Assessing the economic consequences of an energy transition through a biophysical stock-flow consistent model

The biophysical foundations of socio-economic systems are underrepresented in the vast majority of macroe-conomic models. This lack is particularly troublesome when considering the links between energy, matter and the economy in the context of the energy transition. As a remedy, we present here a biophysical stock-flow consistent macroeconomic model calibrated at the global scale, that combines detailed bottom-up estimates for the high capital intensity of renewable energies and the decreasing energy return on investment (EROI) of fossil fuels. We find that the completion of a global energy transition scenario compatible with the 1.5 degrees C objective of the Paris Agreement leads to a decrease of the system's EROI and to high investment share, employment and inflation trends, characteristic of a "war economy". Our results further indicate that a slower growth rate eases the transition, and call for further work on post-growth scenarios studies.