The financial and macro-economic repercussions of environmental challenges and mitigation strategies are key for designing a sustainable transition.

Our work

We use numerical models to quantify the impacts of climate change on the real economy and its interdependence with the financial sector. We develop both macroeconomic general equilibrium and agent-based models to assess the direct and higher-order costs of climate change. Particular emphasis is given to the representation of autonomous market-driven adaptation mechanisms, i.e. those systemic interactions across markets and agents able to propagating, amplifying or smoothing initial impacts. We examine the physical and transition risks for the financial sector and evaluate macro-prudential policies to alleviate them.