Climate scenarios have been developed by the Network for Greening the Financial System (NGFS) to provide a common starting point for analysing climate risks to the economy and financial system. They are intended as a tool for central banks and supervisors, as well as broader private sector, government and academia.
This second iteration follows the inaugural edition published in June 2020. It brings the NGFS scenarios up to date, including by incorporating countries’ commitments to reach net-zero emissions.
The paper considers how the global transition to net zero by 2050 might play out in different sections of the economy. This includes rapid decarbonisation of electricity, increasing electrification, more efficient uses of resources, and a spectrum of new technologies to tackle remaining hard-to-abate emissions.
It finds that the impacts on the economy will be modest, and even positive depending on how smoothly the transition occurs. But in scenarios where the policy response is divergent or delayed, increased macrofinancial risks could crystallise.
This page was last updated October 22, 2021
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