Workshop on risk analysis from climate change and nature loss

The workshop discussed fundamental concepts of climate change and its environmental, economic and social impacts, with emphasis on the impacts faced by Central Banks in the region. Climate models such as GCAM, ClimRisk and GEMMES were presented and analyzed, highlighting their application in scenario projection and macroeconomic policy formulation. Participants explored international experience in integrating climate analysis into economic planning and the development of such models in countries that are at the forefront of knowledge on the subject, such as the Bank of Mexico.

In addition, the importance of having strong governance and regional coordination to face climate challenges was emphasized, as well as the essential establishment of agendas, both common and specific to each Central Bank, for the development of climate scenarios and models capable of providing relevant indicators and metrics for Central Banks.

Commitments

a. Establishment of the “Technical Roundtable on Climate Risk Analysis”. Appointment of internal staff at the Central Banks who will form the working group specific to the topic. Appointment of a focal point and project coordinator.

• Creation of a joint agenda for the technical group as well as specific agendas with each country group.

• Continue with technical assistance and workshops and knowledge exchange on climate risk assessment, scenarios, modelling and their implications for financial and macroeconomic stability, for staff designated in point a.

• Working group meetings that serve as a space for exchanging experiences on the progress that will be made (every six months or annually).

b. Development of a document on regional governance aimed at Central Bank Directors.

c. First estimate of the economic impact of climate change for each country and preparation of a report with the results.

• Definition and development of specific impact function according to needs and specifications at country level.

• Working together with experts from each central bank.

• Training and webinars for experts from each central bank.

• Development of a working paper presenting country-level estimates.

d. Development of “Climrisk” climate modelling in the region that can subsequently be coupled with both internal and external macroeconomic models of the Central Banks.

First stage:

• UNAM: Definition and development of key climate indicators and metrics for central banks in the region.

• Use of scenarios common to all countries to facilitate comparability between them (e.g. NGFS scenarios).

Second stage:

• Working together with Central Banks on the specific determination of assumptions, scenarios and variables relevant to each country.

• Using specific scenarios relevant to each country.

• Inclusion of additional relevant climate indicators and metrics at country level.

• Development of coupling mechanisms with macroeconomic models, whether those internal to the Central Banks of the region (if possible) or other models (e.g. GEMMES).

e. Development of data repository/portal to facilitate accessibility and transparency of information.

f. Final summary of the work plan carried out, describing the experiences at the country level.