Looking-forward to Net Zero: How Agent's Expectations and Policy Choices Drive Economic Outcomes in Climate Scenarios

Edmund Cornforth, Lea De Greef and Patricia Sánchez Juanino

No 567, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research

Abstract: This paper explores the sensitivity of the macroeconomic impacts of climate change scenarios to underlying assumptions about the policy environment and agent responses. Using the National Institute Global Econometric Model (NiGEM), we analyse the Net Zero long-term scenario developed by the Network for Greening the Financial System (NGFS) modifying the different assumptions related to agent expectations, monetary policy reactions, and fiscal recycling mechanisms. We assess how these options influence the economic outcomes of the transition to net zero.

Keywords: NiGEM; macroeconomic model; expectations; net zero scenario; NGFS; monetary policy; fiscal policy (search for similar items in EconPapers)
JEL-codes: E17 E70 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-ene
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