merton.scenarios.predefined.ngfs¶
NGFS Phase V (2024) climate scenarios.
The Network for Greening the Financial System publishes Phase V of its reference scenarios in 2024. The four “headline” scenarios shipped here are the ones most banks and insurers map their portfolios to for supervisory stress testing.
Headline scenarios:
Net Zero 2050 — orderly transition, immediate global policy action, carbon price ramps from ~$50/tCO₂e today to ~$300/tCO₂e by 2035 and $700/tCO₂e by 2050 in advanced economies.
Delayed Transition — policy action delayed until ~2030, then abrupt: carbon price spikes from ~$30 to ~$400/tCO₂e between 2030 and 2040.
Current Policies — only currently legislated policies; carbon price stays low (~$30–$60/tCO₂e), but chronic physical risk dominates.
Fragmented World — regional fragmentation, mixed action; carbon price low globally but high in coalitions of the willing.
The carbon-price paths and PD-multiplier defaults are aligned with publicly available NGFS Phase V documentation and IIGCC/MSCI Climate Lab Insights commentary; numbers are intended as practitioner defaults, not as official supervisory parameters.
References
NGFS (2024). NGFS Phase V Climate Scenarios for Central Banks and Supervisors. November 2024. https://www.ngfs.net/ngfs-scenarios-portal/
Attributes¶
Functions¶
|
NGFS Phase V — Net Zero 2050 (orderly transition). |
|
NGFS Phase V — Delayed Transition (disorderly). |
|
NGFS Phase V — Current Policies (hot-house world). |
|
NGFS Phase V — Fragmented World. |
Module Contents¶
- merton.scenarios.predefined.ngfs.net_zero_2050() merton.scenarios.climate.ClimateScenario[source]¶
NGFS Phase V — Net Zero 2050 (orderly transition).
Carbon price ramps smoothly to limit warming to 1.5 °C; transition risk dominates in the early years, physical risk stays subdued.
- merton.scenarios.predefined.ngfs.delayed_transition() merton.scenarios.climate.ClimateScenario[source]¶
NGFS Phase V — Delayed Transition (disorderly).
Climate policy is postponed until ~2030, then enacted abruptly. The abrupt repricing of carbon-intensive sectors creates a large transition shock, and physical risk has also grown by the time policy bites.
- merton.scenarios.predefined.ngfs.current_policies() merton.scenarios.climate.ClimateScenario[source]¶
NGFS Phase V — Current Policies (hot-house world).
Only currently legislated policies are enforced. Carbon price stays low, but chronic physical risk (acute and chronic) grows materially: coastal real estate, agriculture, and weather-exposed industries are structurally weaker.
- merton.scenarios.predefined.ngfs.fragmented_world() merton.scenarios.climate.ClimateScenario[source]¶
NGFS Phase V — Fragmented World.
Regional coalitions adopt strong policies while others lag, leading to carbon leakage, mixed transition incentives, and significant residual physical risk. Transition is partial and uneven.