Macroeconomic and distributional consequences of net zero policies in the United Kingdom

Abstract

 ECO/WKP(2022)44Unclassified OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.Comments on Working Papers are welcomed, and may be sent to the Economics Department.

Impact of Carbon Neutrality on the Economy and Industry Assuming Japan’s Achievement of 2030 Power Mix Plan: A 2050 Perspective Based on the E3ME Macro-Econometric Model

“…On the other hand, Pareliussen et al [21] analyzed the impact of a carbon-neutral policy on the UK's economy using a CGE model (ThreeME) and found positive results by returning carbon tax revenue directly to households. Similarly, Simon et al [22] used the Climate Policy Assessment Tool (CPAT) to suggest that utilizing carbon tax revenues for productive investment, instead of other revenue recycling methods, may lead to positive GDP outcomes under a carbon neutrality context.…”

Climate Policy and Global Challenges: A Monetary Policy Perspective

“…Del Negro et al ( 2023) also finds that climate policies may generate a trade-off for central banks, between inflation and output objectives, which depends on the type of policy, and also flexibility of prices in brown and green industries respectively. A recent deep dive into strategies towards achieving the climate transition in the UK comes from the OECD (OECD, 2022), with a more explicit consideration of alternative carbon taxes within detailed macroeconomic scenarios in Pareliussen et al (2022). Among the conclusions of this extensive assessment is that a high carbon price significantly reduces emissions.…”