{"id":78,"date":"2021-04-12T01:28:24","date_gmt":"2021-04-12T05:28:24","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/financialimpactclimatechange\/?post_type=part&p=78"},"modified":"2021-07-05T00:39:41","modified_gmt":"2021-07-05T04:39:41","slug":"module-3-systemic-risks","status":"publish","type":"part","link":"https:\/\/pressbooks.bccampus.ca\/financialimpactclimatechange\/part\/module-3-systemic-risks\/","title":{"raw":"Module 3: Systemic Risks","rendered":"Module 3: Systemic Risks"},"content":{"raw":"

Module Overview<\/h3>\r\nModule 3 explores systemic risks\u2014risks that impact entire economies. Besides the scope of the potential impacts, one of the characteristics of systemic risk is that it is difficult\u2014if not impossible\u2014to diversify against the risk. So, even organizations that otherwise have relatively low exposure to physical and transition climate risks are likely to be impacted, should the systemic risks materialize.\r\n\r\nIn this module, we\u2019ll examine three inter-related systemic risks: financial stability; macro-economic stability (e.g., GDP, price levels, unemployment, interest rates); and, public budgetary failure. We\u2019ll explore how these three system-level risks interact with each other, and with the physical and transition risks identified in Modules 1 \u2013 2.\r\n
\r\n

Module Objectives<\/p>\r\n\r\n<\/header>\r\n

\r\n\r\nBy the end of this module, you will:\r\n
    \r\n \t
  1. Understand the systemic economic risks posed by climate change to fiscal sustainability (public budgets), GDP, and financial system stability;<\/li>\r\n \t
  2. Consider the importance of collective action in light of non-diversifiable risks<\/li>\r\n \t
  3. Identify the influence exerted by socio-political responses to climate change on the magnitude and timing of systemic impacts;<\/li>\r\n \t
  4. Use Shared Socioeconomic Pathways (SSPs) and Representative Concentration Pathways (RCPs) to develop scenarios with which to assess exposures to systemic risks over time.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n \r\n
    \r\n

    Readings & Resources<\/p>\r\n\r\n<\/header>\r\n

    \r\n\r\nKompas, T., Pham, V.H., Che, T.N. (2018).\u00a0The effects of climate change on GDP by country and the global economic gains from complying with the Paris Climate Accord<\/a>.\u00a0Earth\u2019s Future, 6<\/i>(8).\r\n\r\nPrudential Regulation Authority. (2015).\u00a0The impact of climate change on the UK insurance sector<\/a>.\u00a0<\/i>Bank of England. [Excerpts only]<\/span>\r\n

    Prudential Regulation Authority. (2018).\u00a0Transition in thinking: The impact of climate change on the UK banking sector.<\/a>\u00a0<\/i>Bank of England. [Excerpts only]<\/span><\/p>\r\nSchuler, P., Oliveira, L.E., Mele, G., & Antonio, M. (2019).\u00a0Managing the fiscal risk associated with natural disasters.<\/a>\u00a0In Pigato, M.A., (Ed).\u00a0Fiscal Policies for Development and Climate Action<\/a><\/i>. World Bank Institute.\u00a0[Excerpts only].<\/span>\r\n\r\nData sources<\/i><\/b>\r\n\r\nInternational Institute for Applied Systems Analysis. (2018).\u00a0SSP Public Database (v. 2.0) <\/i>[Database].\u00a0https:\/\/tntcat.iiasa.ac.at\/SspDb\/dsd?Action=htmlpage&page=30<\/a>\r\n\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n ","rendered":"

    Module Overview<\/h3>\n

    Module 3 explores systemic risks\u2014risks that impact entire economies. Besides the scope of the potential impacts, one of the characteristics of systemic risk is that it is difficult\u2014if not impossible\u2014to diversify against the risk. So, even organizations that otherwise have relatively low exposure to physical and transition climate risks are likely to be impacted, should the systemic risks materialize.<\/p>\n

    In this module, we\u2019ll examine three inter-related systemic risks: financial stability; macro-economic stability (e.g., GDP, price levels, unemployment, interest rates); and, public budgetary failure. We\u2019ll explore how these three system-level risks interact with each other, and with the physical and transition risks identified in Modules 1 \u2013 2.<\/p>\n

    \n
    \n

    Module Objectives<\/p>\n<\/header>\n

    \n

    By the end of this module, you will:<\/p>\n

      \n
    1. Understand the systemic economic risks posed by climate change to fiscal sustainability (public budgets), GDP, and financial system stability;<\/li>\n
    2. Consider the importance of collective action in light of non-diversifiable risks<\/li>\n
    3. Identify the influence exerted by socio-political responses to climate change on the magnitude and timing of systemic impacts;<\/li>\n
    4. Use Shared Socioeconomic Pathways (SSPs) and Representative Concentration Pathways (RCPs) to develop scenarios with which to assess exposures to systemic risks over time.<\/li>\n<\/ol>\n<\/div>\n<\/div>\n

       <\/p>\n

      \n
      \n

      Readings & Resources<\/p>\n<\/header>\n

      \n

      Kompas, T., Pham, V.H., Che, T.N. (2018).\u00a0The effects of climate change on GDP by country and the global economic gains from complying with the Paris Climate Accord<\/a>.\u00a0Earth\u2019s Future, 6<\/i>(8).<\/p>\n

      Prudential Regulation Authority. (2015).\u00a0The impact of climate change on the UK insurance sector<\/a>.\u00a0<\/i>Bank of England. [Excerpts only]<\/span><\/p>\n

      Prudential Regulation Authority. (2018).\u00a0Transition in thinking: The impact of climate change on the UK banking sector.<\/a>\u00a0<\/i>Bank of England. [Excerpts only]<\/span><\/p>\n

      Schuler, P., Oliveira, L.E., Mele, G., & Antonio, M. (2019).\u00a0Managing the fiscal risk associated with natural disasters.<\/a>\u00a0In Pigato, M.A., (Ed).\u00a0Fiscal Policies for Development and Climate Action<\/a><\/i>. World Bank Institute.\u00a0[Excerpts only].<\/span><\/p>\n

      Data sources<\/i><\/b><\/p>\n

      International Institute for Applied Systems Analysis. (2018).\u00a0SSP Public Database (v. 2.0) <\/i>[Database].\u00a0https:\/\/tntcat.iiasa.ac.at\/SspDb\/dsd?Action=htmlpage&page=30<\/a><\/p>\n<\/div>\n<\/div>\n

       <\/p>\n

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