Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?

Hepburn, Cameron, O'Callaghan, Brian, Stern, Nicholas, Stiglitz, Joseph and Zenghelis, Dimitri (2020) Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change? Oxford Review of Economic Policy, 36 (Supplement_1). S359 - S381. ISSN 0266-903X

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Abstract

The COVID-19 crisis is likely to have dramatic consequences for progress on climate change. Imminent fiscal recovery packages could entrench or partly displace the current fossil-fuel-intensive economic system. Here, we survey 231 central bank officials, finance ministry officials, and other economic experts from G20 countries on the relative performance of 25 major fiscal recovery archetypes across four dimensions: speed of implementation, economic multiplier, climate impact potential, and overall desirability. We identify five policies with high potential on both economic multiplier and climate impact metrics: clean physical infrastructure, building efficiency retrofits, investment in education and training, natural capital investment, and clean R&D. In lower- and middle-income countries (LMICs) rural support spending is of particular value while clean R&D is less important. These recommendations are contextualized through analysis of the short-run impacts of COVID-19 on greenhouse gas curtailment and plausible medium-run shifts in the habits and behaviours of humans and institutions.

Item Type:	Article
Official URL:	https://academic.oup.com/oxrep
Additional Information:	© 2020 The Authors
Divisions:	Economics
Subjects:	G Geography. Anthropology. Recreation > GE Environmental Sciences R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification:	E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E65 - Studies of Particular Policy Episodes Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
Date Deposited:	18 Oct 2021 13:33
Last Modified:	12 Dec 2024 02:23
URI:	http://eprints.lse.ac.uk/id/eprint/112458

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