PETERSON INSTITUTE FORINTERNATIONAL ECONOMICSWORKING PAPER24-6 Macroeconomic implications ofa transition to net zero emissionsApproaches of and lessons from World Bank GroupCountry Climate and Development Reports,with anapplication to TurkeyStephane Hallegatte,Florent Mclsaac,Hasan Dudu,Charl Jooste,CamillaKnudsen,and Hans BeckMarch 2024碳文库ABSTRACTIn 2022 the World Bank Group launched a new core diagnostic tool:the CountryStephane Hallegatte isClimate and Development Report (CCDR).Published for 42 economies soa senior climate changeadvisor of the Worldfar,CCDRs use resilient and low-emission development scenarios to identifyBank.Florent Mclsaacsynergies and tradeoffs between development and climate objectives.There areis a senior economistat the Macroeconomicseveral modeling challenges associated with the analysis of the macroeconomicModelling Unit of theconsequences of these development pathways,including those related to theMacroeconomics,Tradeand Investment Globalnonmarginal nature of the required transformation,the role of technologies,andPractice at the Worldthe replacement of fossil fuel-based assets with greener ones.To address someBank.Hasan Dudu isof these challenges,several CCDRs have used a hybrid modeling approach thatan economist at theMiddle East and Centralcombines a set of sectoral analyses with macroeconomic models.Specifically,Asia Department of thesectoral techno-economic models are employed to construct resilient andFund.Camilla Knudsenlow-emission development trajectories in key sectors.The macroeconomicis an economist at theimplications of these sectoral transitions are then assessed by linking theWorld Bank.Charl Joostesectoral models with two macroeconomic frameworks:a multisector generalis a senior economistat the Macroeconomicequilibrium framework and an aggregate macrostructural model.This hybridModelling Unit of theapproach combines the advantages of multiple tools and captures the variousMacroeconomics,Tradedimensions of the transition,including the need to tackle multiple market failures,Practice at the Worldbeyond the emissions externality;analyze price and nonprice policies and theirBank.Hans Anand Beckis the program leader forinteractions;represent explicitly the replacement of assets and infrastructure;Turkey in the World Bankassess the macroeconomic feasibility of the sectoral transitions and the requiredEquitable Growth,Financeinvestments.This paper uses the case of Turkey to describe the methodologicalapproach and summarizes the results of the CCDRs that have been published todate.Findings suggest that,despite large investment needs,the transition can1750 Massachusetts Avenue,NW Washington,DC 20036-1903 USA +1.202.328.9000 www.piie.comWP 24-6 MARCH 20242contribute positively to economic growth,especially when indirect mitigationbenefits are taken into account,but only if structural challenges can be managed,climate and development policies are well designed,and negative impacts onsome sectors or communities are mitigated.JEL Codes:E60,Q43,Q54Keywords:Macroeconomic modeling;climate change;technological changeAuthor's Note:This paper-prepared for a conference on Macroeconomic Implicationsof Climate Action on June 5-6,2023,at the Peterson Institute for IntemationalEconomics (PllE)-is an extension of the methodological paper focused on Turkey,available as Stephane Hallegatte,Florent Mclsaac,Hasan Dudu,Charl Jooste,CamillaKnudsen,and Hans Beck,2023,The Macroeconomic Implications of a Transitionto Zero Net Emissions:A Modeling Framework,Policy Research Working Paper10367 Washington:World Bank Group.This work is part of the analytical work forthe World Bank Country Climate and Development Report (CCDR)for Turkey andbenefited from the contributions of the entire CCDR team,especially the manycolleagues who developed the sectoral roadmaps on which this work is based.Theauthors thank in particular the peer reviewers of the CCDR,including dozen of WorldBank staff,Nick Stern and Amar Bhattacharya,who provided insightful commentsat various stage of this work.We also thank Etienne Espagne,Jean Pisani-Ferry,Dilek Sevinc,and Marc Noland for their helpful comments on this manuscript;loanaMarinescu and Stefano Scarpetta for their detailed and constructive discussion notes;and all participants of the PllE conference organized by Jean Pisani-Ferry and AdamS.Posen.All remaining errors and opinions are our own.The authors thank the multi-donor Climate Support Facility for funding part of this work.