Green Stimulus in a Post-pandemic Recovery: the Role of Skills for a Resilient Recovery
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Green Stimulus in a Post‑pandemic Recovery: the Role of Skills for a Resilient Recovery Ziqiao Chen1 · Giovanni Marin2,3 · David Popp1,4 · Francesco Vona5,6,7 Accepted: 9 July 2020 / Published online: 4 August 2020 © Springer Nature B.V. 2020
Abstract As nations struggle to restart their economy after COVID-19 lockdowns, calls to include green investments in a pandemic-related stimulus are growing. Yet little research provides evidence of the effectiveness of a green stimulus. We begin by summarizing recent research on the effectiveness of the green portion of the 2009 American Recovery and Reinvestment Act on employment growth. Green investments are most effective in communities whose workers have the appropriate “green” skills. We then provide new evidence on the skills requirements of both green and brown occupations, as well as from occupations at risk of job losses due to COVID-19, to illustrate which workers are most likely to benefit from a pandemic-related green stimulus. We find similarities between some energy sector workers and green jobs, but a poor match between green jobs and occupations at risk due to COVID-19. Finally, we provide suggestive evidence on the potential for job training programs to help ease the transition to a green economy. Keywords Green subsides · Green stimulus · American Recovery and Reinvestment Act · Heterogeneous effect · Distributional impacts JEL Classification E24 · E62 · H54 · H72 · Q58
* David Popp [email protected] 1
Syracuse University, New York, USA
2
University of Urbino Carlo Bo, Urbino, Italy
3
SEEDS, Urbino, Italy
4
NBER, Cambridge, USA
5
OFCE Sciences-Po, Paris, France
6
SKEMA Business School, Université Côte d’Azur, Valbonne, France
7
CMCC, Ca’ Foscari, Venice, Italy
13
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Z. Chen et al.
1 Introduction Nations around the world have shut down large portions of their economy in response to the COVID-19 pandemic. Government spending will be important to both maintain the economy during these shutdowns and to help restart the economy as restrictions are lifted. Among the many proposals for pandemic-related stimuli include calls for a “green” stimulus that both restarts the economy and helps it transition to a cleaner, more sustainable path (e.g. Helm 2020, Agrawala et al. 2020).1 Notably, the new European Commission puts the green fiscal stimulus at the center of its growth strategy to achieve social, economic, and environmental goals. The European Green Deal (EGD henceforth) is “a new growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use” (European Commission 2019, p. 2). Funding for the EGD will be expanded in the context of the COVID-19 plans within the Recovery Plan for Europe (Next Generation EU, €750 billion for 2021–2014) and the reinforced long-term EU budget (€1.1 trillion for 2021–2027), approved on May 27th,
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