The Economics of Climate Change

By assessing the impact of global warming and the transition to “net zero” on the economy, this paper focuses on three dimensions: the direct physical impact of higher temperatures, the effect of stricter environmental policies, and the boost from greater “green investment” to help mitigate and adapt to climate change. While the physical impact of climate change on the economy increases as temperatures rise, the impact will vary across regions. The growth drag associated with higher temperatures and stricter environmental policies will, to some extent, be offset by increased investment in green infrastructures and technologies.