Green Keynesianism and an analysis of Green Keynesian tools by panel data method: Example of OECD countries

Green Keynesianism is a contemporary approach that aims to solve the problems experienced in employment as well as environmental problems under the leadership of the public sector. According to Green Keynesianism, sustainable policies should be implemented in order to solve these complex and intertwined problems at the same time. Areas such as renewable energy, eco-industry and energy efficiency are key to Green Keynesianism. Green Keynesianism proposes the use of various tools in order to reach the zero carbon target by increasing public and private sector investments in these areas. In order to evaluate the effectiveness of these tools, the 26-year period of 37 OECD countries covering the years 1994- 2019 was analyzed with the panel data method. According to the results of the analysis, it is seen that environmental taxes and renewable energy have a positive effect on reducing carbon emissions, while the other variable in the model, GDP, causes an increase in carbon emissions. Therefore, the approach of fossil fuel based growth should be abandoned quickly and investments in renewable energy and energy efficiency areas should be increased. The resources needed to finance these investments should be provided using Green Keynesian instruments such as stopping fossil fuel subsidies and issuing publicly led green bonds. Keywords: Green Keynesianism, Green new deal, Climate change, Environmental tax, Renewable energy