On the Nature of Things: Designing Macroeconomic Scenarios of Nature-related risks for France

Lauriane Benoist, Stéphane Dees, Elise Kremer, Clément Payerols and Oriane Wegner

Working papers from Banque de France

Abstract: This paper explores the macroeconomic implications of nature-related risks for France through a forward-looking scenario analysis. We first identify and prioritize key nature-related shocks with potential macroeconomic relevance. Using a multi-country semi-structural model, we then design two illustrative scenarios: one focused on water-related shocks - combining chronic scarcity, declining quality, and acute disruptions - and another on agricultural shocks, including domestic yield losses and a multiple breadbasket failure. The simulations suggest that both scenarios generate material impacts on economic activity and inflation in France. Water-related shocks lead to a stagflationary episode marked by a sharp and persistent decline in output and rising prices, while agricultural shocks result in deeper output losses due to global spillovers and food price surges. These findings highlight the macro-economic relevance of nature-related risks and call for further work on their implications for financial stability.

Keywords: Nature-related risks; Ecosystem services; Macro-economic modeling; Scenario analysis (search for similar items in EconPapers)
JEL-codes: C68 E32 Q54 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:1046

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