Meeting the challenges of climate change requires structuring actions from all stakeholders. Most governments and a growing number of companies have now set ambitious targets for carbon neutrality. However, achieving these targets requires a structural transformation of budget balances and economic models, raising questions about their sustainability for business, households and governments alike.

Anticipating these transformations means quantifying future impacts to build coherent and achievable strategies. To guarantee the robustness of prospective trajectories, it is necessary to into account both the realism of short-term behaviours (e.g., frictions, biases, rigidities) and the long-term drivers of macroeconomic fluctuations. Integrating these factors into the Deloitte REACT model makes it possible to quantitative assess the collective capacity to undertake a transformation with sufficient ambitions and speed, without compromising economic viability and acceptability to the various stakeholders.

The Deloitte REACT macroeconomic model is a powerful tool for strategic planning in an uncertain world. Deloitte REACT can simulate various policy scenarios and macroeconomic shocks, then quantify their impacts on a wide range of aggregate and sectoral indicators. It draws on the most recent academic methods implemented by the European Commission to provide a credible representation of market dynamics through more than a hundred equations. In particular, Deloitte REACT offers a comprehensive depiction of fiscal levers (direct and indirect taxation, social contributions, subsidies, transfers) and monetary policy. The model’s results provide a robust overview of main macroeconomic trends, while taking account of sectoral specificities including the key role of energy in long-term growth.

Deloitte REACT is a flexible, transparent and modular tool. Already calibrated on a dozen sectors at the scale of the Eurozone, it can be extended to other sectors and geographies. The panel of climate policy levers and economic indicators enables Deloitte REACT to address a wide range of issues, from assessing the impact of public policies, to designing decarbonization roadmaps, or conducting carrying out multi-sectoral scenario analyses. Our model can also be deployed with Deloitte's other techno-economic tools, including the DARE model offering a detailed representation of the European energy system, to provide a complete economic analysis combining the credibility of macroeconomic trends and the granularity of technological choices.

• Customization: Deloitte REACT's flexibility makes it possible to meet each specific need while limiting development costs.
• Robustness: The many parameters and sensitivity options of the scenarios allow to quantify the trends and uncertainties of decarbonization trajectories.
• Plug & Play: The fast-paced configuration of the model is facilitated by the expertise of our team and the calibration process of Deloitte REACT, based on public data.