the model as an exogenous shock. The additional investment, relative to a baseline, is paid for by an increase in public and private savings which, in turn, reduces total consumption in the economy. However, we do not add all power sector investments to the capital stock to account for the fact that the low-carbon transition would require the earlier retirement of some fossil fuel power plants. We assume that only 75% of additional new investments needed to shift from the baseline to the RNZP would be added to the capital stock, with the 25% delivering only climate-related benefits.

- **Transport** : Taking the transport decarbonization trajectory shown in the RNZP scenario, we adjust the share of electricity and fossil fuels in total road transport sector energy demand and household consumption to reflect electrification of the sector. We also increase the energy efficiency of fossil fuel use in the transportation sector to reflect efficiency gains from fleet modernization and shifts to more efficient modes such as rail. Investment needs for the transition in the transportation sector are introduced into the model in the same way as the energy scenarios.

- **Buildings:** We follow the same approach as for transport in buildings. Until 2030, we only allow for the adjustment of energy efficiency gains in the service and household sectors to achieve the reported emission levels. After 2030, when electrification starts in the sector scenario, we adjust the share of electricity in intermediate demand in the service sectors and in household consumption. Investment demand is assumed to be primarily for the building sector. Unlike the power sector scenario, we assume that investment in the construction sector would only transform the building stock of the baseline and that, therefore, would not increase the capital stock or the productive capacity of the whole economy, compared with the baseline. (It means that we disregard gains in terms of comfort and health from more efficient buildings.)

- **Forest landscapes:** We increase the capacity of forests to sequester carbon, consistent with the findings of the forest landscape analysis. This is achieved by subsidizing the forest service sector that provides services for improved forest management. Therefore, unlike the other scenarios, the forestry scenario does not change investments but rather imposes the costs of the green transition through increased subsidies paid by the government. This is consistent with the sectoral analysis, in which the investment needs in the sector are relatively low at the macro level. In other words, in the CGE model, we assume that the carbon sequestration intensity of forests can be increased through better forest management, measured in the model as an increase in the supply of forest services from the existing capital stock in the forest sector.

In the macroeconomic simulations of the RNZP, we run the scenarios in two steps: First, we calibrate the model to replicate the results of the sectoral analysis; Second, we use these calibrated parameters in the general equilibrium framework (which will lead to slightly different results at the sectoral level, when macroeconomic effects, such as cross-sectoral effects, are considered). Table 1 presents the main channels of linkages between sectoral models and the CGE model. This is not a full integration of the sectoral scenarios with the general equilibrium simulations, in the sense that there is no two-way coupling: the sectoral scenarios are not modified in response to the outcome of the CGE. However, since the sector scenarios are technoeconomic roadmaps describing the evolution of the sector (without representing the behaviors and policies responsible for this evolution), this does not create inconsistency.

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