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NGFS Short-term Scenarios

Status

ongoing

Role

Modeling Consortium: EIRIN

External Link

project website

Project Details

The NGFS short-term scenarios provide a better understanding of the near-term macro-financial impacts of (i) the transition towards a net zero global economy, and (ii) severe but already plausible climate events, in a policy-relevant timeframe.

They are calibrated to provide adverse macroeconomic pathways, more closely aligned with recent trends in extreme weather events. Key innovations include:

  • modelling of compound extreme climate events (simultaneous occurrences of multiple hazards such as floods, storms, heatwaves, droughts, and wildfires)
  • incorporating cross-regional transmission of shocks (short-term spillover effects of both transition and physical shocks through trade and financial linkages)
  • providing a framework to study the interplay between climate risks and business cycles, by integrating climate policy, extreme weather events, economic trends and sectoral dynamics
  • zooming in on a policy-relevant timeframe for financial stability and monetary policy
  • providing granular economic data across a wide range of sectors and countries

These features make the short-term scenarios particularly well-suited for climate stress-testing exercises and for analysing financial risks that may materialise within a business-planning, policy-relevant timeframe. The NGFS long-term scenarios remain more appropriate for strategic longer term risk assessments, to analyse structural changes in the economy or to assess how strategic policy or business decisions could affect the risks for financial institutions in the longer term.

More information on the scenarios can be found on the NGFS website.

Related Publications

NGFS Phase 5 Short Term Scenarios

Stefano Battiston, Dimitris Fragkiadakis, Philip Hackstock, Antoine Mandel, Andrea Mazzocchetti, Irene Monasterolo, Karl Naumann-Woleske, Leonidas Paroussos, Yong JU, Bas van Ruijven, Stelios Tsiaras
Zenodo2025DOI