The Network of Central Banks and Supervisors for Greening Financial System (NGFS) has published new scenarios for climate risk assessments serving a primary tool for central banks, supervisors and private sectors to assess risks posed by climate change and explore opportunities of mitigation.
Two new scenarios were added to the updated document. These pertain to “exploring the consequences of delayed, divergent, and thus overall ineffective climate action” and a “Paris-aligned scenario reflecting the need for substantial behavioural changes” to evade physical-risk impacts.
The scenarios were also updated with the latest GDP, population and climate commitments as of March 2023. However, there was a limitation of the Carbon Dioxide Removal (CDR) technologies for its scarcity in the sector. Given the delayed implementation of climate policies, high emissions and the energy crisis following the war in Ukraine, the scenarios portray a “disorderly future”.
The results of the NGFS scenarios indicate that achieving net-zero of CO2 emissions by 2050 will require “ambitious efforts” from all sectors. Furthermore, it demonstrates that limiting the temperature increase to 1.5 °C above pre-industrial levels is possible, but will necessitate substantial reductions in energy consumption and more intensive efforts than previously stated in older scenarios.