Anticipating climate change risks on sovereign bonds

The deep economic changes necessary to achieve the Paris Agreement objectives require a consistent reallocation of resources. This gives the financial sector a key role in tackling climate change. Risk analysis is important in that perspective.
This paper is the first of a two-part study whose objective is to explore how sovereign bonds could be affected by climate change risks—it focuses on assessing the macroeconomic impacts related to climate change. Two “worst case” scenarios (similar to current trends, though) are explored.