Subsidies could cut net zero transition costs, BdF paper finds

Using carbon tax revenues to fund new technologies would almost halve GDP loss, researchers say

The Banque de France

Well-designed subsidies for goods cutting carbon emissions would significantly reduce “net zero” transition costs, a working paper published by the Banque de France find.

In Environmental subsidies to mitigate net-zero transition costs, Eric Jondeau, Grégory Levieuge, Jean-Guillaume Sahuc and Gauthier Vermandel present “a quantitative macroclimate model for the world economy”.

The model features an endogenous market structure for products which reduce the production of carbon emissions, or

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