Global | NGFS Phase V: less orderly transitions and greater chronic physical climate risks

Summary

The new release includes significant updates mainly focused on the chronic physical risk assessment, driven by a new damage function aligned with the latest research, resulting in greater projected output losses.

Key points

• Key points:
• The fifth phase of NGFS introduces a new damage function for physical risk assessment, which now considers daily temperature variability, precipitation patterns, and extreme weather events. This results in a more granular analysis of chronic physical risks, leading to higher projected economic damages from these risks.
• The scenarios incorporate the latest climate and economic projections, such as the IPCC's updated Shared Socioeconomic Pathways (SSPs), recent policy commitments, and enhanced sub-national climate data. This improves alignment across climate models and provides more precise population and GDP growth estimates​.
• The revised damage function reveals that physical risks are now projected to have a substantially higher economic impact than transition risks. For instance, by 2050, GDP losses under the "Current Policies" scenario could reach up to 15%, triple previous estimates.
• Delays in climate action have led to increased emissions and higher peak temperatures. The "Net Zero 2050" scenario now anticipates a peak of 1.7°C, necessitating stricter carbon pricing and highlighting the need for immediate, ambitious climate policies to avoid severe economic disruptions​.

Geographies

Topics

Tags