Notes: Net zero by 2050 is an ambitious scenario that limits global warming to 1.5 °C, reaching net-zero emissions by 2050. The average of the three main models used by the NGFS is displayed. The definitions for the EU differ across these three models. These changes will have profound implications for our daily lives and economic system.
The price of energy affects the cost of virtually everything we consume and produce. As a result, the costpush shock from an increase in energy prices is felt throughout the economy. Given that the ECB’s primary mandate is to preserve price stability, understanding the relationship between the transition to a greener economy and the price of energy is crucial.