Modelling the European Union Sustainability Transition: A Soft-Linking Approach

The European Green Deal (EGD) is the most ambitious decarbonisation strategy currently envisaged, with a complex mix of different instruments aiming at improving sustainability development patterns Union in next 30 years. intrinsic complexity brings key open questions on cost and effectiveness strategy. In this paper we propose novel methodological approach to soft-linking two modelling tools, systems thinking (ST) computable general equilibrium (CGE) model, order provide broader ex-ante policy evaluation process. We use ST highlight main economic feedback loops EGD might trigger. then quantify these scenario analysis developed dynamic CGE framework. Our finding that such allows discovery multiple channels spillover effects across help improve design. Specifically, positive spillovers arise from adoption revenue recycling mechanism ensures strong support for diffusion clean energy technologies. Such benefit not only (EU) market but also non-EU countries via trade-based technology transfer, net effect terms global emissions reduction.