Sensitivity of future regional and global energy markets and macroeconomic activity to a hypothetical global energy market disruption.

In this paper we contribute to a long history of research studying interactions between energy systems, international energy trade, and macroeconomic activity. We develop and employ methods to quantify transmission pathways for energy markets to affect the macroeconomy and CO emissions. We track the long-term consequences of a hypothetical permanent disruption to global energy markets, cession of Russian fossil fuel exports, for energy markets, regional and global economic activity (gross domestic product [GDP]), labor and capital markets, and CO emissions against two dramatically different reference scenarios. Relative to our first reference scenario, we find that fossil fuel exports contribute roughly one-half-trillion dollars/year to Russian GDP in 2050. We find that by 2050 global GDP is largely unaffected by the loss of Russian fossil fuel exports with all the benefits accruing to non-Russian energy exports, e.g., the Middle East. We track transmission mechanisms including net exports, energy services, and capital and labor market feedback.