Descripción del proyecto
CLASSIC (CLimAte riSk implicationS for fInance and the real eConomy) intends to contribute to understanding how physical and transition climate risk impact the financial system and the real economy by quantifying the linkages and feedback between the two.
There is consolidated evidence on the significant impacts of climate change on the real side of the economic systems. However, a much narrower, even though expanding, research has been done on the financial implications of climate risk. Identifying the source, transmission channels, direction and magnitude of these impacts is of primary importance to policymakers, the business and finance community for a decision-making robust to climate risk effects on the global capital markets.
CLASSIC contributes to understanding how physical and transition climate risks impact the financial system and the real economy by quantifying the linkages and feedback between the two. The project investigates the economic and financial impacts of physical climate risk and of transition risk posed by climate change mitigation policies in the context of the EU Green Deal and the EU fit for 55 policies. Methodologically, an integrated modeling framework is built by coupling the macroeconomic representation of the real side of the economy with the financial side. The multi-sector multi-country Computable General Equilibrium model ICES (Intertemporal Computable Equilibrium System) model describes the former, while a climate financial risk module represents the latter.
The applicant works with highly skilled, leading partners who join forces to achieve the strategic objectives of CLASSIC. The partners’ scientific excellence with their long teaming traditions provides a first-class environment for training and research. The ambitious plan for generation of impact and dissemination of outcomes paves the way to creating policies for effective targeting of climate risk and enables the creation of a new service for climate risk hedging.