Avoiding the Peril of Divergent Net Zero
October 26, 2022 | Updated at October 26, 2022
By Dr. Eman Tabet, Research Associate, RFI Foundation
Emerging market financial institutions considering financial risks related to climate change will benefit from some harmonisation of climate scenarios. However, many are more susceptible to physical risks and specific types of transition risk. It is important that the scenarios used for climate risk-related assessment and response are relevant to emerging markets and do not contribute to unevenly shifting transition risk from developed to emerging markets.Climate models used to create climate scenarios by organisations such as the NGFS all have limitations due to the simplifying assumptions they need to be operableModels are used to build scenarios that financial institutions, regulators, investors...