Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333478 
Year of Publication: 
2025
Series/Report no.: 
IMK Policy Brief No. 197
Publisher: 
Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK), Düsseldorf
Abstract: 
This policy brief presents simulation results regarding the macroeconomic effects of a green EU public investment fund using the macroeconometric simulation model NiGEM. After briefly outlining the investment needs in the EU, we first present results using the standard version of NiGEM. We then extend the simulations in the main sections of the Policy Brief by taking climate change into account. By applying the climate version of NiGEM, we simulate various policy scenarios of the Network for Greening the Financial System (NGFS), both with and without an EU investment fund. Our results show considerable negative impacts on GDP, along with inflationary effects arising from CO2-taxation alone. Accounting for climate change and the corresponding long-term damage to GDP, however, our results show that not acting on climate change now causes far more severe damages in the future. A debt-financed EU investment fund would help - besides from faster promoting the greening of the European economies - by cushioning the negative transitory GDP effects in the next ten years, without risking debt sustainability. Finally, our results highlight the importance of cooperation such that climate change policies are implemented on a global level.
Subjects: 
EU investment fund
green investment
public investment
climate policy
climate change
Creative Commons License: 
cc-by Logo
Document Type: 
Research Report

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.