The global energy system is changing rapidly. Technological advances are reshaping how energy is produced and consumed, while geopolitical tensions, supply disruptions and a changing climate have exposed the dangers of relying on an increasingly vulnerable fossil-fuel system. In New Energy Outlook 2026, BloombergNEF maps three pathways for how this energy transition could unfold through 2050: a technology-led Economic Transition Scenario (ETS), a credible maximum-effort Net Zero Scenario (NZS), and a No Transition Scenario (NTS), in which decarbonization largely stalls. This report answers a simple question: what do those different energy futures mean for the global economy?
BNEF partnered with Bloomberg Economics to embed these energy pathways in a global, computable general equilibrium model. We find that the macroeconomic cost of the energy transition is manageable globally, but highly uneven in its distribution impacts. The economics of the transition improve materially once avoided physical climate damage is included. The ETS is already net beneficial for the world economy by 2050. The NZS has higher upfront costs but a much larger payoff in the long term. The central economic challenge, therefore, is not the aggregate cost of the transition, but how it redistributes growth between countries, sectors and generations.
- On transition costs alone, a technology-led transition is economically inexpensive in aggregate. Under BNEF’s Economic Transition Scenario, global GDP is only around 0.1% below a world without the transition by 2050, despite emissions falling by almost 20%.
- Achieving net zero emissions by midcentury remains affordable. BNEF’s least-cost Net Zero Scenario reduces global GDP by about 3% relative to the No Transition Scenario by 2050, broadly in line with estimates across the climate-economics literature.
- Beyond these modest global outcomes, the transition has important distributional implications. Economies heavily dependent on coal, oil and gas production lose income as global fossil-fuel demand declines. By contrast, countries with strong clean-technology industries or abundant low-cost clean power perform significantly better.
- China stands out. Its position as a major producer, deployer, and exporter of clean technologies helps offset losses in its coal sector.
- Technological shifts drive most of the economic adjustment under the ETS. As renewable electricity becomes cheaper and easier to use, firms shift away from fossil fuels. That cuts energy costs, boosts investment in energy infrastructure and supports demand for green technology – largely at the expense of fossil-fuel producers.
- More ambitious emissions cuts impose broader costs when they go beyond what shifts in relative costs would imply, forcing economies to tackle harder-to-abate emissions. This channel affects a few advanced economies under the ETS but becomes broader and more dominant under the NZS.
- Lower emissions under the ETS – and even more so under the NZS – curb temperature increases and the resulting climate damage relative to a no-transition scenario. By 2050, avoided damages more than offset the modest transition costs under the ETS, worldwide and in almost every region.
- The NZS takes longer to pay off. By 2050, avoided physical damage offsets roughly half the global cost of reaching net zero, but largely exceeds it by 2100.
- Approach: This research combines BloombergNEF’s proprietary New Energy Outlook energy-system pathways with Bloomberg Economics’ global macroeconomic modeling framework to quantify how different transition routes reshape growth, investment, trade and sectoral activity through 2050. It translates BNEF’s bottom-up projections for technology costs, electrification, fuel demand, power generation and emissions into a global computable general equilibrium model. This allows energy-system changes to flow through prices, capital allocation, household income, competitiveness and cross-border trade. The result is an integrated assessment of both transition costs and avoided physical climate damages that shows how the energy transition affects economic outcomes across markets.
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