Productivity implications of the move to net zero

2026

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1) This paper analyzes the productivity implications of the UK's transition to net zero emissions using a dynamic general equilibrium model, finding that while short-term impacts may reduce GDP, long-term gains are possible with significant green investment and technological advancements.
2) - The study employs a dynamic general equilibrium model to simulate the effects of a carbon tax on productivity in the UK.
- It examines both short-term impacts, where initial adjustments may lead to lower GDP, and long-term scenarios considering capital deepening and potential technological spillovers from green investments.
- The findings suggest that significant investment in green capital and technological gains are crucial for the net-zero transition to positively impact productivity growth beyond direct capital deepening effects.
3) net zero, productivity, carbon tax, DSGE model, green technology

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