Stocktake of G20 countries’ climate pledges reveals limited macroeconomic costs and employment shifts

Reaching the Paris Agreement temperature targets requires a substantial increase in individual countries’ ambition to reduce GHG emissions. Research on the macroeconomic implications of global decarbonization pathways is limited, often focuses on the energy sector, and ignores shifts toward non-energy sectors, leading to concerns regarding unemployment and economic losses. We aim to analyze the mitigation options to bring emissions in line with ambitious climate targets and evaluate the macroeconomic consequences of this energy transition to investigate these concerns. Here, we assess G20 countries’ pledges announced up to and during COP26 using a modeling toolbox that links energy system, macroeconomic, and climate models. Our results show that the macroeconomic costs associated with the decarbonized pathways amount to less than half a percent of the global GDP by 2040, with electrification moving jobs toward energy-intensive industry, construction, and manufacturing sectors and partially offsetting losses in fossil fuel sectors. Pursuing efforts to a 1.5°C level requires immediate action, with announced policy targets leading to an implied temperature change of 1.8°C by 2100.