The macroeconomics of climate change mitigation
Stringent mitigation scenarios aimed at limiting global warming to 1.5°C are right at the edge of what is economically feasible and will require a radical transformation of the whole economy, not just the energy supply sector.
However, the macroeconomics of that transition are highly uncertain, with many different moving parts. While some studies see the move away from fossil fuels as negative for growth, advocates of green development have argued that the investment needed for the clean energy transition will boost jobs and growth.
What you will learn:
- The impact on growth will depend on how the energy transition is financed and whether investment in new technology can boost long-run potential growth.
- The other big uncertainty is over the future price of electricity. Continued technological improvements in renewables may offer the prospect of cheaper energy.
- Moreover, market mechanisms such as carbon pricing can only take us so far. The clean-energy transition is also likely to require significant levels of government intervention.
Tags:
Related Services
Post
Eurozone: ECB minutes indicate that July rate hike is a near-certainty
The minutes from the April ECB meeting confirm the hawkish tilt initiated a few months ago continues to gain momentum. With a majority of the council increasingly concerned about the inflation outlook, this makes an interest rate hike already in July almost certain. This should not come as a surprise, however, as recent developments render hawks' case arguably easier to make.
Find Out More
Post
For how long will Japan’s households support bonds and the yen?
Households' financial surpluses sharply increased in 2020 and remained high in 2021 due to the Covid pandemic. Most of the surplus continued to go to cash and deposits, but there was a notable increase in funds going to investment trusts (with a large portion invested in foreign equities) in 2021. Amid rising international yield differentials and a weakening yen, there is market chatter about whether this is the beginning of a structural shift from households' risk-averse investment style?
Find Out More