Net Zero: OECD Report Sets the Record Straight on Economic Benefits

For years, a persistent argument has loomed over the push for net zero: that transitioning to a low-carbon economy costs too much and drags down economic growth. Critics often paint net zero policies as a financial burden, claiming they saddle governments with hefty bills, raise energy prices, and stifle industrial competitiveness. However, a groundbreaking report from the Organisation for Economic Co-operation and Development (OECD) dismantles this misconception, revealing that net zero is not an economic drain but a powerful driver of prosperity, innovation, and job creation.

Debunking the Myth: Net Zero as an Economic Opportunity

The OECD’s Fast-tracking Net Zero by Building Climate and Economic Resilience: A Summary for Policymakers provides a robust counterpoint to the narrative that net zero slows the economy. Far from being a costly liability, the report argues that well-designed net zero policies can deliver tangible economic gains across short, medium, and long-term horizons. It challenges the short-sighted view that upfront investments outweigh benefits, instead showcasing how these policies can fuel growth while averting the far steeper costs of climate inaction.

Short-Term Gains: Boosting Jobs and GDP

In the short term, the OECD report demonstrates that net zero policies can stimulate economic activity rather than hinder it. By implementing strengthened Nationally Determined Contributions (NDCs) with smart policy design, governments can create jobs in emerging sectors like renewable energy, energy efficiency, and sustainable transport. For instance, the report cites estimates that investments in renewables could generate up to 24 million new jobs globally by 2030. Moreover, these policies can yield a slight increase in global GDP in the short to medium term compared to sticking with existing, less ambitious frameworks—an immediate economic win that defies the “costly burden” myth.

Medium-Term Growth: The Green Tech Boom

Looking to the medium term, the OECD highlights the explosive growth potential of the green technology market. In 2023, the market for six key green energy technologies—such as solar PV, wind, and electric vehicles—surpassed $700b. The report projects this market will nearly triple by 2035, approaching the value of the global crude oil market in recent years. This boom offers governments a chance to lead in innovation, sharpen industrial competitiveness, and build new revenue streams—all while reducing emissions. Far from slowing the economy, net zero policies position countries to thrive in a rapidly evolving global market.

Long-Term Savings: Avoiding the Costs of Inaction

Over the long term, the economic case for net zero becomes even more compelling. The OECD warns that failing to act on climate change will unleash devastating financial consequences—think extreme weather, rising sea levels, and ecosystem collapse—that dwarf the costs of transitioning now. By investing in net zero today, governments can sidestep these burdens, securing significant savings and ensuring economic stability for future generations. The report’s message is clear: the price of doing nothing far exceeds the price of doing something.

A Blueprint for Prosperity

The OECD doesn’t just make the case for net zero—it shows how to get there. Job creation isn’t limited to energy; it spans construction, manufacturing, and services, revitalising economies in transition. Innovation thrives as governments back research into cutting-edge solutions, giving early movers a competitive edge. And critically, the report stresses the need for well-crafted policies that ensure a just transition—supporting workers and communities through reskilling programmes and targeted investments—so no one is left behind.

The Time to Act Is Now

The OECD report is more than a rebuttal to naysayers; it’s a call to action. “Achieving net zero is not just an environmental imperative, but an economic one,” says OECD Secretary-General Mathias Cormann. “The costs of inaction far outweigh the costs of action, and the opportunities for growth and prosperity are immense.” With the window to limit global warming narrowing, governments must seize this moment to unlock the economic potential of net zero. The evidence is in: far from costing money and slowing the economy, net zero is the key to building a thriving, sustainable future.

Source: OECD (2025), Fast-tracking Net Zero by Building Climate and Economic Resilience: A Summary for Policymakers, OECD Publishing, Paris, https://doi.org/10.1787/f2c22c96-en.