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Fiscal Policies for a Sustainable Recovery and a Green Transformation

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dc.contributor.authorCatalano, Michele
dc.contributor.authorForni, Lorenzo
dc.date.accessioned2021-10-14T13:44:06Z
dc.date.available2021-10-14T13:44:06Z
dc.date.issued2021-10
dc.description.abstractThis paper compares the effectiveness of different fiscal policy instruments—carbon pricing, fiscal incentives for private green investments, and public green investment—in supporting a green recovery that is also fiscally sustainable. It argues that relying on carbon pricing or green investments is not sufficient to achieve the transition to a low-carbon economy in a timely and sustainable way. Carbon pricing alone would result in rapid and significant energy price increases that would be recessionary. Similarly, the level of public green investment needed to reach the Paris goals without recourse to carbon pricing would be so great that it would endanger debt sustainability. The conclusion from the simulations supports the view that a mix of supply-side policies (carbon pricing) and demand-side interventions (deficit financed green public investment) is necessary to achieve the Paris goals within the specified period and with a fiscally sustainable outcome. The paper also assesses the costs associated with transitioning to a low-carbon economy by geographic area. It finds that deficit financed public green investment by high-emitting countries only (typically advanced and emerging economies), would have positive growth impacts for those countries and enhance their fiscal sustainability, while also providing large positive spillovers to other countries, particularly to highly climate sensitive nations. In turn, the simulations show that wherever fiscally feasible it is in the best interest of all countries to increase public investment in the green economy.en
dc.identifierhttp://documents.worldbank.org/curated/undefined/499301633704126369/Fiscal-Policies-for-a-Sustainable-Recovery-and-a-Green-Transformation
dc.identifier.doi10.1596/1813-9450-9799
dc.identifier.urihttps://hdl.handle.net/10986/36385
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 9799
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectCLIMATE CHANGE
dc.subjectGLOBAL WARMING
dc.subjectGOVERNMENT POLICY
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectFISCAL POLICY
dc.subjectGREEN GROWTH
dc.titleFiscal Policies for a Sustainable Recovery and a Green Transformationen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleFiscal Policies for a Sustainable Recovery and a Green Transformation
okr.date.disclosure2021-10-08
okr.date.doiregistration2025-04-10T11:12:04.960844Z
okr.date.lastmodified2021-10-08T00:00:00Zen
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/undefined/499301633704126369/Fiscal-Policies-for-a-Sustainable-Recovery-and-a-Green-Transformation
okr.guid499301633704126369
okr.identifier.doi10.1596/1813-9450-9799
okr.identifier.externaldocumentum090224b088a54838_1_0
okr.identifier.internaldocumentum33476121
okr.identifier.reportWPS9799
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/499301633704126369/pdf/Fiscal-Policies-for-a-Sustainable-Recovery-and-a-Green-Transformation.pdfen
okr.topicEnvironment::Climate Change Mitigation and Green House Gases
okr.topicEnvironment::Climate Change and Environment
okr.topicEnvironment::Environment and Energy Efficiency
okr.topicEnvironment::Green Issues
okr.topicPublic Sector Development::Public Sector Expenditure Policy
okr.unitMacroeconomics, Trade and Investment Global Practice
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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