WASHINGTON, (Reuters) – The rapid transition to renewable energy to stop rising temperatures could shave 2% from global GDP by 2050. However, it is possible to recover before the end the century. This was according to a Wood Mackenzie report.

Although investments in technology like advanced batteries and solar farms will produce jobs, there will likely be a decline in jobs and taxes in fossil fuel production, as stated in the report “No Pain, No Gain”: Economic consequences of the acceleration of the energy transition.

Peter Martin, WoodMac chief economist said that “it’s not a way of saying we shouldn’t pursue transformation or slow it down.” “The long-term benefits of this pain will outweigh the inconvenience in the short term.”

According to the UN, limiting temperature rises below 1.5 degrees Celsius could have global economic benefits that would increase GDP by approximately 1.6% by 2050. The report stated that the 2.2% cut in GDP could be achieved if actions are taken to accelerate the temperature reduction.

These impacts won’t be equally felt. China will absorb 27% of the cumulative global economic hit of $75 trillion by 2050. Meanwhile, the United States will receive about 12% and Europe, 11% respectively. India will only experience 7%.

According to it, the most severe economic loss could be in countries like Iraq where there are no financial resources available for non-fossil energy sectors.

The best positioned economies will be those with strong capital markets, which have large investments in energy transformation technologies. France and Switzerland will see a slight boost in economic growth.

According to the report, economic gains from the energy transition must begin to manifest after 2035. Lost economic output will eventually be recouped by the end of the century.