Cyclone Case Study Odisha 1999 Super Cyclone in India.
Session 2.3 edward barbier colorado state university
1. TECHNICAL EXPERT WORKSHOP ON
MODELLING THE IMPACT ON CIRCULAR ECONOMY
AND LOW CARBON
TRANSITIONS OF THE COVID-19 RECOVERY
PACKAGES, 13-14 April 2021
Session 2: Quantifying the impacts of recovery
packages on economic activity
Edward B. Barbier
Department of Economics, Colorado State University
2. Great Recession vs Post-Pandemic Recovery
Great Recession Stimulus 2009-
2010a
• $3.3 tn stimulus, $522 bn green
(16%)
• 2/3 of green stimulus on energy
efficiency ($335 bn) , “shovel-
ready” clean energy projects.
• Little impacts on deficits/debt.
• Little/modest pricing reforms
• Stimulus effects ended by 2012/3,
job creation and renewables
expansion, little de-carbonization
Post-Pandemic Recovery 2020-
2021
• $14.6 tn stimulus, $1.9 tn for long-
term recovery, $341 bn green (2.5%
and 18%)b
• 10% on energy efficiency ($35 bn),
35% on clean energy and transport
($121 bn), 8% on green R&D ($29 bn)b
• Global deficits of $30 trillion by 2023c
• Pricing reforms?
• Decarbonization requires:
• $300 bn/year additional spending to clean
energy.d
• Increased support for green R&Da
• Removal of fossil fuel subsidies and
carbon pricinga
Sources: a Barbier (2020a, 2020b); b O’Callaghan and Murdock (2021); c Assi et al. (2020) d Andrijevic et al. (2020).
3. Quantifying the impacts of recovery packages
• Two modeling scenarios
• Scenario 1: Existing green recovery packages
• Scenario 2: Full “decarbonization” packages (pricing reforms; increased
green R&D support; more clean energy investment).
• Net sectoral gains and losses
• Clean energy/transport gains, fossil fuels lose but what about other
sectors?
• Do any economies end up with a competitive “green race” advantage?
• LR multiplier effects
• If $1 spent today on green spending priorities, what are the economy-
wide $ gains in 5-10 years? (Batini et al. 2021).
• Deficits, debts and revenue spending effects
• Impacts of growing debts on spending under both scenarios.
• In Scenario 2, what are the pricing reform revenues spent on, and what
are the overall economic impacts?
4. References
• Andrijevic, M. 2020. "COVID-19 recovery funds dwarf clean energy investment
needs." Science 370(6514):298-300.
• Assi, R., de Calan, M., Kaul, A. and Vincent, A. (2020) Closing the $30 trillion gap: Acting
now to manage fiscal deficits during and beyond the COVID-19 crisis. McKinsey &
Company, July 2020
• Batini, N., M. Di Serio, M. Fragetta, G. Melina, and A. Waldron. 2021. “Building Back Better:
How Big are Green Multipliers?” IMF Working Paper WP/21/87. International Monetary
Fund, Washington, D.C.
• Barbier, E.B. 2020a. “Building a Greener Recovery: Lessons from the Great Recession.”
Covid-19 Green Recovery Working Paper Series. United Nations Environment Programme
(UNEP), Geneva, Switzerland. 5 October 2020.
https://greengrowthknowledge.org/guidance/building-greener-recovery-lessons-great-
recession
• Barbier, E.B. 2020b. “Greening the post-pandemic recovery in the G20.” Environmental
and Resource Economics 76:685-703 https://doi.org/10.1007/s10640-020-00437-w
• O’Callaghan, B.J. and E. Murdock (2021). “Are We Building Back Better? Evidence from
2020 and Pathways to Inclusive Green Recovery Spending?” United Nations Environment
Programme (UNEP), Geneva, Switzerland. 21 March 2021.
https://www.unep.org/resources/publication/are-we-building-back-better-evidence-2020-
and-pathways-inclusive-green