Conference Agenda

Climate change adaptation is increasingly assessed using computable general equilibrium (CGE) models, yet its representation remains fragmented and often ad hoc, limiting transparency and comparability across studies. This paper develops a generic, impact-agnostic framework for systematically translating adaptation measures from sectoral and biophysical models into CGE parameters. The framework is structured around five guiding questions that clarify adaptation objectives, mechanisms, implementing agents, economic incidence, and temporal dynamics. We demonstrate the framework through an intercomparison of two CGE models, COIN-INT and ICES-XPS, assessing sea level rise impacts and adaptation in Europe under the SSP2–RCP7.0 scenario. Using adaptation data from the DIVA coastal impact model, we evaluate three strategies: constant dike heights, constant protection levels, and cost-optimal protection. Results show that insufficient adaptation leads to increasing GDP losses over time, while stronger, cost-optimal protection substantially reduces long-term damages, nearly eliminating GDP losses by 2070 in most regions. Despite differences in impact magnitude due to structural model assumptions, both CGE models consistently rank adaptation strategies, underscoring the value of standardized adaptation modeling approaches.

While circularity has been emphasized as critical in realizing net zero greenhouse gas emissions, the necessary policies to achieve it are underrepresented worldwide. The cross-sectoral nature of circular design and challenges in quantifying impacts hamper political implementation. However, to render net zero feasible, socially focused circularity modeling, thus informed policy design and effective implementation are indispensable. We suggest a scheme to overcome this gap and evaluate policy implications across sustainability dimensions. We find that a transdisciplinary approach integrated across sectors and fields of action is needed to address the detailed material flow knowledge demands involved. Application of the scheme offers practical insights on the process and core transition results. Enhancing circularity is found to increase value added, as a matter of (material) system efficiency, granting larger value shares in production to primary factors labor, capital and land. The favorable economic and distributional implication is even more relevant given that domestic renewable resources are limited.

Achieving net-zero greenhouse gas emissions by 2040 is a central goal of Austrian climate policy, requiring substantial investments and structural shifts across economic sectors. This study assesses the budgetary and macroeconomic implications of Austria’s transition to climate neutrality using the WEGDYN-AT computable general equilibrium (CGE) model. The analysis integrates structural and technological shifts in energy demand and supply in the sectors of industry, energy, transport and buildings in line with projections for a climate neutral Austrian economy by 2040. Thereby, we consider two financing schemes to cover the associated investment needs – Consumption Displacement and Foreign Debt – under two interest rate settings – 2% and 8%. In the Consumption Displacement scenario, resources are allocated away from consumption towards climate-neutral investments, leading to short-term welfare losses for current generations but a higher capital stock in the future. In contrast, the Foreign Debt scenario maintains short-term consumption levels but transfers the financial burden to future generations through accumulating interest payments. Results reveal that low-interest financing reduces transition costs, amplifies economic growth, and improves public and private welfare, while high-interest rates exacerbate economic challenges. We find that between 2024 and 2040, the transition requires approximately 0.6%-1.1% of GDP in annual additional investments depending on macroeconomic performance. Our findings underscore the importance of supportive policies to lower capital costs, such as scaling up green bonds, fostering public-private partnerships, and advancing the European Capital Markets Union. By providing a detailed analysis of financing strategies and their economic impacts, this study offers valuable insights for policymakers navigating the challenges of achieving climate neutrality while maintaining fiscal sustainability.

This paper assesses the macroeconomic, environmental and distributional impacts of different strategies for recycling EU ETS and ETS2 revenues in the Czech Republic, using a detailed hybrid general equilibrium model (MERCI-CZ) supplemented with sectoral details and consumer behaviour models.

The analysis confirms that carbon pricing can bring not only emission reductions, but also economic and social benefits if revenue recycling is set up appropriately. At the same time, it shows that the choice of revenue allocation method fundamentally affects the balance between short-term economic stability, long-term structural transformation and social equity.

In all scenarios, moving to carbon neutrality by 2050 implies a significant macroeconomic adjustment, with GDP falling by 4.5-6% in 2050 compared to the WEM reference scenario without the Fit for 55 package. The differences between the scenarios are mainly due to the way the revenues from auctioning emission allowances are used. The WAM NECP and WAM SCF scenarios - combining social

support and targeted investment in green technologies - are able to mitigate the negative impacts on GDP in the initial phase and even generate modest short-term gains. Household consumption in these scenarios grows both through direct financial support and through long-term savings from increased

energy efficiency and electrification.

In contrast, the WAM NoSocial and WAM Debt scenarios show the risks of no support for household demand. While these approaches reduce fiscal spending, they reduce consumption in the early years, deepen the decline in output and delay the social benefits of the transition. The Debt scenario - using revenues to reduce public debt - shows the worst results for GDP and consumption in the first half of

the period, although it partially makes up the difference in the later stages due to lower operating costs.

From an environmental perspective, all scenarios with ETS2 achieve significant and sustained emission reductions, with NoSocial performing best due to the highest investment in energy efficiency and technology. However, these additional reductions are offset by weaker short-term economic performance

and the absence of direct support to vulnerable groups. The NoETS2 scenario shows that while exempting transport and buildings from carbon pricing reduces economic costs, it slows decarbonisation in key sectors.

The results highlight that there is no clear best strategy for revenue recycling. The optimal approach should balance support to households with targeted investments in low-carbon technologies to mitigate disparities in impacts, maintain policy acceptability while achieving deep emission reductions.

Strategies focused solely on fiscal consolidation or technology investment may undermine social acceptance or slow economic recovery. The analysis confirms that linking carbon pricing to fiscal, social and industrial policies is key to making the path to carbon neutrality economically feasible, socially equitable and environmentally ambitious.

The green transition plays a crucial role for future labour markets, as fossil fuel-intensive industries are phased out and new climate-friendly production processes emerge, implying both job creation and destruction and thus relevant distributional effects. We therefore investigate the labour market implications of four comprehensive net-zero scenarios for the main relevant economic sectors using a macroeconomic Computable General Equilibrium model for Austria and a post-processing analysis based on detailed labour market data. We find relevant shifts in labour demand, requiring 2.5% to 3.7% of the labour force to change their occupation, depending on the underlying scenario. Our analysis highlights the importance of sectoral and occupational detail and the use of a comprehensive economy-wide analysis tool, as we find that indirect and induced employment effects can be larger than employment changes in directly affected sectors. At the occupational level, there is a strong increase in the demand for plant and machine operators, mainly due to increasing activities in the wood sector to process biomass and the greater need for drivers in an intensified public transport system, while service and sales workers are much less demanded as trade sectors lose relevance. For other occupations, net changes are small, but our analysis reveals relevant sectoral transition needs. A net-zero transition state also holds the potential for a more equal distribution of labour income, as occupations currently supplied by the lowest and highest income deciles will be demanded less, while demand for occupations currently supplied by middle-income deciles will increase. We also find a net increase in demand for occupations held by men and conclude that a more equal gender balance could potentially facilitate this job reallocation and reduce the need for cross-sectoral switching. Finally, we conclude that targeted policies in the context of a just net-zero transition must not only include the labour market, but also need to be specifically designed to take into account the multi-dimensional socio-economic backgrounds of the workforce.