How Big Are Green Spending Multipliers?

Fixing the twin climate and biodiversity crises is still possible, but it requires stewarding the global economy within limits set by nature (Rockström et al. 2017; Attenborough 2020; Georgieva 2020; Stiglitz 2020; Carney 2021). Although some have argued that cutting emissions and protecting wildlife clashes with job creation and growth (see, for example, Walley and Whitehead 1994; NERA 2017; and Christian 2021), analysis based on a global survey of experts found that green projects are widely perceived as capable of creating more jobs and delivering higher short-term returns per dollar spent by comparison with traditional fiscal stimuli (Hepburn et al. 2020). In a recent paper (Batini et al. 2022), we contribute to this debate. To our knowledge, it is the first study directly estimating the effect on GDP of money spent to foster the transition to a zero-carbon, nature-friendly world for a variety of green expenditure typologies. Although ‘green’expenditure has historically tended to be defined as spending that helps reduce greenhouse gas emissions, we expand the definition to include examples of nature-based negative emissions technologies (“nature-based solutions” or NBSs) in the form of expenditure on biodiversity conservation and rewilding. These are increasingly regarded by science as solutions that support the Earth’s natural capabilities to sequester carbon and mitigate climate change. Moreover, these measures have been shown to be a vital complement of planetary climate and global temperature stabilisation strategies (IPCC 2019; IPBES 2019; Foley et al. 2020; Dasgupta et al. 2021).