Rising temperatures, falling ratings: the effect of climate change on sovereign creditworthiness
- How will a changing climate impact the creditworthiness of governments over the very long term? Financial markets need credible, digestible information on how climate change translates into material risks. To bridge the gap between climate science and real-world financial indicators, the authors simulate the effect of climate change on sovereign credit ratings for 108 countries, creating the world’s first climate-adjusted sovereign credit rating. The study offers a first methodological approach to extend the long-term rating to an ultra-long-term reality, aiming at long-term investors, but also regulators and rating agencies.
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| Author: | Patrycja Klusak, Matthew Agarwala, Matt Burke, Moritz Kraemer, Kamiar Mohaddes |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-564554 |
| URL: | https://www.imfs-frankfurt.de/forschung/imfs-working-papers/details/publication/rising-temperatures-falling-ratings-the-effect-of-climate-change-on-sovereign-creditworthiness.html |
| Parent Title (English): | Working paper series / Institute for Monetary and Financial Stability ; 158 |
| Series (Serial Number): | Working paper series / Institute for Monetary and Financial Stability (158) |
| Publisher: | Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability |
| Place of publication: | Frankfurt am Main |
| Document Type: | Working Paper |
| Language: | English |
| Year of Completion: | 2021 |
| Year of first Publication: | 2021 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2021/07/30 |
| Tag: | climate change; climate-economy models; corporate debt; counterfactual analysis; sovereign credit rating; sovereign debt |
| Issue: | March 14th, 2021 |
| Page Number: | 54 |
| HeBIS-PPN: | 485410982 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Wissenschaftliche Zentren und koordinierte Programme / Institute for Monetary and Financial Stability (IMFS) | |
| Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
