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The Use of Macroeconomic Indicators in Climate Action
The ever-expanding variety of economic data provides increasingly better and more precise information on how climate change and climate action impact economies. Based on this information, climate policies might not only address the needs of climate mitigation and climate adaptation but also ensure that economic development is not dwarfed by misinformed decarbonization policies. At the same time, the guidance provided by analysis based on macroeconomic data ensures that fiscal and social obligations during the green transition are met without risking the social wellbeing of people. This paper discusses aspects of climate change and climate action that can be currently seen in the commonly used macroeconomic indicators, and what are the applications of this information for climate action. The paper also outlines major limitations of the use of macroeconomic indicators as well as uncertainties emanating from the nature of climate change. The discussion on selected indicators is followed by main messages of the paper and sectoral policy options.
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