The Economic Opportunity Cost of Green Recovery Plans

Timothy Fitzgerald and Casey Mulligan

No 30956, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Advocates in several countries have promoted a “green recovery” from the pandemic, with an emphasis on measures to address climate objectives. We evaluate proposals for the United States and find that as stated, ambitious plans to further cut emissions from transportation and electricity will require more inputs to produce the same outputs, resulting in recurring costs of up to $483 billion per year. We forecast that real GDP and consumption will be 2-3 percent less in the long run if policies are implemented as stated, underscoring the opportunity costs of achieving green objectives when resources might be more efficiently deployed.

JEL-codes: Q40 Q48 Q54 Q58 (search for similar items in EconPapers)
Date: 2023-02
New Economics Papers: this item is included in nep-ene and nep-env
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