Global central banks to issue new climate scenarios after earlier model controversy
The central bankers’ group including the ECB and PBOC has been pulled into an academic error after a climate study was withdrawn
[LONDON] An influential global coalition of central banks and financial supervisors plans to publish a new set of climate scenarios next year, as it works to move past a controversy over a key input in an earlier model.
French Central Bank governor Francois Villeroy de Galhau said on Tuesday (Dec 16) in a speech that the Network for Greening the Financial System (NGFS) will publish updated long-term climate scenarios next November.
An NGFS spokesperson said the so-called damage function, which provides an estimate of the economic impacts, won’t rely on an academic paper that was used in the current edition and has since been retracted.
The central bankers’ group, which has about 150 members, including the People’s Bank of China and the European Central Bank, has been pulled into an academic error after a widely cited study projecting severe economic fallout from climate change was withdrawn following peer criticism.
Before it was amended and ultimately retracted, the paper, produced by scientists at the Potsdam Institute for Climate Impact Research, estimated that unchecked climate change could slash global output by roughly 62 per cent this century.
Villeroy did not address the paper directly. But he said the NGFS scenarios “are a key resource to inform decision-makers and anchor the debate in science-based evidence rather than political feelings.”
The models are “developed jointly with the scientific community,” he said, and “quantify both transition risk and physical risk and assess their macroeconomic and financial implications.”
He added that the NGFS is “continuously improving” its modeling.
The NGFS is assessing how to reflect the changes to the retracted Potsdam paper and reviewing its methodology as it prepares to launch the sixth version of its long-term climate macro-financial scenarios, the spokesperson said.
SEE ALSO
The controversial damage function proposed by the Potsdam scientists was used in the fifth and current vintage of its long-term scenarios. BLOOMBERG
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
