Long-term climate-friendly stimulus policies often have the best overall economic impact and not just a slowing effect on global warming, according to a study by an international team of leading economists, including Joseph Stiglitz and Nicholas Stern, published Thursday 7 May in the Oxford Review of Economic Policy.
They identified more than 700 stimulus policies and conducted a survey of 231 experts from 53 countries, including senior officials from finance ministries and central banks.
Based on this survey, as well as lessons learned from the 2008 financial crisis, economists have found that green projects create more jobs, offer a better short-term return per dollar spent and provide long-term savings compared to traditional fiscal stimulus measures.
The economists recognise that 'green' policies can cover a wide definition, but the study focused on reducing greenhouse gas emissions as a key criterion for environmental benefit.
The economists observe that desirable policies have a high return on investment, can be implemented quickly and have a strong positive impact on the climate. Investments in renewable energy production, such as wind or solar power, are examples of this. As previous research has shown, in the short term, building clean energy infrastructure is particularly labour-intensive, creating twice as many jobs per dollar invested as investments in fossil fuels and being less likely to be offshored.
Other examples include expenditure on upgrading the energy efficiency of buildings, expenditure on clean energy research and development, investment in natural capital for ecosystem resilience and regeneration, and investment in education and training to address immediate unemployment due to Covid-19 and unemployment due to decarbonisation.
Link to the study: https://bit.ly/2WBXBPc (Original version in French by Aminata Niang)