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

Cameron Hepburn, Brian O'Callaghan, Nicholas Stern, Joseph Stiglitz and Dimitri Zenghelis

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: climate change; Covid-19; fiscal stimulus; green recovery; coronavirus (search for similar items in EconPapers)
JEL-codes: E62 E65 Q54 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2020-09-28
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (24)

Published in Oxford Review of Economic Policy, 28, September, 2020, 36(Supplement_1), pp. S359 - S381. ISSN: 0266-903X

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Journal Article: Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change? (2020)
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