“The transition to carbon neutrality will have positive but relatively modest long-term economic effects”

StWhat impact will the transition to carbon neutrality have on our country’s growth and economic dynamics? Are there several ways to achieve this? To answer these questions, Adem simulated the macroeconomic effects of four “Transition(s) 2050” scenarios he developed. This combines, in varying proportions, the use of low-carbon energies, vigilance and technical progress to achieve carbon neutrality by mid-century. Several lessons can be drawn from this.

First: financing needs are highly dependent on the transition scenarios chosen. Organized vigilance requires significantly less investment than achieving the goal of increasing all economic activity, with the development of carbon capture and storage technologies still uncertain. The additional investments required for the transition may be relatively modest, as most of them will initially replace “brown” investments. Transitional or not, households and businesses will continue to invest in replacing their cars, boilers or production equipment.

While the total volume of investments should remain stable on average annually by 2050, the share of climate-friendly investments should double to reach €85 billion annually by 2050 in the most favorable scenario. Sober and 133 billion in the case that excludes. Any form of vigilance.

They are given first to households (electric cars, energy renovation), then to companies (renewable energies, renovation of tertiary buildings, energy efficiency in industry, public transport) and finally to the public sector (insulation of buildings, renewable heating networks). , public transport and charging stations, etc.). Consequently, the transition should not cause any significant stress on capital markets. However, an adaptive monetary policy is necessary.

Separation between GDP and CO₂

Second lesson: If the public share of carbon-free investment remains low, the state will inevitably have to pay significant public aid to stimulate private investment, on average €10 to €15 billion per year by 2050, depending on the scenarios.

Millions of families are unable to use bank credit to finance repairs or buy a new car. Many companies have problems with access to finance. In the absence of a high carbon price, industry needs subsidies to meet decarbonisation targets. Therefore, government spending should increase.