Environment

David Popp, Francesco Vona, Joëlle Noailly, 04 July 2020

Many governments worldwide are currently considering fiscal recovery packages to address the Covid-19 crisis. This column analyses the impact of past green fiscal stimulus on employment. Focusing on the American Recovery and Reinvestment Act after the Global Crisis, it finds that that the green stimulus was particularly effective in creating jobs in the long run, but not in the short run. Hence, while green stimulus packages are useful to reorient the economy and direct it onto a green trajectory in the longer run, they are less effective in restarting the economy quickly.

Ross Levine, Chen Lin, Zigan Wang, 14 June 2020

There is ample evidence of the negative effects of pollution on health, with about one in six deaths worldwide attributed to air pollution. However, the effect of one firm’s toxic emissions on neighbouring firms’ employees and profits are not known. This column examines whether opening toxic pollution-emitting plants affect the career paths of executives at S&P 1500 firms in the US. The opening of such plants triggers substantial increases in executive migration from neighbouring firms. Corporations exposed to toxic emissions from other firms lose talented individuals and suffer stock-price declines.

Christian Kroll, 09 June 2020

Concerns are growing that the COVID-19 crisis could be exploited by populists claiming to be the voice of those who have been ‘left behind’. This column presents a new framework which could help shed light on the relationship between sustainable development and populism. Progress on the Sustainable Development Goals may be associated with diminishing electoral support for populism, but humanity must still get better at turning the trade-offs between SDGs into synergies. During the COVID-19 recovery, an effective way to prevent populists from exploiting the crisis may involve making the SDGs the policy blueprint. 

Jennifer Castle, David Hendry, 04 June 2020

The UK’s 2008 Climate Change Act has led to a 34% fall in CO2 emissions by 2019, while real GDP per capita had risen by more than 10% following the crash into the ‘Great Recession’. Can the UK achieve its recent net-zero emissions target by 2050 while still growing? This column describes some speculative routes to such a decarbonised future.

Bernard Hoekman, Douglas Nelson, 08 May 2020

Prior to the re-emergence of tariff nationalism as espoused by the Trump administration, subsidies were becoming a central source of trade tensions between major economies. The prospect of trade conflicts associated with the use of such instruments to combat climate change was increasing. Policy responses to the COVID-19 pandemic have led to a massive increase in subsidisation of firms in many countries. This column argues for a revisit of current approaches to addressing subsidy conflicts. The need for cooperation between the major economies to manage the international competitive spillovers of subsidies was evident pre-COVID-19. It has now become much more urgent.

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