The AI race is already generating forces that are transforming the global economy. That makes it surprisingly similar to the green transition, given the potential of both to upend traditional industries, labour markets, and geopolitical balances. Both call for trillions of dollars in upfront investments in exchange for significant benefits over the medium and long term.
The promise of AI is that it will cut unnecessary costs, boost labour productivity, and help humans solve previously intractable problems. Equally, the green transition would do nothing less than contain climate change, the mother of all global externalities. It would eliminate the risk of both "climateflation" (higher prices caused by climate-driven supply shocks) and "fossilflation" (when hydrocarbon supply shocks, like the one caused by the current closure of the Strait of Hormuz, reverberate through the world economy). It would also improve public health, increase economic resilience, create jobs, preserve fragile ecosystems, and deliver many additional benefits.
