Before revision:  By modelling the process of innovation-diffusion and  non-equilibrium dynamics, we establish how climate policy instruments for emissions reductions alter economic activity through energy prices, government spending, enhanced investment and tax revenues. While higher electricity prices reduce income and output, this is over-compensated by enhanced employment generated by investments in new technology. We stress that the current dialogue on the impacts of climate policies must be revisited to reflect the real complex dynamics involved in the global economy, not captured by conventional models .
After revision:  By modelling the process of innovation-diffusion and non-equilibrium approaches suggest the opposite could occur. We show that the solution to understanding the economic impacts of reducing greenhouse gas emissions lies with research on the dynamics of the financial sector interacting with innovation and technology developments, economic history providing powerful insights through important analogies with previous historical waves of innovation .