International Review of Environmental and Resource Economics > Vol 16 > Issue 1

What Is Past Is Prologue: Learning from the Global Financial Crisis to Green the COVID-19 Recovery

Shardul Agrawala, Organisation for Economic Co-operation and Development, France, shardul.agrawala@oecd.org , Damien Dussaux, Organisation for Economic Co-operation and Development, France, damien.dussaux@oecd.org , Norbert Monti, Organisation for Economic Co-operation and Development, France, norbert.monti@oecd.org
 
Suggested Citation
Shardul Agrawala, Damien Dussaux and Norbert Monti (2022), "What Is Past Is Prologue: Learning from the Global Financial Crisis to Green the COVID-19 Recovery", International Review of Environmental and Resource Economics: Vol. 16: No. 1, pp 1-41. http://dx.doi.org/10.1561/101.00000124

Publication Date: 13 Jun 2022
© 2022 S. Agrawala, D. Dussaux and N. Monti
 
Subjects
Carbon regulation,  Impact of electric vehicles,  Renewables integration,  Environmental economics,  Public economics,  Government programs and public policy
 
Keywords
JEL Codes: E61E62E65O44Q58
Stimulus packageenvironmental policypolicy evaluationpolicy designgreen growth
 

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In this article:
1 Introduction 
2 Elements of a Green Fiscal Stimulus 
3 Review of Ex Ante and Ex Post Evidence of Green Stimulus Packages Following the Global Financial Crisis 
4 Emerging Insights from Greening the COVID-19 Recovery Packages 
5 Conclusion: Lessons from GFC for Greening the COVID-19 Recovery 
Green Stimulus Measures and their Anticipated Effects 
References 

Abstract

This paper evaluates green stimulus packages that were introduced in response to the global financial crisis (GFC) of 2007–08 and draws lessons relevant for greening the recovery from the Coronavirus (COVID-19) pandemic. It provides evidence that well-designed green stimulus measures can help the economic recovery and bring about environmental benefits. Nevertheless, almost a decade and a half after the GFC unfolded, the ex post evidence of the joint economic and environmental impact of green stimulus measures remains very limited. Drawing on the lessons from the GFC, the paper underscores the importance of proper policy design, more realistic recognition of the potential trade-offs between economic, environmental and social objectives, and of building in impact evaluation mechanisms into green stimulus measures. The paper also highlights that COVID-19 is unfolding in a policy context that is very different from 2007 to 2008 and identifies new challenges as well as opportunities for greening the COVID-19 recovery.

DOI:10.1561/101.00000124