The Economic Opportunity Cost of Green Recovery Plans

29 Pages Posted: 21 Feb 2023

See all articles by Timothy Fitzgerald

Timothy Fitzgerald

Texas Tech University; Independent

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: February 13, 2023

Abstract

Advocates in several countries have promoted a “green recovery” from the pandemic, with an emphasis on measures to address climate objectives. We evaluate proposals for the United States and find that as stated, ambitious plans to further cut emissions from transportation and electricity will require more inputs to produce the same outputs, resulting in recurring costs of up to $483 billion per year. We forecast that real GDP and consumption will be 2-3 percent less in the long run if policies are implemented as stated, underscoring the opportunity costs of achieving green objectives when resources might be more efficiently deployed.

JEL Classification: Q40,Q48,Q54,Q58

Suggested Citation

Fitzgerald, Tim and Mulligan, Casey B., The Economic Opportunity Cost of Green Recovery Plans (February 13, 2023). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2023-22, Available at SSRN: https://ssrn.com/abstract=4362335 or http://dx.doi.org/10.2139/ssrn.4362335

Tim Fitzgerald

Texas Tech University ( email )

2500 Broadway
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Independent ( email )

Casey B. Mulligan (Contact Author)

University of Chicago ( email )

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Chicago, IL 60637
United States
773-702-9017 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

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