As the urgency to address climate change comes up against geopolitical shifts and socio-economic hurdles, it is easy to wonder whether a net-zero world will ever be within reach. The truth is, the net-zero transition is not only possible, it has already begun – and it’s bringing economic opportunities.

OECD analysis out this year shows that accelerated climate action could lift global GDP slightly by 2040, compared with current policy scenarios. Over the longer term, the economic case for enhanced action becomes even clearer as avoided climate damages would far outweigh the costs of action.

For the pessimists, the picture is undeniably grim. Last year, the global average temperature temporarily surpassed the critical 1.5°C threshold for the first time. Climate pledges are currently insufficient to prevent long-term warming above that level, and a slowing in the pace of implementing climate policy is jeopardizing the emissions-cutting scenarios we’ve laid out. The climate disasters we’ve seen in recent months and years, from the devastating floods in Spain to the wildfires that ravaged Los Angeles, are stark precursors to the hazards we face if we fail to move faster to cut emissions and build resilience.

Amid these sobering realities, the OECD’s Net Zero+ initiative on climate and economic resilience offers a glimmer of hope. The broad range of OECD research and analysis that Net Zero+ II brings together shows how taking faster and more decisive action to implement ambitious, well-designed climate policies, can accelerate progress. Of all the findings that emerge from Net Zero+ II, the primary message is that reaching net zero is still a reality.

Clean energy sources are beginning to compete with fossil fuels, marking a turning point in the global energy landscape. In 2023, the market for solar PV, wind, electric vehicles, and other key clean technologies surpassed USD 700 billion. Projections show that by 2035 this market could be on a par with today’s global crude oil market. Since the Paris Agreement was signed in 2015, solar PV capacity has leapt by over 400%, while stationary battery storage has ballooned by 2,500%. Clean hydrogen costs could decrease by as much as 60% by 2030. These trends suggest that with the right policy decisions, the scale and pace of the change needed for a sustainable energy future is within reach.   

Government support has played a pivotal role in catalysing the growth of clean energy by helping to leverage economies of scale and "learning by doing”, which have driven cost reductions and rapid deployment of new technologies. The cost of solar PV has fallen by 80-90% each decade since the 1960s, dropping 20% for every doubling of installed capacity. These breakthroughs demonstrate the power of targeted government intervention in fostering innovation and scaling clean energy solutions. On the other hand, bad policy design risks stagnation. Overzealous subsidies, while well-meaning, can create market distortions, resulting in overcapacity and artificially low prices that crowd out more efficient, innovative, and climate-friendly suppliers and curtailing international trade in clean-energy technologies. Evidence suggests this may already be the case for solar PV, wind, and battery electric vehicles, calling into question the idea of crossing positive technological tipping points.

To address these risks, diversifying policy approaches and effectively packaging and sequencing individual policies can reap considerable benefits. Most policies work best as part of broader strategies, and order and timing matters. The right sequencing can maximize synergies, avoid unintended consequences, and build the enabling conditions for transformative change. This means governments taking advantage of the full suite of policy instruments at their disposal, from regulations and taxes to public investment and behavioural incentives.

Policy efforts should shift toward areas where they can have the most impact. Demand-side measures – such as improving energy efficiency, promoting sustainable transport or shifting food consumption patterns – could reduce global greenhouse gas emissions in end-use sectors by 40–70% by 2050. Yet these remain underutilised. Achieving net zero requires energy savings per capita to increase fifteenfold compared with announced pledges, a goal that hinges on changing consumer behaviour. But individuals make choices based on affordability, availability, and convenience, so climate policy must address these concerns to succeed.

Reducing methane emissions offers one of the fastest, most cost-effective ways to slow global warming. Like pulling a handbrake, a 30% reduction in global methane emissions by 2030 could reduce warming by 0.2°C by 2050. In the energy sector, a 75% reduction is needed by 2030 to align with a 1.5°C pathway. The technologies to do this exist and are cheap, costing less than 5% of the oil and gas industry’s 2023 annual revenue. Regulations have proven to be effective in ensuring these technologies are implemented.

Governments face complex trade-offs that require new governance approaches. Meeting climate targets while safeguarding biodiversity, supporting economic growth, and promoting social equity demands careful coordination and long-term planning that extends beyond political cycles. This calls for institutional innovation: building state capacity, developing integrated strategies, and ensuring that governments are agile enough to respond to emerging challenges without losing sight of long-term goals.

Governments have the tools they need to accelerate progress. But implementing effective climate policy ultimately depends on people. The transition to net zero must be fair and grounded in public support. That means bringing citizens on board, empowering workers, and ensuring that no one is left behind. How to do this will be explored in the next Net Zero+ II blog post.