Economic models used by governments, central banks and investors are increasingly understating physical climate risk because they rely on assumptions that break down as the world moves toward higher levels of warming, according to a new report from University of Exeter and Carbon Tracker. The report Recalibrating Climate Risk—drawing on expert judgment from more than 60 climate scientists—finds that many economic models are failing to capture the extreme events, compounding shocks and rising uncertainty likely to dominate impacts in a hotter world.
