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urn:uuid:660325d3-5730-426e-b900-eee7a7a6fa4c 03 01 01 urn:uuid:660325d3-5730-426e-b900-eee7a7a6fa4c 15 9781800649071 06 10.11647/OBP.0328 00 EB E107 10 Creative Commons License 02 https://creativecommons.org/licenses/by-nc/4.0/ 01 01 Greening Europe 2022 European Public Investment Outlook 1 B01 21 0000-0001-9972-716X Floriana Cerniglia 2 B01 21 0000-0003-0121-4329 Francesco Saraceno 01 eng 00 244 03 10 BUS036000 B2 Economics 20 European Public Investment Outlook 04 GE190.E85 12 K 10 BUS032000 B2 European Studies 12 KFFM 20 public investment 12 1QFE 10 BUS051000 20 green ventures B2 Politics and Sociology 20 international organizations 10 POL044000 12 RND 20 International Monetary Fund 20 European Investment Bank 20 European Commission 20 academic departments 20 policy institutes 20 economy 20 sustainable path 03 00 The third installment of the ‘European Public Investment Outlook’ series is an important and timely publication that draws together recent analyses to recommend significant increases in public investment in green ventures. Compelling data from key economists affiliated with international organizations like the International Monetary Fund, European Investment Bank and the European Commission, as well as academic departments and policy institutes are a clarion call for green investment to boost the economy and put the planet on a sustainable path.Like its predecessors, the book presents the issues in a lucid and navigable manner. Part I explores the EU’s current levels of green public investment, as well as the challenges ahead in achieving net zero carbon emissions after years of decreasing funding and the obstacles presented by the COVID-19 pandemic and the Russian invasion of Ukraine. The public investment trends of France, Germany, Italy and Spain are systematically evaluated, as well as the REPowerEU policy – accelerated in Spring 2022 – to move away from Russia’s supply of fossil fuels. Part II focuses on the investment needed for green transition; the important economic and fiscal effects and benefits this would bring; and the reality of what is required before 2030 to achieve the EU’s carbon-neutral targets by 2050.Greening Europe is essential reading for economists, environmentalists, and policymakers. It should also be of interest to anyone who wants to understand the cost implications of the ‘carbon-neutral’ policies that governments have promised, and the urgent need to change our approach towards energy usage. 04 00 Acknowledgements xi Preface xiii Franco Bassanini, Alberto Quadrio Curzio, and Xavier Ragot Introduction xvii Floriana Cerniglia and Francesco Saraceno References xxv Part I: Outlook 1 1. Challenges for Public Investment in the EU: The Role of Policy, Energy Security and Climate Transition 3 Andrea Brasili, Atanas Kolev, Debora Revoltella, and Jochen Schanz Introduction 3 1.1 Public Investment in the EU: Trends and Outlook 4 1.4 Capital Transfers Are Set to Remain above Average 12 1.5 Security of Energy Supply and the Climate Transition 13 1.6 Energy Dependence Indicators 13 1.7 Improving Security of Energy Supply in the EU: REPowerEU 17 1.8 Conclusion 20 References 21 2. Public Investment and Low-carbon Transition in France: Not Enough of a Good Thing? 23 Meriem Hamdi-Cherif, Paul Malliet, Mathieu Plane, Frederic Reynes, Francesco Saraceno, and Alexandre Tourbah Introduction 23 2.1 Public Investment before the Pandemic: On a Downwards Trend since 2010 23 2.2 Public Investment during the Pandemic 29 2.3 Challenges and Perspectives of Low-carbon Investment: The Case of Infrastructures 30 2.4 Modelling Framework: The ThreeME Model 34 2.5 Macroeconomic Consequences of Additional Investment in Low-carbon Infrastructure 34 Conclusion 38 References 39 3. Public Investment in Germany: Squaring the Circle 41 Katja Rietzler and Andrew Watt 3.1 A Decade of Investment 41 3.2 Some Progress since 2019 42 3.3 War in Ukraine and High Inflation 44 3.4 Stability Programme Suggests that Additional Investment Is Mostly Military 45 3.5 The Critical Issue of Local Government Financing 47 3.6 The German Recovery and Resilience Plan 49 3.7 The Way to Sufficient Investment Spending 50 References 51 4. NRRP—Italy’s Strategic Reform and Investment Programme: Sustaining an Ecological Transition 55 Giovanni Barbieri, Floriana Cerniglia, Giuseppe F. Gori, and Patrizia Lattarulo Introduction 55 4.1 Public Investment and the NRRP-Italian Public Works Schedule 56 4.2 Ecological Transition and Green Investments in the Italian NRRP 60 4.3 Related Reforms 65 4.4 Multilevel Governance and the Role of Local Governments 66 4.5 Conclusions 68 References 70 5. Current Challenges in the Spanish Energy Market 71 José Villaverde, Lucía Ibáñez Luzon, Daniel Balsalobre-Lorente, and Adolfo Maza Introduction 71 5.1 Evolution of the Spanish Energy Sector: A Retrospective Review 71 5.2 Public Policies for a Green Transition (2020–2030) 75 5.3 Current Scenario after the COVID-19 Pandemic and the Russian Invasion of Ukraine 79 5.4 REPowerEU 80 5.5 Final Conclusions and Policy Recommendations 83 References 84 Part II: Challenges 85 6. How Big Are Green Spending Multipliers? 87 Nicoletta Batini, Mario Di Serio, Matteo Fragetta, Giovanni Melina, and Anthony Waldron Introduction 87 6.1 Results 88 6.2 Green Energy versus Non-Green Energy Spending Multipliers 89 6.3 Green Land Use versus Non-Green Land Use Multipliers 91 6.4 Conclusions 93 References 94 7. Europe’s Green Investment Requirements and the Role of Next Generation EU 97 Klaas Lenaerts, Simone Tagliapietra, and Guntram B. Wolff Introduction 97 7.1 Overall Priorities 98 7.2 A More Detailed Examination 100 7.3 Conclusion 104 References 105 8. The Public Spending Needs of Reaching the EU’s Climate Targets 107 Claudio Baccianti Introduction 107 8.1 A Sectoral View of the Public Spending Needs in the EU 108 8.2 Conclusion 124 References 125 9. The Investment Needs for REPowerEU 129 Miguel Gil Tertre and Bert Saveyn Introduction 129 9.1 Drivers of Natural Gas Demand Reduction in REPowerEU 131 9.2. Investment Needs 132 9.3 Why Should the Potential for Natural Gas Reduction Be Higher than 155 bcm? 140 9.4 Conclusion 141 References 142 Annex on Price Trajectories between 2020 and 2050 for Gas, Oil and Coal 142 10. Public Spending for Future Generations: Recent Trends in EU Countries 145 Lorenzo Ferrari and Valentina Meliciani Introduction 145 10.1 GFCF and EFG in the EU 147 10.2 Trends in the EFG in the EU and Comparisons with the GFCF 148 10.3. Comparative and Absolute Advantage: International Comparisons 156 10.4 Conclusions and Policy Considerations 162 References 164 11. Assessing the Quality of Green Finance Standards 165 Xi Liang and Hannah Gao 11.1 What Are Green Finance Standards? 166 11.2 What Are the Differences between Green Finance Standards? 170 11.3 Nuclear and Natural Gas as Green Investments? 171 11.4 Does Green Finance Product Deserve Public Financial Incentive? 172 References 175 12. Green Investments: Two Possible Interpretations of the “Do No Significant Harm” Principle 177 Claudio De Vincenti Introduction 177 12.1 The DNSH Principle in the EU Documents 177 12.2 An Evaluation: The Need to Get out of an Impasse 179 12.3 An Open Mind Approach to the DNSH Principle 182 12.4 The War, REPowerEU and Taxo4 183 12.5 We Need a Flapping of Wings 185 References 185 13. Towards a Socially Just Green Transition: The Role of Welfare States and Public Finances 187 Cinzia Alcidi, Francesco Corti, Daniel Gros, and Alessandro Liscai Introduction 187 13.1 The EU Initiatives to Address the Socio-Ecological Transition 189 13.2 How to Tackle the Persisting Social Infrastructural Gap in the EU 190 13.3 A European Golden Rule for Social Investment 192 13.4 Amortisation of Public Investments 195 13.5 Conclusions 196 References 197 Contributor Biographies 201 List of Illustrations 211 List of Tables 213 20 00 Open Access Open Book Publishers 01 Open Book Publishers Cambridge, UK 04 01 20221207 13 15 9781800649064 09 Open Book Publishers 29 Publisher's website: download the title https://books.openbookpublishers.com/10.11647/obp.0328.pdf 99 01 09 Open Book Publishers 02 Publisher's website: web shop https://www.openbookpublishers.com/books/10.11647/OBP.0328 99 01