What the study found
The study found that an energy transition in the Netherlands, modeled with a soft-linked energy system model and Computable General Equilibrium model, is associated with long-term gross domestic product gains but also with unemployment during the transition. The authors report that replacing fossil fuels with renewable alternatives raises GDP in the long run, while structural shifts in the economy drive unemployment.
Why the authors say this matters
The authors conclude that the negative effects seen in the energy transition scenarios should be weighed against climate-related economic damages not included in the business-as-usual case. They also say policy frameworks are needed to balance the socio-economic impacts of the energy transition with its environmental benefits, especially when financing is constrained.
What the researchers tested
The researchers linked an Energy System Model, a model of how energy technologies and fuels may develop over time, to a Computable General Equilibrium model, an economy-wide model used to estimate macroeconomic effects. They added hydrogen-related activities to the CGE model to better capture transitions in hard-to-abate sectors such as steel and chemical production. They compared a business-as-usual scenario, an Energy Transition scenario aligned with carbon neutrality, and a limited-capital-inflow version of the Energy Transition scenario.
What worked and what didn't
In the Energy Transition scenario, GDP was 1.7% higher in 2050 than in the business-as-usual scenario, and cumulative GDP over 2025–2050 increased. In the limited-capital-inflow version, cumulative GDP declined by €64 billion. Unemployment peaked around the middle of the transition in the Energy Transition scenario and then fell, ending about 0.2% above business as usual by 2050. Welfare losses were initially severe in the Energy Transition scenario and remained consistently higher in the limited-capital-inflow scenario.
What to keep in mind
The abstract does not describe detailed model limitations beyond the scenario assumptions. The authors also note that the business-as-usual comparison omits climate-related economic damages, which may affect how its macroeconomic advantage is interpreted.
Key points
- The model links an energy system model with a Computable General Equilibrium model for the Netherlands.
- The Energy Transition scenario is aligned with a carbon-neutrality target and includes hydrogen-related activities.
- GDP is reported to be 1.7% higher in 2050 under the Energy Transition scenario than under business as usual.
- Unemployment peaks during the transition period and is about 0.2% above business as usual by 2050.
- A limited-capital-inflow version of the Energy Transition scenario shows lower cumulative GDP and persistently higher welfare losses.
Disclosure
- Research title:
- Energy transition model shows long-term GDP gains and higher unemployment
- Authors:
- Ahmed M. Elberry, Kostas Fragkiadakis, Leonidas Paroussos, Joost N. P. van Stralen, M.J.J. Scheepers, Jos Sijm, André Faaij, Bob van der Zwaan
- Institutions:
- Amsterdam University of Applied Sciences, Amsterdam University of Applied Sciences, Energy Transitions (United Kingdom), Energy Transitions (United Kingdom), Energy Transitions (United Kingdom), Energy Transitions (United Kingdom), Energy Transitions (United Kingdom), Energy Transitions (United Kingdom), Institute for Sustainable Development, Johns Hopkins University SAIS Bologna Center, Utrecht University
- Publication date:
- 2026-02-27
- OpenAlex record:
- View
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