Guide on Climate Scenario Analysis for Central Banks and Supervisors
This guide provides practical advice on using scenario analysis to assess climate risks to the economy and financial system.
The forward-looking nature of climate risks and the inherent uncertainty about future events make them difficult to assess using standard risk modelling methodologies. Scenario analysis offers a flexible what-if framework that is better suited to exploring risks that could materialize in different possible futures.
The guide is based on the initial experiences of NGFS members and observers, including scenario analysis conducted by researchers at the Bank of Canada.
Alongside the guide is a set of reference scenarios from external model providers that estimate various macroeconomic impacts of climate change.