Modelling the macroeconomic implications of a ‘closing the green finance gap’ policy scenario within a low-carbon energy transition

Hafner, Sarah and Jones, Aled and Monasterolo, Irene and Annela, Anger-Kravi (2021) Modelling the macroeconomic implications of a ‘closing the green finance gap’ policy scenario within a low-carbon energy transition. Environmental Innovation and Societal Transitions, 40. pp. 536-568. ISSN 2210-4232

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Official URL: https://doi.org/10.1016/j.eist.2021.10.006

Abstract

Reaching the UK net-zero emissions target translates into substantial investment requirements into low-carbon energy infrastructure. However, investors are currently not investing sufficiently in renewable energy capacity, leading to the so-called green finance gap. Current energy-economy models generally do not reveal the macroeconomic implications of policies aimed at scaling-up green finance for energy transitions. In the light of this background, we extend the energy-economy Green Investment Barrier Model with the insights from a systematic literature review to investigate the macroeconomic implications of a policy scenario designed to close the green finance gap in combination with and without a scenario to decarbonise the power sector. We also compare the achieved results with studies focusing on a similar research question. We find that the closing the green finance gap policy scenario alongside a low-carbon power scenario leads to the co-benefits of lower power system costs and unemployment, and increases in GDP.

Item Type: Journal Article
Additional Information: Accessibility note: If you require a more accessible version of this document, please contact us at arro@aru.ac.uk
Keywords: Green finance gap, Energy transition, Energy-economy model, System dynamics, Policy scenario
Faculty: Faculty of Science & Engineering
SWORD Depositor: Symplectic User
Depositing User: Symplectic User
Date Deposited: 18 Oct 2021 10:08
Last Modified: 17 Jan 2022 15:23
URI: https://arro.anglia.ac.uk/id/eprint/707019

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