 Using short-term scenarios to assess the macroeconomic impacts of climate transitionThomas Allen, Mathieu Boullot, Stéphane Dées, Annabelle De Gaye, Noëmie Lisack, Camille Thubin and Oriane Wegner Energy Economics, 2025, vol. 148, issue C Abstract: This paper proposes a set of short-term scenarios that reflect the diversity of climate transition shocks : increase in carbon and energy prices, increase in public or private investment in the low-carbon transition, increase in the cost of capital due to uncertainty, deterioration of confidence, accelerated obsolescence of part of the installed capital, etc. Using a suite-of-model approach, we assess the implications of these scenarios for the dynamics of activity and inflation. By considering multiple scenarios, we therefore account for the uncertainty around future political decisions regarding climate change mitigation. The results show that the magnitude and duration of the macroeconomic effects of the transition to carbon neutrality will depend on the transition strategy chosen. While a number of short-term scenarios are inflationary or even stagflationary, there are also factors that could curb inflation and boost economic growth. Keywords: Climate transition; Scenario analysis; Macroeconomic modeling (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:148:y:2025:i:c:s0140988325004906 DOI: 10.1016/j.eneco.2025.108663 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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