E3-Modelling work features on the report on the Costs and Benefits of Net Zero, for the UK Committee on Climate Change. The report used the GEM-E3 model of E3M to analyse the macro-economic impacts, costs and benefits of deep decarbonisation pathways, focused on the role of endogenous technical change and financial markets.
The report shows that the dynamics of technology, learning and scale effects lower the costs of low-carbon technologies over time, and may create completely new industries, that feed into new markets at home and abroad and strengthen industrial competitiveness thus mitigating the depressive impacts of higher energy costs. The headline message of the results from macro-economic models is that the costs of investing in deep decarbonisation are likely to be relatively small in the context of a growing economy, but the structural changes underlying these aggregate costs will be very large. The transition through these structural changes will need careful handling if they are to be politically acceptable. Re-training programmes, energy efficiency measures and compensation schemes for low-income and otherwise vulnerable people will need to be put in place to help people and businesses to adjust to the decline of some sectors as others are growing to take their place, and to potential short-term increases in energy prices
For the full report please visit the following link