Climate impact assessment for the Central Bank of Hungary
This study commissioned by the Central Bank of Hungary calculated the impacts of climate-related scenarios with varying levels of global climate action for the Hungarian economy.
The research is unique in that in tackles a small country in Central Europe, which is usually not in the focus of global analysis. An open economy with strong trade links to the EU with low-hanging fruits in decarbonisation. These features create a strong need for climate-risk impact analysis tailored to the Hungarian economy, to provide a foundation for climate-risk stress-testing in the financial sector.
The scenarios included two different global warming pathways: a ‘Paris Transition Pathway’ and a ‘Failed Transition Pathway’ with substantially different risk levels associated with them: transition risks and physical risk impacts.
Our scenario set is based on the extension to existing energy and environmental policies and represents only one of many possible pathways to different futures. For this project, we have customised our assumptions such that the power sector developments are broadly in line with the targets of the latest Hungarian National Energy and Climate Plan (NEKT 2020).
Click here for our one-pager on our climate scenario analysis service for central banks.