Newly updated nationally determined contributions: Implications for the global energy transition

Trang Tran, Duy Nong, George Verikios, Ray Marcos-Martinez, Yingying Lu and Heinz Schandl

Economic Analysis and Policy, 2025, vol. 85, issue C, 1816-1829

Abstract: We employ the Global Trade Environment Model-Food to investigate the impact of the latest Nationally Determined Contributions (NDCs) on global and regional economies and energy systems. Findings indicate that achieving conditional NDC results in higher global economic losses (−1.17 % in real GDP in 2030) than unconditional NDCs (−0.96 %). For energy, global fossil fuel outputs are estimated to decline considerably relative to the baseline (e.g. −25 % for coal, −16 % for oil and gas and −15 % for petroleum under conditional NDC by 2030). Carbon prices induce the share of global coal-fired electricity to decline from 27 % and 13 % in the 2030 and 2050 baselines to 19 % and 6 % in conditional NDCs, respectively, which is partly compensated by the expansion of renewable-based electricity. Additionally, major developing economies, such as China and India, can substantially reduce their reliance on coal-fired power technology from 62 %–64 % in 2030 to 7 %–14 % in 2050. Strategic implementation of an energy-efficient policy is prominent, resulting in a 0.85 % loss in global real GDP by 2030. The benefits of such improvements to GDP growth vary across countries.

Keywords: Nationally determined contributions targets; Carbon prices; Paris agreement; climate change; energy efficiency; GTEM-Food model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:85:y:2025:i:c:p:1816-1829

DOI: 10.1016/j.eap.2025.02.017

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