The macroeconomics of the energy transition: We are starting to get a clearer picture

We start from the assumption that the energy transition will be achieved through decarbonisation of energy, transport and industry, not through degrowth. We can now understand better that the energy transition, achieved in this way, will lead to: Destruction of capital and jobs, and therefore an initial loss of potential GDP and a risk of unemployment; A massive need for investments, whose financial return is sometimes low, which raises the question of how these investments will be financed (through private savings, by taxes?), and shows the need to reduce consumption; A significant rise in the prices of energy, certain raw materials and certain goods (cars), leading to inflation, to increased inequality, and also to the risk of new scarcity (metals needed for the transition) and geopolitical tensions; As a result, significant pressure on public policies: need for public transfer payments and public investments, probably financed by taxation of capital income; pressure on central banks to keep interest rates low.