Scenario Design and Analysis

Overview

Since 2019, the NGFS has developed an analytical framework to assess how climate change will impact the macroeconomy and the financial system, based on scenario analysis.  This forward-looking tool includes looking at the different possible outcomes for climate change and the policies to mitigate it, assessing the financial impact and determining the timeframes during which risks could materialise.

The Workstream Scenario Design and Analysis was created to help NGFS members undertake climate scenario analysis and promote its use across the financial system. The forward-looking nature of climate change-related risks and the inherent uncertainty about future events make it difficult to assess them using standard risk modelling methodologies. Climate scenario analysis offers a flexible ‘what-if’ methodological framework better suited to exploring such risks, through the exploration of plausible futures. The NGFS makes all these data on short-term and long-term scenarios publicly and freely available on a dedicated portal.

For the coming years, the Workstream will seek to improve the modelling framework of the long-term scenarios, while providing additional guidance to help users conduct climate scenario analysis. For the first time in 2025, we also aim to publish additional short-term adverse scenarios for stress testing purposes and monetary policy considerations. 

Chairs’ institutions

The workstream is chaired by Mr Livio Stracca (European Central Bank).

Recent publications