 Climate tail risks. Chapter 5 in (Mis)managing Macroprudential Expectations, 2023, pp 89-112 from Edward Elgar Publishing Abstract: This chapter provides an analysis of the Bank of England’s 2021 Climate Biennial Exploratory Scenario (CBES) stress test. It argues that the CBES was an attempt to both identify systemic vulnerabilities relating to climate change and manage the expectations of participating institutions around different future pathways relating to transitions away from carbon intensive economic activities. It provides a critical analysis of the capacity for the stress test to coordinate expectations around carbon futures. This chapter demonstrates that the CBES saw participating institutions purchase modelling expertise from risk analytics firms and credit rating agencies. Not only did this help to legitimise the catastrophe and climate risk models developed in the private sector, but it is forging intra-actions of catastrophe models, credit ratings methodologies, and the ratings decisions that influence global credit flows. This chapter contends that this raises questions about who bears liability for future losses relating to climate change. Keywords: Economics and Finance; Environment; Geography; Politics and Public Policy Sociology and Social Policy; Sustainable Development Goals (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:20770_5 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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