Cambridge Econometrics’ E3ME model referenced in updated NGFS guidance on climate scenario analysis
Cambridge Econometrics is delighted to announce that macroeconomic model E3ME has been recognised as one of the innovative modelling tools available to the finance sector in the latest version of the NGFS guidance on climate scenario analysis.
The second edition of the NGFS ‘Guide to climate scenario analysis for central banks and supervisors’ reflects the rapid progress in climate scenario analysis that has been made in the last five years, including innovative modelling approaches that capture non-linear and compounding climate impacts.
As an econometrically calibrated Integrated Assessment Model (IAM) E3ME’s climate scenarios enable stakeholders in the finance sector to assess climate related risk at a high level of granularity, representing a wide range of economic sectors, countries, technologies, policy interventions and direct regulations.
As a peer-reviewed macroeconomic model developed in-house by our experts over 25 years, we celebrate E3ME’s recognition by the NGFS as a decision useful tool for central banks and financial institutions worldwide.
We are also encouraged by the inclusion of capturing non-linear and compounding climate impacts for quantifying climate induced financial risk in the latest NGFS guide. In particular, the acknowledgement of the impacts that climate tipping points when reached will have on the financial system. This is already becoming an increasingly pertinent area for the finance sector as investors navigate their risk exposure.
CEO