On 8 April 2022, researchers of the seed grant project on 'How to Finance Climate Change Policies' will present their work to the Leiden Political Economy Group (L-PEG) and GTGC's Economy and Ecology thematic areas during a research seminar. The title of the presentation is 'How to Finance Green Investments? The Role of Public Debt'. You can find the abstract below. If you would like to join this research seminar, please contact Crystal Ennis or Shiming Yang.  

Abstract

The transition towards a net-zero emissions economy requires mobilization of large (additional) investments in green infrastructure. Some of these investments must be financed by governments due to their public goods characteristics. How will governments generate funds to finance these additional investments without triggering public backlash? In this study, we ask if public support for green investments grows if these investments are financed via sovereign borrowing rather than taxation or cuts in other spending categories. Relatedly, we investigate whether raising concerns about public debt make the public less willing to support green investments financed through public debt. The results from the pilot study suggest that public is more supportive of green investments if they are financed through public debt rather than from broad-based taxes, yet at the same time the public is more supportive of investments financed through narrow and targeted taxes. Our preliminary results also suggest that negative framing of public debt decreases support for green investments financed through government borrowing.