An assessment of different transition pathways to a green global economy

Abstract

Transitioning to a green economy is urgently needed to achieve the climate targets by the end of this century. Here we investigate alternative pathways for the transition of the global economy from one dominated by the fossil-fueled (brown) sector to one dominated by the low-emission (green) sector. We modify a well-known integrated assessment model of climate change and economy to consider three transition pathways: Linear, Delayed, and Fast. Our results indicate that the main burden of the green transition lies on capital formation, accumulation, and transfers facilitated by full R&D investment in the green sector’s productivity. We also find that transition pathways rely on different mechanisms to achieve their targets. The Delayed pathway relies on the combination of higher green capital investment and an increase in green capital productivity through R&D investment, while the Fast pathway requires substantial transfers of capital from the brown sector coupled with high abatement efforts.