Advances in Climate Scenarios and Stress Testing

Riccardo Rebonato, Scientific Director, EDHEC-Risk Climate Impact Institute, and Professor of Finance, EDHEC Business School, delivered a presentation titled “Advances in Climate Scenario Analysis & Stress Testing: Moving Beyond the SSP/RCP Framework” at the ADIA LAB Symposium, which took place on November 7 and 8 at the Abu Dhabi Global Market, a few weeks before the Cop28 summit began in the UAE. This inaugural conference, organised by Adia Lab (the research institute launched by sovereign wealth fund Abu Dhabi Investment Authority), addressed “two of the world’s most pressing issues of today: climate change and health sciences".

During his presentation, Riccardo Rebonato discussed the following topics:

• Features, strengths and weaknesses of the SSP/RCP framework
• Why climate scenarios need a probabilistic description
• SSP/RCP-consistent probabilistic scenarios
• SSP/RCP-independent probabilistic scenarios
• Three “universal relationships” to assign (conditional and unconditional) probabilities to climate scenarios
• A Bayesian-Net perspective for the modelling of the ‘residuals’