Front Matter
  • 1 0000000404811396 Monetary Fund
  • | 2 0000000404811396 Monetary Fund

Copyright Page

© 2021 International Monetary Fund


IMF Working Paper

Independent Evaluation Office and Research Department

Building Back Better: How Big Are Green Spending Multipliers?1

Prepared by Nicoletta Batini, Mario Di Serio, Matteo Fragetta, Giovanni Melina, and Anthony Waldron

Authorized for distribution by Prakash Loungani and Chris Papageorgiou

March 2021

IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, the Independent Evaluation Office, IMF management, or UK’s FCDO.


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.

JEL Classification Numbers: C11, H50, O44, P18, Q00, Q01, Q20, Q43, Q50

Keywords: green multiplier, green stimulus, clean energy, conservation spending, nuclear energy, biodiversity, nature-based solutions, agricultural subsidies, fossil fuels.

Authors’ E-Mail Address:;;;;


  • Abstract

  • I. Introduction

  • II. Why More Is Needed on Clean Energy and Conservation

  • III. Data on Green and Non-eco-friendly Spending

    • A. Green Energy Spending Data

    • B. Non-Eco-Friendly Energy Spending Data

    • C. Green Land Use Spending Data

    • D. Non-Eco-Friendly Land Use Spending Data

  • IV. Methodology

    • A. Empirical Model

    • B. Data Coverage and Specification

  • V. Results

  • VI. Robustness Analysis

  • VII. Conclusions and Policy Implications

  • References

  • Appendix

    • A. Data


We thank Michel Berthélemy (OECD-Nuclear Energy Agency) for providing nuclear energy investment data. We are deeply indebted to Greg Kaser, Philippe Costes and King Lee (all World Nuclear Association), as well as to Victoria Alexeeva Bertrand Magné, Henri Paillere and Aliki Van Heek (all International Atomic Energy Agency) for the illuminating discussions on nuclear energy data and the sector more generally. We are indebted to Joshua Goldstein and Steffan Qvist who helped us contact them. We also thank Michael Waldron and Pablo Gonzalez at the International Energy Agency for providing us with data on supply and power generation of both clean and fossil fuel energy. In addition, we are grateful to Tim Searchinger and Chris Malins for providing broken down data from their 2020 World bank paper on agricultural subsidies and explaining methodologies to us. Dan Miller kindly agreed that we used the global dataset that he originally produced on conservation spending and was later used for publications in Nature and PNAS. Conversations with Frank Hawkins, Thomas Lovejoy, Juha Siikamaki, John Tobin, Andrew Karolij, Michael Jenkins, Patrick McGuire and Charlotte Kaiser helped us navigate in the ‘jungle’ of global conservation finance. Hanbo Hi provided excellent research assistance in collecting macroeconomic data. Financial support by UK’s FCDO is gratefully acknowledged. We are grateful also to Roberto Buizza, Andrea Roventini, the Dasgupta Review team, and many IMF and World Bank colleagues for their useful comments. All errors are our own.

Building Back Better: How Big Are Green Spending Multipliers?
Author: Nicoletta Batini, Mario di Serio, Matteo Fragetta, and Mr. Giovanni Melina