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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.
Mr. Michael Keen and Benjamin Jones

their emissions cause (through carbon pricing) . A cautious shift towards more aggressive carbon pricing (though taxation or tradable emission permits) need not impede recovery . Stronger emissions pricing could make a substantial and efficient contribution to restoring fiscal positions damaged by the crisis . Achieving such pricing requires resisting political pressures to overcompensate producers, notably by awarding them emissions permits free of charge . While carbon pricing is important,“greenstimulus measures have a useful role to play in sustaining

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

Mr. Michael Keen and Benjamin Jones

, 2009 , “An Outline of the Case for a Green Stimulus” ( London : Grantham Research Institute on Climate Change and the Environment ). Burtraw , Dallas , and Karen Palmer , 2008 , “Compensation Rules for Climate Policy in the Electricity Sector,” Journal of Policy Analysis and Management , Vol. 27 , No. 4 , pp. 819 – 47 . Commission of the European Communities , 2008a , “Package of Implementation Measures for the EU’s Objectives on Climate Change and Renewable Energy for 2020: Impact Assessment,” Commission Staff Working Document, Brussels

Nicoletta Batini, Francesco Lamperti, and Andrea Roventini

, B. , Goodman , J. , Johnson , A. E. , Kammen , D. M. , NoiseCat , J. B. , Paul , M. , Patel , R. et al . ( 2020 ), ‘ A green stimulus to rebuild our economy: an open letter and call to action to members of congress. medium, 23 mar 2020 ’. Bruegel ( 2020 ). URL: https://www.bruegel.org/publications/datasets/covid-national-dataset/ Carnot , N. , Kizior , M. , Mourre , G. et al . ( 2017 ), Fiscal stabilisation in the euro-area: A simulation exercise , Technical report , ULB-Universite Libre de Bruxelles . Chen , S

Benjamin Jones and Mr. Michael Keen

at a given price). Such measures are not without their own difficulties, however. It would be best to address the underlying causes of volatility—for example, by expanding the sectoral and geographic coverage of the chosen measures. Stimulating a green recovery Expenditures on environmental programs (green stimulus measures) have helped sustain aggregate demand and employment in the short term. Studies suggest that these could confer stronger growth effects than conventional measures such as general consumption or income support. A review of the recovery

Ian Goldin

concerted action. The pandemic has highlighted our lack of immunity to natural threats, but also created an opportunity to reset our economies. There is no shortage of ideas regarding green stimulus policies, which offer the potential to build back better and accelerate the transition from fossil fuels. Global protests, from climate to race, have demonstrated the appetite for fresh thinking. And COVID-19 has also demonstrated that citizens are prepared to change their behavior when required to do so. All that remains is for governments to act. Networked solutions

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

References Agrawala , S. , D. Dussaux and N. Monti , 2020 . “ What policies for greening the crisis response and economic recovery? Lessons learned from past green stimulus measures and implications for the COVID-19 crisis ”, OECD Environment Working Papers , No. 164 , OECD Publishing , Paris . Amendola , A. , M. Di Serio , M. Fragetta , and G. Melina , 2020 . “ The Euro-Area Government Spending Multiplier at the Effective Lower Bound .” European Economic Review 127, 103480 . 10.1016/j.euroecorev.2020

Mr. Michael Keen and Benjamin Jones
Negotiations toward a successor to the Kyoto Protocol on climate change have come to a critical point, and domestic climate policies are being developed, as the world seeks to recover from the deepest economic crisis for decades and looks for new sources of sustainable growth. This position paper considers the challenge posed by these two policy imperatives: how to exit from the crisis while developing an effective response to climate change. Blending the objectives of a sustained recovery and effective climate policies presents both challenges and opportunities. Although there are potential “win-win” spending measures conducive to both, the more fundamental linkages and synergies lie in the broader strategies adopted toward each other. Greater climate resilience can promote macroeconomic stability and alleviate poverty; and carbon pricing, essential for mitigation, can contribute to the strengthening of fiscal positions that is expected to be needed in many countries. There are, nevertheless, also difficult trade-offs to face, notably in the somewhat greater caution now warranted in moving to more aggressive emissions pricing. However, the simple policy guidelines for addressing climate issues remain fundamentally unchanged; the need to deploy a range of regulatory, spending, and emissions pricing measures.
Luc Eyraud, Mr. Abdoul A Wane, Ms. Changchang Zhang, and Mr. Benedict J. Clements

about $180–195 billion, of which the United States, China, and South Korea account for around $65, $46, and $32 billion, respectively. In the countries with the largest green packages ( Figure 4 ), green measures represent no more than 15 percent of the total fiscal stimulus, 16 except for South Korea, where 80 percent of the stimulus was earmarked for green investment. Figure 4. Green Component of Economic Stimuli as of February 2011 (Pledged, not necessarily disbursed; billions of dollars) Source: BNEF. The largest share of the green stimulus