Proceedings of a Workshop

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International Standard Book Number-13: 978-0-309-73466-0
International Standard Book Number-10: 0-309-73466-5
Digital Object Identifier: https://doi.org/10.17226/29050

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Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2025. Macroeconomic Implications for Decarbonization Policies and Actions: Proceedings of a Workshop. Washington, DC: The National Academies Press. https://doi.org/10.17226/29050.

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PLANNING COMMITTEE FOR MACROECONOMIC IMPLICATIONS OF DECARBONIZATION POLICIES AND ACTIONS: A WORKSHOP

SANYA R. CARLEY (Co-Chair), Presidential Distinguished Professor of Energy Policy and City Planning, University of Pennsylvania

JEAN-FRANCOIS MERCURE (Co-Chair), Associate Professor, University of Exeter

JAMES A. EDMONDS, Chief Scientist and Battelle Fellow, Pacific Northwest National Laboratory, and College Park Professor of Public Policy, University of Maryland, College Park

MARC HAFSTEAD, Fellow, Resources for the Future

PAULINA JARAMILLO, Professor, Carnegie Mellon University

DIEGO KÄNZIG, Assistant Professor, Northwestern University, Faculty Research Fellow, National Bureau of Economic Research, and Research Affiliate, Centre for Economic Policy Research

WEI PENG, Assistant Professor, Princeton University

National Academies of Sciences, Engineering, and Medicine Staff

KATRINA HUI, Associate Program Officer

BRIDGET ANN McGOVERN, Program Officer (until October 2024)

BRENT HEARD, Senior Program Officer

ANNE MANVILLE, Senior Program Assistant

DANIEL TALMAGE, Program Officer (until December 2024)

Reviewers

This Proceedings of a Workshop was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies of Sciences, Engineering, and Medicine in making each published proceedings as sound as possible and to ensure that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the charge. The review comments and draft manuscript remain confidential to protect the integrity of the process.

We thank the following individuals for their review of this proceedings:

JOHN BISTLINE, Electric Power Research Institute

CRISTINA PEÑASCO, Banque de France and University of Cambridge

Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the content of the proceedings nor did they see the final draft before its release. The review of this proceedings was overseen by KENNETH GILLINGHAM, Yale University. He was responsible for making certain that an independent examination of this proceedings was carried out in accordance with the standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the rapporteurs and the National Academies.

We also thank staff member Jasmine Victoria Bryant for reading and providing helpful comments on this manuscript.

Contents

OVERVIEW

INTRODUCTION

CURRENT PROGRESS

Keynote: Taking Stock of Energy Transition Research

Keynote: The Decarbonization Trajectory

Discussion

ECONOMIC RISKS AND OPPORTUNITIES OF DECARBONIZATION

Insights on Economic Impact and Financial Sector Resilience

On the Outcomes and Trade-offs of Decarbonization Policy Instruments

Addressing the Role of Uncertainty in Understanding Risks

Current U.S. Policy Solutions and Remaining Challenges

Discussion

BARRIERS TO DECARBONIZATION AND SOLUTIONS

Institutional Barriers to Decarbonizing the Electric Grid

Political Barriers to Decarbonization Among the Public and Industry

Opportunities to Overcome Barriers and Accelerate Decarbonization

The Role of Financing and Demand in Addressing Uncertainty and Supporting Decarbonization Solutions

Discussion

MODELING OPPORTUNITIES AND CHALLENGES

Keynote: Modeling Decarbonization

Discussion

INCORPORATING MODELING INSIGHTS INTO POLICY DESIGN

Using Integrated Assessment Models to Improve Policy Realism

Capabilities and Trade-offs of Advanced Modeling Approaches

Integrating Endogenous Innovation into Climate Macroeconomic Models

Lessons from Country-Based Modeling of Low-Emission Paths

Discussion

GLOBAL INTERACTIONS

Industrial Decarbonization in the United Kingdom

Global and Industry-Wide Enablers of Industrial Decarbonization

Decarbonization Strategies in Asia

Carbon Border Adjustment Mechanisms

Cross-Border Risks and Opportunities in the Clean Energy Transition

Discussion

BREAKOUT DISCUSSIONS

Stakeholders

Research and Policy Synergy

Regional Differences and Barriers

Academic Engagement and Global Decarbonization

REFLECTIONS

Recurring Themes: Optimism, Consensus, Pragmatism, Interdisciplinarity

Examples of Key Challenges and Solutions

Potential Directions for Future Research

REFERENCES

APPENDIX A: STATEMENT OF TASK

APPENDIX B: WORKSHOP AGENDA

APPENDIX C: PLANNING COMMITTEE BIOGRAPHIES

APPENDIX D: POSTER ABSTRACTS

Acronyms and Abbreviations