larger than those associated with non-eco-friendly expenditure, depending on sectors, technologies and horizons. These findings survive several robustness checks and suggest that ‘building back better’ could be a win-win for economies and the planet. JEL Classification Numbers : C11, H50, O44, P18, Q00, Q01, Q20, Q43, Q50 Keywords : green multiplier, green stimulus, clean energy, conservation

Nicoletta Batini, Mario Di Serio, Matteo Fragetta, Mr. Giovanni Melina, and Anthony Waldron

, consumption, or net exports) by 48 cents in the medium run. When the same dollar is spent on solar, wind or geothermal, 11 cents are instead crowded in. In addition, while the green multiplier is statistically significant up until 4 years after the shock occurrence, the non-eco-friendly multiplier loses its significance after 3 years. 20 A fair question is whether the difference between the two multipliers is statistically significant. Bayesian inference does not allow us to construct a test as in the frequentist approach. Therefore, we follow an approach compatible with