Structural change and socio-economic disparities in a net zero transition

Cormac Lynch, Yeliz Simsek, Jean-Francois Mercure, Panagiotis Fragkos, Julien Lefèvre (), Thomas Le Gallic (), Kostas Fragkiadakis, Leonidas Paroussos, Dimitris Fragkiadakis, Florian Leblanc and Femke Nijsse
Additional contact information
Cormac Lynch: Global Systems Institute [Exeter] - University of Exeter
Yeliz Simsek: ANU - Australian National University
Jean-Francois Mercure: The World Bank - The World Bank, Global Systems Institute [Exeter] - University of Exeter, CAM - University of Cambridge [UK]
Panagiotis Fragkos: E3-Modelling
Julien Lefèvre: CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique
Thomas Le Gallic: CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique
Leonidas Paroussos: E3-Modelling
Dimitris Fragkiadakis: E3-Modelling
Florian Leblanc: CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique
Femke Nijsse: Global Systems Institute [Exeter] - University of Exeter

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Abstract: A net zero transition is likely to generate substantial and irreversible economic transformation. High-carbon industries and their related occupations will disappear, while new low-carbon industries and occupations will be created. In the aggregate, the impact of the transition on GDP and employment is commonly projected to be relatively moderate. However, such estimates hide drastic distributional issues that are sectorally and regionally concentrated. We use three sectorally detailed and regionally disaggregated macroeconomic models to explore the possible levels and impacts of structural change in a well below 2°C scenario. In addition to the expected decline in the carbon-intensive industries, we observe secondary impacts, particularly in the services sectors, that vary significantly between models. The risks entailed with structural change involve worsening economic disparity and societal division that could exacerbate existing socioeconomic and political polarisation. Impact assessments of decarbonisation should consider such distributional issues to avoid post-industrial decline and widening socioeconomic inequalities.

Keywords: Structural change; Post-industrial decline; Multi-sectoral macroeconomic modelling; Climate policy (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ene and nep-env
Note: View the original document on HAL open archive server: https://hal.science/hal-04824037v1
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Published in Economic Systems Research, 2024, 36 (4), pp.607-629. ⟨10.1080/09535314.2024.2371306⟩

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Journal Article: Structural change and socio-economic disparities in a net zero transition (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04824037

DOI: 10.1080/09535314.2024.2371306

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