## Building Back Better: How Big Are Green Spending Multipliers?

_IMF Working Papers, March 19, 2021_

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## Bibliographic details
- Authors: Nicoletta Batini, Mario di Serio, Matteo Fragetta, Giovanni Melina
- Published: March 19, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513574462.001

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### Summary
- Provides estimates of output multipliers for spending in clean energy and biodiversity conservation, as well as for spending on non-ecofriendly energy and land use activities.
- Uses a new international dataset.
- Concludes that every dollar spent on key carbon-neutral or carbon-sink activities can generate more than a dollar’s worth of economic activity.
- Notes data limitations: not all green and non-ecofriendly expenditures in the dataset are strictly comparable.

### Key empirical findings
- Estimated multipliers associated with spending on renewable energy investment: 1.1-1.5.
- Estimated multipliers associated with spending on fossil fuel energy investment: 0.5-0.6.
- The multiplier for renewable energy investment is larger than that for fossil fuel investment with over 90 percent probability.
- Results survive several robustness checks.

### Scope and data limitations
- Analysis covers clean energy and biodiversity conservation spending as well as non-ecofriendly energy and land use activities.
- Based on a new international dataset; comparability across some green and non-ecofriendly expenditures is limited due to data constraints.

### Policy implications
- Findings lend support to bottom-up analyses arguing that stabilizing climate and reversing biodiversity loss are not at odds with continuing economic advances.
- Implication: green spending can be an economically stimulative tool, with some green investments generating more than a dollar of economic activity per dollar spent.

### Authors and publication
- By Nicoletta Batini, Mario di Serio, Matteo Fragetta, Giovanni Melina.
- March 19, 2021.
- Series: IMF Working Paper No. 2021/087; DOI: https://doi.org/10.5089/9781513574462.001

*Source: Building Back Better: How Big Are Green Spending Multipliers? (IMF Working Paper No. 2021/087, March 19, 2021).*

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_Source: https://www.imf.org/en/publications/wp/issues/2021/03/19/building-back-better-how-big-are-green-spending-multipliers-50264_