Mapping global financial risks under climate change

Carney, M. Breaking the Tragedy of the Horizon—Climate Change and Financial Stability (Bank of England, 2015); https://www.bankofengland.co.uk/speech/2015/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability

A Call for Action: Climate Change as a Source of Financial Risk (NGFS, 2019).

Conceptual Note on Short-Term Climate Scenarios (NGFS, 2023).

Blake, E.S. et al. Costliest US Tropical Cyclones Tables Updated (National Hurricane Center, 2021); https://www.nhc.noaa.gov/news/UpdatedCostliest.pdf

Weather and Climate Extremes in Asia Killed Thousands, Displaced Millions and Cost Billions in 2020 (World Meteorological Organization, 2021); https://wmo.int/media/news/weather-and-climate-extremes-asia-killed-thousands-displaced-millions-and-cost-billions-2020#:~:text=Geneva%2C%2026%20October%202021%20(WMO,toll%20on%20infrastructure%20and%20ecosystems

Special Report: Update to the Economic Costs of Natural Disasters in Australia (Deloitte, 2021); https://www.deloitte.com/content/dam/assets-zone1/au/en/docs/services/economics/deloitte-au-economics-abr-natural-disasters-061021.pdf

IPCC Climate Change 2021: The Physical Science Basis (eds Masson-Delmotte, V. et al.) (Cambridge Univ. Press, 2021); https://doi.org/10.1017/9781009157896

Weitzman, M. L. On modeling and interpreting the economics of catastrophic climate change. Rev. Econ. Stat. 91, 1–19 (2009).

Article 

Google Scholar 

Pindyck, R. S. Climate change policy: what do the models tell us? J. Econ. Lit. 51, 860–872 (2013).

Article 

Google Scholar 

Bressan, G., Duranović, A., Monasterolo, I. & Battiston, S. Asset-level assessment of climate physical risk matters for adaptation finance. Nat. Commun. 15, 5371 (2024).

Article 
CAS 

Google Scholar 

Le Guenedal, T., Drobinski, P. & Tankov, P. Measuring and pricing cyclone-related physical risk under changing climate. Amundi Research Working Paper 111 (2021); https://research-center.amundi.com/files/nuxeo/dl/683eaa33-0ded-41e5-a604-8bea583d4def?inline=

Mandel, A. et al. Risks on global financial stability induced by climate change: the case of flood risks. Climatic Change 166, 4 (2021).

Article 

Google Scholar 

Calabrese, R., Dombrowski, T., Mandel, A., Pace, R. K. & Zanin, L. Impacts of extreme weather events on mortgage risks and their evolution under climate change: a case study on florida. Eur. J. Oper. Res. 314, 377–392 (2024).

Article 

Google Scholar 

Dietz, S., Bowen, A., Dixon, C. & Gradwell, P. Climate value at risk of global financial assets. Nat. Clim. Change 6, 676–679 (2016).

Article 

Google Scholar 

Hain, L. I., Koelbel, J. F. & Leippold, M. Let’s get physical: comparing metrics of physical climate risk. Financ. Res. Lett. 46, 102406 (2022).

Article 

Google Scholar 

Guide on Climate-Related and Environmental Risks: Supervisory Expectations Relating to Risk Management and Disclosure (European Central Bank, 2020).

Basel Committee on Banking Supervision Basel III: Finalising Post-crisis Reforms (Bank for International Settlements, 2021).

Bertram, C. et al. NGFS Climate Scenario Database: Technical Documentation v2.2 (NGFS, 2021).

MSCI ACWI Index (USD) (MSCI, 2021); https://www.msci.com/documents/10199/8d97d244-4685-4200-a24c-3e2942e3adeb

Mahony, M. & Timmer, M. P. Output, input and productivity measures at the industry level: the EU KLEMS database. Econ. J. 119, 374–403 (2009).

Article 

Google Scholar 

Multi-hazard Loss Estimation Methodology, Earthquake Model, Hazus-mh 2.1, Technical Manual (FEMA, 2013).

IPCC Climate Change 2014: Synthesis Report (eds Core Writing Team, Pachauri, R. K. & Meyer L. A.) (IPCC, 2014); https://www.ipcc.ch/report/ar5/syr/

Damodaran, A. Damodaran Online (accessed 6 January 2024).

Hallegatte, S., Hourcade, J.-C. & Dumas, P. Why economic dynamics matter in assessing climate change damages: illustration on extreme events. Ecol. Econ. 62, 330–340 (2007).

Article 

Google Scholar 

Oosterhaven, J. & Többen, J. Wider economic impacts of heavy flooding in germany: a non-linear programming approach. Spat. Econ. Anal. 12, 404–428 (2017).

Article 

Google Scholar 

Semieniuk, G. et al. Stranded fossil-fuel assets translate to major losses for investors in advanced economies. Nat. Clim. Change 12, 532–538 (2022).

Article 

Google Scholar 

Schubert, J. E., Mach, K. J. & Sanders, B. F. National-scale flood hazard data unfit for urban risk management. Earths Future 12, 2024–004549 (2024).

Article 

Google Scholar 

Battiston, S., Monasterolo, I., Riahi, K. & Ruijven, B. J. Accounting for finance is key for climate mitigation pathways. Science 372, 918–920 (2021).

Article 
CAS 

Google Scholar 

Moss, R. H. et al. The next generation of scenarios for climate change research and assessment. Nature 463, 747–756 (2010).

Article 
CAS 

Google Scholar 

Warszawski, L. et al. The Inter-sectoral Impact Model Intercomparison Project (ISI–MIP): project framework. Proc. Natl Acad. Sci. USA 111, 3228–3232 (2014).

Article 
CAS 

Google Scholar 

Frieler, K. et al. Assessing the impacts of 1.5 °C global warming–simulation protocol of the Inter-sectoral Impact Model Intercomparison Project (ISIMIP2b). Geosci. Model Dev. 10, 4321–4345 (2017).

Article 

Google Scholar 

Dufresne, J.-L. et al. Climate change projections using the IPSLl-CM5 Earth system model: from CMIP3 to CMIP5. Clim. Dyn. 40, 2123–2165 (2013).

Article 

Google Scholar 

Aznar-Siguan, G. & Bresch, D. N. Climada v1: a global weather and climate risk assessment platform. Geosci. Model Dev. 12, 3085–3097 (2019).

Article 

Google Scholar 

Knapp, K. R., Kruk, M. C., Levinson, D. H., Diamond, H. J. & Neumann, C. J. The International Best Track Archive for Climate Stewardship (IBTRACS) unifying tropical cyclone data. Bull. Am. Meteorol. Soc. 91, 363–376 (2010).

Article 

Google Scholar 

Knutson, T. R. et al. Global projections of intense tropical cyclone activity for the late twenty-first century from dynamical downscaling of CMIP5/RCP4.5 scenarios. J. Clim. 28, 7203–7224 (2015).

Article 

Google Scholar 

Emanuel, K. Global warming effects on US hurricane damage. Weather Clim. Soc. 3, 261–268 (2011).

Article 

Google Scholar 

Synthetic Windstorm Events for Europe from 1986 to 2011 (Copernicus Climate Change Service Climate Data Store, 2022); https://doi.org/10.24381/cds.ce973f02

Feser, F. et al. Storminess over the North Atlantic and northwestern European review. Q. J. R. Meteorol. Soc. 141, 350–382 (2015).

Article 

Google Scholar 

Ranson, M., Tarquinio, L. & Lew, A. Modeling the Impact of Climate Change on Extreme Weather Losses. Environmental Economics Working Paper Series 02 (US Environmental Protection Agency, 2016); https://www.epa.gov/sites/default/files/2016-05/documents/2016-02.pdf

Feuerstein, B. et al. Towards an improved wind speed scale and damage description adapted for central europe. Atmos. Res. 100, 547–564 (2011).

Article 

Google Scholar 

Ward, P. J. et al. Aqueduct Floods Methodology (World Resources Institute, 2020).

Winsemius, H., Van Beek, L., Jongman, B., Ward, P. & Bouwman, A. A framework for global river flood risk assessments. Hydrol. Earth Syst. Sci. 17, 1871–1892 (2013).

Article 

Google Scholar 

Huizinga, J. et al. Global Flood Depth–Damage Dunctions: Methodology and the Database with Guidelines (Joint Research Centre, 2017).

Fire Burned Area from 2001 to Present Derived from Satellite Observations (Copernicus Climate Change Service (Climate Data Store, 2019); https://doi.org/10.24381/cds.f333cf85

Land Cover CCI Product User Guide Version 2.0 (ESA, 2017). http://maps.elie.ucl.ac.be/CCI/viewer/download/ESACCI-LC-Ph2-PUGv2_2.0.pdf

Pettinari, M.L., Lizundia-Loiola, J. & Chuvieco, E. ESA CCI ECV Fire Disturbance: D4.2 Product User Guide – MODIS v.1.0. (ESA, 2020); https://www.esa-fire-cci.org/documents

Sullivan, A. et al. Spreading Like Wildfire: The Rising Threat of Extraordinary Landscape Fires (United Nations Environment Programme, 2022); https://wedocs.unep.org/bitstream/handle/20.500.11822/38372/wildfire_RRA.pdf

Nadim, F., Kjekstad, O., Peduzzi, P., Herold, C. & Jaedicke, C. Global landslide and avalanche hotspots. Landslides 3, 159–173 (2006).

Article 

Google Scholar 

Hicks, D. A way to estimate the frequency of rainfall-induced mass movements (note). J. Hydrol. 33, 59–67 (1995).

Crozier, M. J. Deciphering the effect of climate change on landslide activity: a review. Geomorphology 124, 260–267 (2010).

Article 

Google Scholar 

Dasgupta, S. et al. Effects of climate change on combined labour productivity and supply: an empirical, multi-model study. Lancet Planet. Health 5, 455–465 (2021).

Article 

Google Scholar 

Stull, R. Wet-bulb temperature from relative humidity and air temperature. J. Appl. Meteorol. Climatol. 50, 2267–2269 (2011).

Article 

Google Scholar 

Kjellstrom, T. et al. Occupational Heat Stress: Contribution to WHO Project on “Global assessment of the health impacts of climate change”, Which Started in 2009 (HEIT, 2014).

Santos, J.A. & Viswanathan, S.V. Bank Syndicates and Liquidity Provision (NBER, 2020).

Merton, R. C. On the pricing of corporate debt: the risk structure of interest rates. J. Financ. 29, 449–470 (1974).

Google Scholar 

Battiston, S., Mandel, A., Monasterolo, I. & Roncoroni, A. Climate credit risk and corporate valuation. SSRN (2023).

Garbarino, N. & Guin, B. High water, no marks? Biased lending after extreme weather. J. Financ. Stab. 54, 100874 (2021).

Article 

Google Scholar 

Nguyen, D. D., Ongena, S., Qi, S. & Sila, V. Climate change risk and the cost of mortgage credit. Rev. Financ. 26, 1509–1549 (2022).

Article 

Google Scholar 

Deghi, A. et al. Global Financial Stability Report: Markets in the Time of COVID-19 (IMF, 2021).

Gostlow, G. Anything goes: pricing physical climate risk. SSRN (2024).

Acharya, V.V., Johnson, T., Sundaresan, S. & Tomunen, T. Is Physical Climate Risk Priced? Evidence from Regional Variation in Exposure to Heat Stress (NBER, 2022).

Kruttli, M.S., Roth Tran, B. & Watugala, S.W. Pricing Poseidon: extreme weather uncertainty and firm return dynamics. SSRN (2023).

Braun, A., Braun, J. & Weigert, F. Extreme weather risk and the cross-section of stock returns. SSRN (2021).

Briere, M., Duranovic, A., Huynh, K., Monasterolo, I. & Ramelli, S. Does the Stock Market Price Physical Climate Risks? (Amundi, 2024).

Hong, H., Li, F. W. & Xu, J. Climate risks and market efficiency. J. Econ. 208, 265–281 (2019).

Article 

Google Scholar