Climate Pragmatism as Macroeconomic Stabilization: Stress-Testing Energy-Price-Driven Inflation

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a macroeconomic stress-test methodology for evaluating transition pathways, including a novel inflation wedge metric.

🏢実務担当者:Highlights how maintaining O&G capacity can hedge against energy price volatility during transition, informing corporate energy procurement strategies.

🏛政策担当者:Informs energy policy design by showing that rigid phase-out targets may exacerbate inflation and social costs, supporting a more adaptive approach.

Abstract Objectives/Scope This paper examines the socio-economic implications of rapid decarbonization through an integrated framework combining climate pragmatism and sustainable abundance. It analyzes the role of the oil and gas sector as a potential macroeconomic stabilizer, focusing on the energy-price channel. By comparing accelerated phase-out strategies with pragmatic transition pathways, the study assesses whether maintaining flexible O&G capacity can mitigate energy price shocks and reduce greenflation risks linked to supply constraints and capital misallocation. Methods, Procedures, Process The study employs a qualitative, multidimensional research design rooted in the political economy of energy. The methodology involves a comparative analysis of current energy transition models, contrasting prescriptive binary phase-out narratives with an abundance-centric approach. The research process began with an extensive literature review of energy justice, sustainable finance, and industrial transition theories. This was followed by a structural analysis of the O&G sector's existing capital depth and infrastructure—such as pipeline networks and geological expertise—to evaluate their transferability to carbon management and hydrogen economies. Finally, to operationalize greenflation risk, we complement the qualitative assessment with a transparent scenario-based numerical stress test that simulates monthly energy price index changes under an accelerated phase-out versus a pragmatic transition, and maps these price shocks into an energy-driven inflation contribution and an inflation wedge metric. Results, Observations, Conclusions The analysis indicates that a pragmatic transition model, which leverages the O&G sector's unique capacity for large-scale engineering and capital-intensive investment, is more robust than immediate industrial excision. Consistent with this claim, the stress test implies lower tail risk of energy-price spikes and a smaller cumulative energy-driven inflation wedge under the pragmatic pathway relative to an accelerated phase-out. The study concludes that the pursuit of sustainable abundance benefits from the industry's participation to mitigate the severe social dislocation and labor market shocks associated with managed decline. Ultimately, we find that the path to a low-carbon future is best navigated through adaptive, productivity-centric institutional strategies that prioritize social cohesion over rigid, one-size-fits-all decarbonization pathways

• openalex https://doi.org/10.2118/233274-msfirst seen 2026-07-13 05:10:00