The short-run macroeconomics of the energy transition: a review and directions for research

Abstract

The global transition to a decarbonized energy system will be as consequential as it is necessary to avoid substantial warming. The transition will reshape the global energy sector and fundamentally transform the role of fossil fuel production and use in the economy. These vast changes introduce significant risks for short-run macroeconomic performance, and those risks are increasing as climate change and the energy transition accelerate.