What the study found
Replacing fossil fuels with renewable alternatives in the Netherlands was associated with higher GDP in the long term, but also with unemployment during the transition. The study also found that limited capital inflows were linked to worse economic outcomes in the energy-transition scenario.
Why the authors say this matters
The authors suggest that the negative effects seen in the energy-transition scenarios should be weighed against climate-related economic damages that are omitted from the business-as-usual case. They conclude that policy frameworks are needed to balance the socio-economic effects 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 is produced and used) to a computable general equilibrium model (an economy-wide model of markets and sectors) for the Netherlands. They added hydrogen-related activities to the CGE model to better assess alternative fuels in hard-to-abate sectors such as steel and chemical production, and they compared a business-as-usual scenario with an energy-transition scenario aligned with carbon neutrality, plus a version with limited capital inflows.
What worked and what didn't
In the energy-transition scenario, GDP was 1.7% higher in 2050 than in business as usual, and cumulative GDP over 2025–2050 was higher than in business as usual. Under limited capital inflows, cumulative GDP declined by €64 billion. Unemployment peaked around the middle of the transition and then fell, ending about 0.2% above business as usual by 2050; welfare losses were initially severe in the energy-transition scenario and stayed higher under the limited-capital version.
What to keep in mind
The abstract does not describe technical limitations beyond the constrained-financing case. The authors also note that climate-related economic damages are omitted from the business-as-usual comparison, which means that comparison does not include those effects.
Key points
- The model found long-term GDP gains under the energy-transition scenario for the Netherlands.
- GDP was reported as 1.7% higher in 2050 under the energy-transition scenario than under business as usual.
- Unemployment rose during the transition, peaked mid-way, and was about 0.2% above business as usual by 2050.
- With limited capital inflows, cumulative GDP over 2025–2050 fell by €64 billion relative to the energy-transition case.
- The authors say policy should balance socio-economic effects of the transition with environmental benefits, especially when financing is constrained.
Disclosure
- Research title:
- Energy transition model links predict long-term GDP gains and temporary unemployment
- Authors:
- Ahmed M. Elberry, Kostas Fragkiadakis, Leonidas Paroussos, Joost N. P. van Stralen, M.J.J. Scheepers, Jos Sijm, André Faaij, M Zwaan
- Institutions:
- Energy Transitions (United Kingdom), Amsterdam University of Applied Sciences, Utrecht University, Institute for Sustainable Development, Johns Hopkins University SAIS Bologna Center
- Publication date:
- 2026-02-27
- OpenAlex record:
- View
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