Integration of NiGEM into Phase II of the NGFS scenarios

Summary & aims

Forming part of the NGFS Climate Scenarios Phase II, under sub-group 1, this project covers the expansion of the number of reported macro-economic variables (macro output from scenarios) on the IIASA database through an extension of current modelling framework by the inclusion of NiGEM withing the modelling framework.

This work was made possible by grants from Bloomberg Philanthropies and ClimateWorks Foundation and the results of this work can be found by accessing the IIASA portal

 

Methodology

To produce an enriched set of scenarios, publicly available in a user-friendly manner, in a similar format as the first NGFS scenario release. The scenarios will rely on a transparent set of assumptions and modelling choices, will ensure cross-jurisdictional consistencies and will provide a sufficient level of granularity to allow their usage for stress-testing and scenario analysis purposes.

 The following key macro variables were identified by the NGFS for inclusion in the output

 General economic outputs

                     Gross domestic product (GDP)

                     Consumption, investment, government expenditure

                     Labour productivity – this is an instrument in NiGEM

                     Technological innovation and capital productivity

                     Unemployment rate

                     Corporate profits, household income

                     Government expenditure – this is normally used as an instrument, but is linked endogenously to capacity

                     International trade flows

Specific economic outputs in the context of financial risk analysis

                     Consumer price inflation

                     Energy and commodity prices / quantities

                     Interest rates

                     Government bond yields

                     Exchange rates between countries

                     Equity market indices

                     Real estate prices (residential and/ or commercial)

Findings and Recommendations

The project was finalised in June 2021

Co-Investigator

Ian Hurst
Associate Research Director for Model Development
Iana Liadze
Principal Economist
Dawn Holland
Fellow
Patricia Sánchez Juanino
Database Manager