Achieving Net-Zero Emission Targets: Technologies and Economics

: Since the Paris Climate Agreement set the global warming target well below 2°C, preferably 1.5°C relative to pre-industrial levels, many nations, sub-nations, and corporate entities have announced net-zero targets for carbon dioxide or greenhouse gas emissions. This study aims to understand the economic implications of net-zero targets by reviewing the existing body of literature. However, not many studies are found on the macroeconomic and distributional impacts of net-zero targets. Existing studies are rather focused on net-zero targets at the sectoral levels even though sectoral net-zero targets are sub-optimal. Most net-zero roadmaps rely on technologies that are not yet economically viable and commercially available, implying that the achievement of the net-zero targets is contingent on technological breakthroughs and cost reductions of the emerging technologies for zero emissions, energy storage, and carbon removal. The study stresses that government and corporate policies that played a critical role in reducing the costs of solar and wind power and their scaling-up, should be expanded to support the emerging technologies included in net-zero roadmaps. The study also highlights the need for further research on the economic and distributional consequences of net-zero targets and the policy design for achieving the targets.