Building Back Better: How Big Are Green Spending Multipliers?

Estimates multipliers for spending in clean energy and biodiversity conservation to help inform stimulus measures for a post-COVID-19 sustainable recovery

• From: Foreign, Commonwealth & Development Office
• Published: 10 August 2022

• Document Type: Working Paper
• Theme: Climate and Environment and Economic Growth
• First published: 19 March 2021
• Authors: Batini, N, di Serio, M, Fragetta, M, Melina, G and Waldron, A

Abstract

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 activities바카라 사이트”from zero-emission power plants to the protection of wildlife and ecosystems바카라 사이트”can generate more than a dollar바카라 사이트™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 바카라 사이트˜building back better바카라 사이트™ could be a win-win for economies and the planet.

This work is part of the 바카라 사이트˜Macroeconomics in Low-income countries바카라 사이트™ programme

Citation

Nicoletta Batini, Mario di Serio, Matteo Fragetta, Giovanni Melina, and Anthony Waldron (2021) Building Back Better: How Big Are Green Spending Multipliers? IMF Working Paper No. 2021/087

Links

Published 10 August 2022