The growing threats of extreme weather and climate tipping points create risks to financial markets in the next five to ten years that current climate scenarios do not capture.
We introduce a class of stochastic sector-specific damage functions to capture the probabilities of significant events, notably extreme weather and climate tipping points. Using these models will show material climate-related risks for insurance and pension fund asset allocations in the next five to ten years.
The stochastic character of the damage functions enables the calculations of climate stresses at various percentile levels rather than just a single deterministic path as is currently the case in most regulatory stress tests.
Panelists:
- Bob Brammer, President and CEO, Brammer Technology, Adjunct Professor in the Department of Atmospheric and Oceanic Science
- Matthew Lightwood, Director, Risk Solutions, Conning
- Cliff Rossi, Professor of the Practice, Robert H. Smith School of Business
Moderated by Russ Wermers, Director Center for Financial Policy, Paul J. Cinquegrana ’63 Endowed Chair in Finance
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Virtual (Zoom)
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