## Green recovery

## Source details

**Canonical URL:** [Green recovery](https://www.imf.org/en/topics/climate-change/green-recovery)

## Other formats

- [Markdown version](/en/topics/climate-change/green-recovery/index.md)
- [Structured JSON version](/en/topics/climate-change/green-recovery/index.json)
- [Bundle manifest](/en/topics/climate-change/green-recovery/bundle-manifest.json)

## Bibliographic details
- Authors: Kristalina Georgieva

---

### Overview
- In the aftermath of COVID-19, governments deployed extraordinary policy measures to save lives and protect people’s livelihoods; significant further efforts will be needed during the recovery phase to ensure a sustainable recovery, which policymakers must act to promote as a “green recovery.”  
- The International Monetary Fund (IMF) presents analysis and policy guidance under the themes Green Finance, Climate Resilience, Climate and the Economy, Mitigation, Fossil Fuel Subsidies, and Green Recovery.

### EU Climate Mitigation Policy — macroeconomic and distributional analysis
- Purpose: Contribute to the debate on policy choices to reach more ambitious 2030 emission reduction goals under consideration by EU policymakers.  
- Key finding:
  - A well-designed package consisting of:
    - more extensive carbon pricing across EU countries and sectors,
    - cuts in distortionary taxes, and
    - targeted green investment support
  - would allow the EU to reach the emission goals with practically no effects on aggregate income.
- Social and political acceptability recommendations:
  - Use part of the revenue from carbon pricing to compensate the most vulnerable households.
  - Support the transition of workers to greener jobs.
- Trade and leakage mitigation:
  - A carbon border adjustment mechanism could complement the package to avoid an increase in emissions outside the EU due to higher carbon prices in the EU (“carbon leakage”).
- Risk-reward assessment:
  - Benefits of reducing the risk of extreme life-threatening climate events and health benefits from lower air pollution clearly outweigh the costs of mitigation policies.
- Attribution: IMF publication titled "EU Climate Mitigation Policy."

### Sectoral Policies for Climate Change Mitigation in the EU — sectoral analysis and policy gaps
- Context:
  - Total EU emissions are nearly a quarter below their 1990 level.
  - Progress has varied across sectors:
    - Power and industry emissions have fallen by about a third.
    - Buildings emissions have fallen by a quarter.
    - Agriculture emissions have fallen by a fifth.
    - Transport emissions have risen.
- Diagnosis:
  - Divergence in sectoral performance reflects:
    - differences in effective carbon prices,
    - cost differences among available abatement channels,
    - market imperfections, and
    - policy gaps.
- Policy implication:
  - Specific sectoral policies are needed to address these factors to achieve the new emissions reduction goals.
- Attribution: IMF publication titled "Sectoral Policies for Climate Change Mitigation in the EU."

### Greening the Recovery — fiscal policy guidance during COVID-19
- Message:
  - Fiscal policy is rightly focused on fighting the COVID-19-induced economic crisis, but climate change remains and requires decisive action.
  - Decisions taken during the COVID-19 response may shape climate and human health for decades; fiscal policymakers should “green” their response to prevent one crisis leading to another.
  - Public support for green measures may be higher after the COVID-19 crisis.
- Product: Special Series on Fiscal Policies to Respond to COVID-19 (IMF).

### Regional focus: Sub‑Saharan Africa — resilient recovery pathway
- Date: September 15, 2020
- Imperative:
  - The vast global fiscal support deployed to fight the pandemic should also work to build a smarter, greener and more equitable future.
  - Sub‑Saharan Africa has the greatest needs and the world’s youngest population, increasing urgency to build forward better.
- Call to action:
  - Chart a path to a more resilient recovery for sub‑Saharan African countries.
- Attribution: IMF piece titled "Charting a Path for a Resilient Recovery in Sub Saharan Africa."

### Fiscal policy and crisis-phase commentary (selected IMF communications)
- "The Next Phase of the Crisis: Further Action Needed for a Resilient Recovery" — July 15, 2020:
  - As many countries gradually reopen while the pandemic remains, a new phase requires further policy agility and action to secure a durable and shared recovery.
- "Why Sustainable Food Systems are Needed in a post-COVID World" — July 14, 2020:
  - Food systems are essential to economic activity and have been long neglected by macroeconomists despite the global agri-food industry's mechanization, subsidies, and concentration.
- "Fiscal Policies for the Recovery from COVID-19" — May 06, 2020:
  - Fiscal policies have provided large emergency lifelines during the pandemic and are invaluable to increase a country’s readiness to respond to crises and support recovery.
- "A Global Crisis Like No Other Needs a Global Response Like No Other" — April 20, 2020 (by Kristalina Georgieva):
  - The crisis is:
    - More complex, with interlinked shocks to health and economies that halted normal life;
    - More uncertain, as effective treatments, containment and restart strategies are learned gradually;
    - Truly global, as pandemics and the economic shocks they cause do not respect borders.
- "Fiscal Policies to Contain the Damage from COVID-19" — April 15, 2020:
  - In times of pandemic, fiscal policy is key to save lives and protect people; governments must act decisively but keep accurate records ("keep the receipts").
- Attribution: IMF communications and statements listed with dates and authors where provided.

### Events and remarks related to climate and green recovery
- EU Environment Ministers Video-conference — Closing Remarks by Kristalina Georgieva | July 13, 2020.
- Virtual High-Level Dialogue of the Carbon Pricing Leadership Coalition (CPLC) — Introductory Remarks by Tao Zhang, IMF Deputy Managing Director | June 9, 2020.
- Organization for Security and Cooperation in Europe Parliamentary Web Dialogue — Opening Remarks: "COVID-19: Opportunities for a Green Recovery" by Tao Zhang, IMF Deputy Managing Director | May 22, 2020.
- Petersberg Climate Dialogue XI — Managing Director’s Opening Remarks by Kristalina Georgieva | April 29, 2020.
- Attribution: IMF event remarks and openings listed with speakers and dates.

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## Content in this bundle

- **Greening the Recovery**
  - [Greening the Recovery (Markdown version)](/-/media/files/publications/covid19-special-notes/en-special-series-on-covid-19-greening-the-recovery.pdf.md){rel="alternate" type="text/markdown"}
  - [Greening the Recovery (PDF)](/-/media/files/publications/covid19-special-notes/en-special-series-on-covid-19-greening-the-recovery.pdf){rel="external" type="application/pdf"}

---

## References

- [Green Finance](https://www.imf.org/en/topics/climate-change/green-finance)
- [Climate Resilience](https://www.imf.org/en/topics/climate-change/climate-and-the-economy)
- [Mitigation](https://www.imf.org/en/topics/climate-change/climate-mitigation)
- [Fossil Fuel Subsidies](https://www.imf.org/en/topics/climate-change/energy-subsidies)
- [Download the report](https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2020/09/16/EU-Climate-Mitigation-Policy-49639)
- [Download the report](https://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2020/09/16/Sectoral-Policies-for-Climate-Change-Mitigation-in-the-EU-49640)
- [Kristalina Georgieva](https://www.imf.org/en/About/senior-officials/Bios/kristalina-georgieva)
- [Closing Remarks](https://www.imf.org/en/News/Articles/2020/07/13/sp071320-managing-director-georgievas-closing-remarks-eu-environment-ministers-videoconference)
- [Introductory Remarks](https://www.imf.org/en/News/Articles/2020/06/22/sp062220-introductory-remarks)
- [Climate Change: From Awareness to Action](https://www.imf.org/en/News/Articles/2020/06/08/sp060920-climate-change-from-awareness-to-action-delphi-economic-forum-v)
- [Opening Remarks— COVID-19: Opportunities for a Green Recovery](https://www.imf.org/en/News/Articles/2020/05/22/sp052220-opening-remark-zhang)
- [Managing Director’s Opening Remarks](https://www.imf.org/en/News/Articles/2020/04/29/sp042920-md-opening-remarks-at-petersberg-event)

_Source: https://www.imf.org/en/topics/climate-change/green-recovery_