Rapid decarbonization will almost necessarily be experienced as an economic boom. Renovating buildings, investing in new structures and equipment, building infrastructure, etc. add to demand; decommissioning existing stuff does not subtract from it. https://twitter.com/70sBachchan/status/1351257731374735372

High expected returns in growing sectors can call forth very high investment there; investment can't fall below zero in declining sectors. So even if aggregate profitability is unchanged, big shift in its distribution across industries will lead to higher investment.

As Schumpeter famously argued, historically booms in capitalist economies aren't about faster growth across the board, but happen when new forms of production grow rapidly at the expense of old ones. No reason decarbonization should be different.

Central banks can speed this up by abandoning the fiction of neutrality - which no monetary or credit policy can be - and actively channeling credit toward green sectors. But this needs to be focused on areas where credit constraints actually bind.

From where I'm sitting, it's not obvious what is the right mix of credit policy, regulation, taxes & subsidies, and direct public provision. Presumably some are more important in some areas, others in others.

One problem that does *not* need to be solved is getting private investors to hold assets issued/backed by rich-country sovereigns. Why I'm skeptical of proposals for National Investment Authority. Focus should be on asset side of public-sector balance sheet, not liability side.

In world of increasing returns and uncertainty, carbon tax and similar price measures may be effective at shifting from one established industry to another, but will not do much for building up new ones. Direct support of some kind needed there.

I also think - maybe more controversially - that overall labor market conditions are decisive for income distribution. So if we want to specifically improve conditions for workers, poor, etc., explicit mandates on wages are less important than just getting enough total spending.

Similarly, for workers in declining industries, I'm skeptical of the value of explicit transition assistance, vs simply making sure there's enough spending to create tight labor markets in areas where those industries are concentrated.

Bottom line is that, however we imagine living standards in decarbonized world, transition there will require large outlays of money, bigger the faster it is. And in our world of chronic demand constraints, that implies faster growth and higher incomes.