Central banks warn: 13% of global GDP would be at risk by end of century, even before accounting for severe weather events.
The NGFS (Network for Greening the Financial System) has published the second vintage of its climate scenarios and a dedicated website, both aimed at fostering the integration of climate-related risks into the work of central banks and supervisors.
The NGFS scenarios have been brought up to date, including by incorporating countries’ commitments to reach net-zero emissions, an expanded set of macroeconomic variables, and additional country and sector-level granularity.
The newly-launched NGFS scenarios website will serve as a portal to the scenarios and provides access to all related NGFS publications and data. It also provides interactive visualisations of the scenarios and background resources, and a link to a new Climate Impact Explorer where users can explore and download detailed physical risk data.
“Changes to our climate are unprecedented and so past data are a poor guide to the risks that may materialise in the future,” the NGFS said in a statement. “The NGFS scenarios provide a framework to assess and manage the future financial and economic risks that changes to our climate might bring.”
The scenarios provide a coherent set of transition pathways, climate impact projections, and economic indicators at country level – over a long time horizon and under varying assumptions – offering a foundation for scenario analysis, consistency and comparability of results across institutions.
The scenarios illustrate that reaching net zero CO2 emissions by 2050 on a global basis will require an ambitious transition across all sectors of the economy, including significant investment flows towards clean energy and changes in land-use.
“If these changes occur in an orderly fashion, the scenarios suggest that it could lead to some increase in global GDP, and lower unemployment relative to prior trends,” the NGFS says. “These results could be reversed, however, if the transition is disorderly, for example if meaningful action is delayed such that more severe policies must be introduced later in the horizon to compensate.”
If the transition fails, analysis from the NGFS scenarios suggests that up to 13 percent of global GDP would be at risk by the end of the century, even before accounting for the potential consequences of severe weather events.
The NGFS intends to continue to develop and enrich its scenarios to make them more comprehensive, including by adding further sectoral granularity and improving the integration of the suite of models.