Risk analysis from climate change and nature loss
Date: June 19-21, 2024
Location: Mexico City
Assistants
• Representatives of the Central American Monetary Council
• Representatives of Central Banks of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Dominican Republic
• Representative of the Superintendency of Banks of Panama
• Representatives of ECLAC
• UNAM Climrisk model experts
• Banxico experts and GCAM model
• AFD GEMMES model experts
Topics covered
The workshop on risk analysis from climate change and nature loss, held from June 19 to 21, 2024 in Mexico City, addressed crucial issues for understanding and managing climate risks in the Central American region. Fundamental concepts of climate change and its environmental, economic, and social impacts were discussed, with an emphasis on the impacts faced by the region’s Central Banks. 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.
Action plan
• Formalization of the “Technical Roundtable on Climate Risk Analysis” made up of officials with research profiles from the Central Banks of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.
• Development of national models for each country with the aim of quantifying the economic impact of climate change for each country, which are subsequently adapted to macroeconomic models.
• Training for central bank officials, in order to expand the range of available analytical tools and modelling methods to be used to analyse the economic impact of climate change in the region.
• This process will be carried out, in a first stage of six months, during the second half of 2024, yielding preliminary results and in a second stage of climate-macroeconomic modeling specific to each country during 2025.
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