Fig. 4: The growth effects in the absence of climate policy (a, b) and under economically optimal mitigation of emissions (c, d).
From: Investment incentive reduced by climate damages can be restored by optimal policy
a Unadjusted investment behaviour and particularly optimal investment lead to cumulative investment gaps through the climate effect on growth and the additional investment effect, respectively. b The income losses that occur for unadjusted investment behaviour (direct damage costs and the hereby induced growth effects) and for optimal investment (additional investment effect). c, d Economically optimal climate policy diminishes the climate effect on growth and renders the additional investment effect to be insignificant for (c) cumulative investment and for (d) income losses. Source data are provided as a Source Data file.
