With the transition to net zero emissions, the structure of the global economy is expected to change significantly. Clean sectors, such as renewables, are likely to grow, while emissions-intensive sectors are likely to shrink. The economic structures of individual countries and international trade patterns are also likely to change.
Regarding policymaking, long term views need to be integrated in decisions made today to avoid “locking in” policies and projects that are incompatible with meeting climate targets.
This workshop, held under the HP1 workstream, explored how scoping the fiscal impacts of long-term net zero strategies can enable Finance Ministries to a) promote sustainable economic policies, b) prepare and adjust for possible major changes, and c) maintain budget sustainability in this dynamic environment.