Heterogeneous Decarbonization: Technology-Specific Renewable Shocks and Asymmetric Emissions Responses Across the Global Economy

Climate policy often assumes that renewable energy deployment produces similar emission reductions across countries, despite major differences in grid flexibility and fuel substitution capacity. Using the GTAP-E-Power computable general equilibrium framework calibrated to eight global regions and twenty-two sectors, together with panel data for 59 countries from 2000 to 2023, this paper examines how technology-specific renewable shocks affect emissions, production, and welfare. The results reveal a heterogeneous rebound problem in which developing economies with rigid grids experience emissions declines of 16–33% through output contraction, while advanced economies substitute toward fossil generation, producing rebound effects of up to 39% under solar shocks. Solar shocks generate the strongest rebounds, while firm zero-emission baseload contractions intensify coal substitution. Demand-side efficiency policies generate substantial welfare gains but impose negative spillovers on trade-exposed regions. Fixed-effects and Bayesian Ridge methods consistently confirm a robust emissions-reducing effect of renewable energy deployment, with a fixed-effects elasticity of -0.30 and a Bayesian Ridge posterior mean of -0.40.