Public finance is one of the most powerful tools at our disposal to accelerate global progress toward net-zero economies, yet far too little has been done to optimize its ability to drive decarbonization. Both public expenditure and private capital markets will be required to transform the global economy, but strategic use of public expenditure can catalyze the development, deployment, and dissemination of essential low-carbon technologies from basic research to worldwide commercialization. This is especially true in the COVID-19 era as governments undertake fiscal and economic stimulus measures to “build back better.”
The prevailing approach to allocating public expenditures for decarbonization has been mostly haphazard, slowing progress and introducing excessive costs into the future. Hamstrung by institutions and decision-making tools that are not built to approach expenditures holistically, the status quo lends itself to short-sighted, siloed, and uncoordinated public finance interventions. Domestically and internationally, governments lack a cohesive approach to answer an obvious question: What is the best way to spend taxpayers’ marginal green dollar in service of global decarbonization?
Recasting the Golden Key: How Public Finance Can Unlock a Critical Decade of Climate Action looks inside the “black box” of decarbonization to show how the pace of global decarbonization can be accelerated and the cost can be reduced based on how and when nations choose to invest precious taxpayer resources. The report explores how, given the complexity of these investments, integrated support for technology development and deployment can be a helpful organizing tool for governments to allocate expenditures that impact decarbonization. Readers can also explore how different spending approaches affect decarbonization using our spreadsheet simulation.