A day after the Dubai summit agreed to launch a fair and accelerated “transition” away from fossil fuels global warming at 1.5°The OECD, the organization of developed countries, published a report this Thursday. updating long-term growth expectations (2060) included the possible effects for the first time energy transition. The result is one slower growth Without the exit of fossil fuels from the economy, the transition would reduce, according to OECD estimates, up to 3.7 percent of the GDP of developed countries and up to 11 percentage points in large developing economies by 2050, but the increase and use of Carbon taxes recommended by the international organization additional income less than tax and salary contributions and thus encourages work.
OECD estimates that decarbonization could shave 3.7 percentage points off the GDP of advanced economies and increase unemployment by 2050, so it recommends compensatory measures
The developed countries organization assumes that the current trend is towards annual growth in real GDP for OECD and G20 countries. It will gradually slow down from 3% before the coronavirus to 1.7% in 2060mainly due to the “decline in growth” working age population and slowdown in growth work efficiency In emerging market economies.
Considering this and that “all countries speed up your migration [energética] Will be eliminated from 2026 coal as an energy source by 2050 Reducing the share of oil and natural gas The OECD predicts that primary energy will be increased to 5% and 10% respectively. further slowdown in global growth It ranges from 0.2 percentage points in the first years to 0.6 percentage points at the end of the transition period.
He adds that this slowdown is “more modest” in the area of OECD countries and “more severe” in the emerging markets of the G20 (such as China, India, Saudi Arabia, Brazil, Indonesia or Turkey), where there is a “greater concentration of carbon emissions”. The organization forecasts lower accumulated growth of 3.7% of GDP by 2050, compared with the reference path (without energy transition) for developed countries and 11% for major developing economies.
However, the OECD report also ensures that equivalent additional resources are guaranteed. 3.25% GDP from carbon fees (carbon taxes, emission rights or excise taxes on fuel).
The OECD specifically recommends the use of these methods. additional tax revenue Wholesale price of CO2 reduce tax on employment (income tax and social contributions). “Transitioning is a possible option more applicable “Politically,” he says.
According to the international organisation, these potential positive effects on employment could “more than offset” the decline in output associated with the global crisis The first decade of the energy transition“It will keep living standards at the same level 2035 “Higher than the baseline scenario in the Eurozone and most OECD countries.”
But the organization adds: reduce taxation of wages This is “just one of the ways” that can be used to “redistribute to households.” tax revenue CO2 He warns that a successful energy transition will include: increase unemployment“at least for a while”, so the reduction in wage taxes indicates that: Active employment policies, Programs such as retraining and vocational change programs can help increase employment rates, with a particularly strong impact on young people. Also via “family benefits in kindIt could help increase employment, such as child care, and “have a particular impact on women.”
To demonstrate the potential of a policy package to jointly support employment and innovation, the OECD analyzes the following scenario: two thirds income additional taxes While the carbon-related amounts are used to increase public R&D expenditures, the remaining one-third is used to increase public R&D expenditures. childcare. Thus, in 2035, the OECD total employment rate will be 0.6 percentage points higher than in the transition scenario, with additional carbon-related income being redistributed globally, while the upward trend in labor productivity will be 0.1 percentage points higher.
Here’s another suggestion to offset the costs of the transition: “structural reforms” It has almost no financial cost.