## How Governments Can Create a Green, Job-rich Global Recovery

_IMF Blog, December 4, 2020_

## Source details

**Canonical URL:** [How Governments Can Create a Green, Job-rich Global Recovery](https://www.imf.org/en/blogs/articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery)

## Other formats

- [Markdown version](/en/blogs/articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery/index.md)
- [Structured JSON version](/en/blogs/articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery/index.json)
- [Bundle manifest](/en/blogs/articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery/bundle-manifest.json)

## Bibliographic details
- Authors: Kristalina Georgieva, Rajiv J Shah
- Published: December 4, 2020

---

### Overview and framing
- Climate change and the COVID-19 crisis share characteristics: both are described as "human tragedies and economic catastrophes."
- Pandemic impacts cited: "more than a million lives," "hundreds of millions out of work," and "projected to wipe out $28 trillion in output over the next five years."
- Both crises disproportionately harm vulnerable people and communities and penalize under-preparation and shortsightedness.
- A coordinated, green public investment push can address both crises simultaneously.

### Rationale for green public investment
- Coordinated action amplifies effectiveness: evidence from the financial crisis suggests that if G20 countries acted alone rather than together, "it would take about two-thirds more spending to achieve the same outcomes."
- Investing in green projects creates jobs and reduces climate risk compared with fossil-fueled investments (e.g., coal-fired plants).
- Examples of "job-rich projects" listed:
  - planting forests and mangroves
  - engaging in soil conservation
  - retrofitting buildings to make them more energy efficient
  - building climate-resilient infrastructure
  - expanding green public transportation, renewable energy, and smart electricity grids
  - investing in off-grid renewables to connect some of the "3.5 billion people who currently lack access to sufficient electricity"

### Current commitments and examples
- "The world’s largest economies have already committed over $12 trillion in fiscal spending for coronavirus recovery."
- The European Union pledge: "to spend more than $640 billion (€550 billion) on green projects over the next several years."
- Emerging market actions: Indonesia and Egypt are issuing green bonds.
- Observed concern: "the balance between green and non-green spending so far tilts too much toward the latter, risking further environmental degradation."

### Policy tools and mechanisms recommended
- Synchronize stimulus and investment decisions across countries to mobilize capital efficiently and avoid duplication of spending.
- Use international coordination (e.g., a G20-led effort) to mobilize new sources of capital for countries that need it, including low-income countries where much climate adaptation work must be done.
- Design policies to unlock private-sector capital and ingenuity:
  - Implement a steadily increasing carbon price or equivalent measures to accelerate private-sector shift to cleaner energy and greater energy efficiency.
  - Use some carbon pricing revenue to ensure a "just transition" that protects people in poverty from higher energy prices and assists displaced workers.
- Combine debt-financed green investment with carbon pricing as a policy package.

### Economic and labor impacts
- Claim on combined policy impact: "A debt-financed green investment plan combined with carbon pricing could actually boost economic growth for many years, creating around 12 million net new jobs through 2027."
- International coordination can reduce the fiscal burden required by any single country to achieve recovery objectives.

### Strategic call to action
- Opportunity identified: make "smart, coordinated decisions—ones that can catalyze green investments to jump-start the recovery and decrease the likelihood and impact of climate catastrophe."
- Recommendation for global leaders: replicate the 2008 G20 coordinated recovery program approach now to mobilize capital and support low-income countries (building on pandemic-era measures such as suspension of debt service payments and a common framework for resolving unsustainable debt).

*Source: How Governments Can Create a Green, Job-rich Global Recovery — Kristalina Georgieva, Rajiv J. Shah; December 4, 2020.*

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## References

- [عربي](https://www.imf.org/ar/News/Articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery)
- [日本語](https://www.imf.org/ja/News/Articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery)
- [Português](https://www.imf.org/pt/News/Articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery)
- [$28 trillion in output](https://blogs.imf.org/2020/10/13/a-long-uneven-and-uncertain-ascent/)
- [creating around 12 million net new jobs](https://blogs.imf.org/2020/10/07/finding-the-right-policy-mix-to-safeguard-our-climate/)

_Source: https://www.imf.org/en/blogs/articles/2020/12/04/blog-how-governments-can-create-a-green-job-rich-global-recovery_