Workshop on Transition Risks and Climate Challenges

Abstract

Climate change can directly affect the stability of financial and economic systems through more frequent and severe disasters affecting the economy, while the uncertainty related to the conversion process towards a low-carbon economy and its timing and speed have the potential to produce negative indirect consequences especially in carbon-intensive sectors. Despite the growing attention of scholars and policy makers to the risks of climate change for the economy, the debate on how to correctly measure externalities and design adequate policies is still heated. Many economic activities are, in fact, not immune from direct and indirect exposures to climate change and economic transition, particularly through disruptions in global supply chains that amplify both physical and transition risks. The transmission mechanisms of risks from environmental threats and climate change to economic systems and individual institutions are still largely unknown and their study envisions an interdisciplinary research agenda, where innovative quantitative approaches can play a central role in supporting risk assessment and decision-making. The Workshop aims to explore and discuss various perspectives on transition risk affecting firms and financial systems. The event will also feature contributions developed as part of the PRIN 2022 PNRR project “Measuring, managing and hedging indirect climate-transition risk”.