Previous Chapter: Front Matter
Suggested Citation: "Overview." 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. doi: 10.17226/29050.

Overview

Decarbonization brings both risks and opportunities to the macroeconomy. Achieving net-zero emissions by mid-century may involve sweeping changes in technologies, policies, and systems, and the ways in which these changes are implemented may have profound impacts on communities, industries, economies, and nations. How can the interactions between decarbonization strategies and the macroeconomy inform public policy? What economic barriers may impede progress, and what role can policy play in addressing those barriers? What methods are most useful for understanding the challenges and opportunities of the different available options?

The National Academies of Sciences, Engineering, and Medicine, under the auspices of the Roundtable on Macroeconomics and Climate-related Risks and Opportunities, convened a workshop1 on September 12-13, 2024, to elucidate multiple aspects of the ways in which decarbonization and the macroeconomy interact. In panel discussions, an interactive breakout session, and a poster session, participants explored emerging insights on the macroeconomic and socioeconomic implications of decarbonization strategies and lessons learned from engagement with communities, industries, and governments around decarbonization pathways.

Through panel discussions, invited experts discussed the economic risks of decarbonization in areas such as finance, labor, supply chains, and the political economy, as well as ways public policy could help to mitigate these risks and harness potential opportunities. They also considered a variety of barriers to decarbonization efforts, such as technical hurdles, institutional and infrastructural

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1 This proceedings has been prepared by the workshop rapporteurs as a factual summary of what occurred at the workshop. The planning committee’s role was limited to planning and convening the workshop. The views contained in the proceedings are those of individual workshop participants and do not necessarily represent the views of the individual workshop participants’ affiliated organizations, all workshop participants, the planning committee, or the National Academies of Sciences, Engineering, and Medicine.

Suggested Citation: "Overview." 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. doi: 10.17226/29050.

barriers, and issues related to perceptions, trust, and support on the part of the public and politicians. Participants shared examples of models and research collaborations that have sought to bring modeling to bear on decarbonization policy design, critically examining the strengths of different approaches and identifying gaps and potential future research directions. Finally, recognizing that decarbonization is a transboundary issue, participants discussed how the global energy transition drives changes in exports, trade dynamics, and foreign investment patterns that can create both risks and opportunities within countries and globally.

The barriers to decarbonization—and the potential for uncertain or negative socioeconomic consequences in certain communities and countries—can be daunting. While recognizing the importance of these challenges, many workshop participants also highlighted a number of promising solutions and expressed a sense of optimism about the future of decarbonization. Several participants emphasized the value of pragmatism, when paired with ambitious goals, to drive progress. Multiple participants pointed out that issues that may be perceived as barriers can sometimes be turned into opportunities. For example, while local opposition to facility siting poses an important barrier to the deployment of clean energy infrastructure, several speakers suggested that working in partnership with local communities can help to address these concerns and help communities reap co-benefits of clean energy infrastructure in terms of employment, air quality, and other factors. In addition, some participants underscored the urgency of taking action to move toward decarbonization, in light of the known risks and costs anticipated if greenhouse gas emissions and climate change continue unabated, emphasizing that the choice is not between taking risks and not taking risks but rather a matter of choosing a path forward that is feasible for advancing shared goals to the greatest extent possible.

Another common theme throughout the workshop discussions was the interdisciplinarity inherent in discussions of decarbonization and the macroeconomy. In the energy transition, decisions are based not solely on the costs of technologies and their implementation but on a wide range of non-cost factors including disproportionate impacts of environmental change across communities. To fully consider the options, opportunities, and consequences of policy actions, several participants stressed that it is vital to appreciate the interplay among different facets of society from the physical processes involved in climate change and decarbonization technologies to the financial, legal, political, and social facets of decarbonization strategies and solutions. Bringing together different modeling approaches—such as climate, energy systems, and economic models—and facilitating shared learning among disciplines including the social sciences can help to shed light on the full spectrum of impacts that might be anticipated with different decisions and actions.

Projecting future events is inherently uncertain. Considering the impacts of any given technology development or policy decision in the decarbonization are-

Suggested Citation: "Overview." 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. doi: 10.17226/29050.

na is complicated not only by the complexity of modeling climate change and macroeconomic trends but also by the myriad feedbacks and interactions that can occur as downstream changes play out. This can make modeling outputs highly uncertain and potentially undermine trust among policymakers, industries, or the public. To appropriately recognize and address the issue of uncertainty, some participants suggested transparent communication about sources and levels of uncertainty when communicating about model outputs, while also taking steps to decrease uncertainty through improved data and modeling methodology. One participant also noted that policy uncertainty can slow decarbonization investments among industry stakeholders. As a result, sending strong, early policy signals regarding which types of strategies the government seeks to incentivize and support in the long run can help industries justify investments in those areas and speed progress toward meeting net-zero targets.

In addition to technology and economics, decarbonization is about people, communities, and coalitions. The interconnected nature of regional and global economies makes decarbonization an inherently international issue, and one that deeply affects individuals and communities as well as industries and national economies. Through impacts on jobs, industries, trade, and geopolitical relationships, speakers described how energy transitions can have profound and sometimes difficult to predict implications at local, national, regional, and global scales. Many participants underscored the importance of supporting capacity-building internationally around decarbonization research, innovations, and policies.

Suggested Citation: "Overview." 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. doi: 10.17226/29050.
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Suggested Citation: "Overview." 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. doi: 10.17226/29050.
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Suggested Citation: "Overview." 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. doi: 10.17226/29050.
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