Putting the green back in greenbacks: opportunities for a truly green stimulus

Can countries reorient their productive capacity to become more environmentally friendly and inclusive? To investigate this question this paper uses a standard Input-Output modeling framework and data from 141 countries and regions to construct a new global dataset of employment, value-added, greenhouse gas (GHG) emissions (disaggregated into CO2 and Non-CO2 elements), and air pollution (including nine categories of air pollutants such as PM2.5) multipliers from supply side investments. We find that many of the traditional sectors in agriculture and industry have large employment multipliers, but also generate male dominant, lower skill employment, and tend to have higher emission multipliers. It is in economies dominated by these sectors that trade-offs to a 'greener' transition will emerge most sharply. However, we find a substantial heterogeneity in outcomes, so even in these economies, there exist other sectors with high employment multipliers and low emissions, including sectors that are more conducive to female employment. In addition, we find a high correlation between industries that generate GHG emissions, which cause long term climate impacts, and those that generate air pollution, which have immediate harmful impacts on human health, suggesting that policies could be designed to simultaneously confer longer climate benefits with immediate health improvements. Our results confirm some of the findings from recent research and shed new light on opportunities for greening economies.

Automated summary

This paper investigates the possibility of countries reorienting their production capacity to become more environmentally friendly and inclusive. Using a standard Input-Output modeling framework and data from 141 countries and regions, the authors construct a new global dataset on employment, value-added, greenhouse gas (GHG) emissions, and air pollution. The findings suggest that while traditional sectors in agriculture and industry have large employment multipliers, they also generate higher emissions. However, there is heterogeneity in outcomes, with other sectors having high employment multipliers and low emissions, including sectors that are more conducive to female employment. Furthermore, the study highlights the correlation between industries generating GHG emissions and those generating air pollution, suggesting potential for policies that provide both climate benefits and immediate health improvements.