Macroeconomic policies for rapid decarbonization, steady economic transition and employment creation

Macroeconomic policies for rapid decarbonization, steady economic transition and employment creation | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Macroeconomic policies for rapid decarbonization, steady economic transition and employment creation Francesco Lamperti, Claudia Wieners, Giovanni Dosi, Andrea Roventini This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-4637209/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 26 Nov, 2025 Read the published version in Nature Sustainability → Version 1 posted You are reading this latest preprint version Abstract A large number of countries have by now pledged to undertake policies aimed at reducing greenhouse gas emissions and achieving carbon neutrality in the coming decades. However, evidence on the suitable policy package to induce an effective and orderly transition is scarce. Recent studies suggest that abrupt and aggressive climate policy may induce macroeconomic frictions. We extend a macro-financial agent-based integrated assessment model to test a variety of policy packages aimed at rapidly decarbonizing the global economy, guaranteeing macroeconomic stability, and fostering job creation. We show that carbon taxation alone is self-defeating: its role at internalizing environmental costs and triggering rapid decarbonization finds little support. However, an ensemble of industrial regulations and public subsidies coupled with a mild carbon tax is the most promising policy toolkit to support a rapid and orderly transition. Such a policy mix can be designed to have a neutral impact on public finances. JEL codes: C63, Q40, Q50, Q54 Scientific community and society/Social sciences/Economics Earth and environmental sciences/Environmental social sciences/Climate-change mitigation Earth and environmental sciences/Environmental social sciences/Climate-change policy Earth and environmental sciences/Environmental social sciences/Environmental economics climate policy transition risk decarbonization macroeconomic dynamics Paris agreement agent based computational economics Full Text Additional Declarations There is NO Competing Interest. Supplementary Files WLDRDSKpolicy2024SI.pdf Cite Share Download PDF Status: Published Journal Publication published 26 Nov, 2025 Read the published version in Nature Sustainability → Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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