Government Interventions and Spending

Environmental problems are caused and exacerbated by market and policy failures.  Governments must intervene to correct these failures and address behavioural barriers to net zero sustainable development. Our research analyses how economic policy (for example post-Covid recovery spending) is affecting the environment, and how environmental policies (such as carbon pricing and technology subsidies) are affecting both environmental and economic outcomes.


  • The empirical evaluation of climate change policies (jointly with Climate Econometrics)
  • The environmental characteristics of fiscal policy 
  • Building resilience against climate, health and economic shocks (as part of the Climate Compatible Growth project)
  • Providing essential information on climate change and biodiversity to decision makers (through the Agile Initiative)

Research highlights

Hepburn, C., O’Callaghan, B., Stern, N., Stiglitz, J. and Zenghelis, D., 2020. Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?. Oxford Review of Economic Policy, 36(Supplement_1), pp.S359-S381.  

Eskander, S.M. and Fankhauser, S., 2020. Reduction in greenhouse gas emissions from national climate legislation. Nature Climate Change, 10(8), pp.750-756.

Klenert, D., Mattauch, L., Combet, E., Edenhofer, O., Hepburn, C., Rafaty, R. and Stern, N., 2018. Making carbon pricing work for citizens. Nature Climate Change8(8), pp.669-677.