6. How Big Are Green Spending Multipliers?

In Chapter 6, N. Batini, M. Di Serio, M. Fragetta, G. Melina, and A. Waldron argue that fixing the twin climate and biodiversity crises is still possible, but it requires stewarding the global economy within limits set by nature. The chapter addresses the question of whether there is “a trade-off between spending on the green economy and an economy’s strength,” and two key results are discussed. First, every dollar spent on green activities can generate more than a dollar’s worth of economic activity, whereas non-green spending returns less than a dollar. Second, for spending categories that are comparable, like renewable versus fossil fuel energy, multipliers on green spending are about double their non-green counterparts. The findings suggest that investments in energy and land/sea use transitions may be economically superior to those offered by supporting economic activities that involve unsustainable ways of producing energy and food.

Contributors

Nicoletta Batini

(author)

Lead Evaluator, Independent Evaluation Office at International Monetary Fund

https://orcid.org/0000-0001-7296-7737

Nicoletta Batini is the Lead Evaluator of the International Monetary Fund's Independent Evaluation Office. Prior to the IMF, she was Advisor to the Bank of England's Monetary Policy Committee, Professor of Economics at the University of Surrey, and Director of the International Economics and Policy Office of Italy's Department of the Treasury. She holds a PhD in international finance (SSSUPS Anna) and a PhD in Monetary Economics (University of Oxford). Currently, her research focuses on the economics of energy and land and sea use transitions for climate mitigation. Her new book, The Economics of Sustainable Food: Smart Policies for People and the Planet, was published in June 2021 by Island Press and the IMF.

Mario Di Serio

(author)

Research Fellow at University of Salerno

https://orcid.org/0000-0001-7486-2947

Mario Di Serio is a Research Fellow at the University of Salerno. He has been a consultant for the Cohesion Policies Department of the Presidency of the Italian Council of Ministers since 2021. He worked as an economic consultant for the Italian Ministry of Economics and Finance from 2017 to 2021. In 2018 he obtained a PhD in Economics from the University of Salerno, with a thesis on the non-linear effects of fiscal policies on EA and US economies. His research focuses mainly on fiscal policy, monetary policy and macroeconometrics.

Matteo Fragetta

(author)

Associate Professor of Macroeconomics at University of Salerno

https://orcid.org/0000-0001-7764-0813

Matteo Fragetta is an Associate Professor of Macroeconomics at the University of Salerno. Previously, he has been Visiting Scholar at the Cass Business School (with Professor Lucio Sarno) and at the University of Leicester. His research focuses on fiscal and monetary policy from an empirical point of view and on the role played by active and passive policy on labour outcome. He holds a PhD in the Economics of the Public Sector from the University of Salerno.

Giovanni Melina

(author)

Senior Economist, African Department at International Monetary Fund

Giovanni Melina is a Senior Economist in the African Department of the IMF. Previously, he worked for several years in the IMF's Research Department, as an Associate Professor of Macroeconomics at City University London, and as a Research Fellow at the University of Surrey. His research focuses on understanding the sources and propagation of macroeconomic shocks, on the design of monetary and fiscal stabilisation policies, and the link between macroeconomic policy and growth in developing countries. Recently, his research has also focused on green investments, the effects of climate change on the macroeconomic outcomes of disaster-prone countries and related policies. He holds a PhD in Economics from Birkbeck, University of London.

Anthony Waldron

(author)

Specialist in Biodiversity Finance and Economics, Cambridge Conservation Initiative at University of Cambridge

Anthony Waldron is a specialist in biodiversity finance and economics, based at the Cambridge Conservation Initiative in Cambridge University. He was lead author on the global economic analysis for the CBD 30x30 target and is Director of the biodiversity economics consultancy WACC. He led on the creation of the global database of conservation spending and published the first analysis of the effectiveness of that spending worldwide, in the journal Nature. Before Cambridge, he also worked at Oxford University, the National University of Singapore, UESC Brazil, and as Conservation Director of Fundacion Maquipucuna in South America.