Research library

INVESTIGATION 12 / STRESS & CLIMATE

A longer risk horizon

How do transition assumptions reshape portfolio losses?

Climate scenariosTransition riskLong horizons

01 / THE PRACTICAL QUESTION

A decision, before a model.

Two transition pathways can lead to very different timing of carbon costs and repricing for the same exposures.

The analyst’s decision

Compare conditional exposure sensitivity across pathways without treating scenarios as forecasts.

02 / DATA & COMPARISON

The idea in plain language.

Constructed carbon-price and physical-risk paths feed explicit loss sensitivities. They expose the assumptions connecting a scenario to a portfolio outcome.

Transition risk
Potential losses associated with policy, technology, and economic changes during decarbonization.

Data. Constructed climate factors; NGFS publications provide external context.

Baseline. Static exposures with transparent shock coefficients.

03 / THE EXPERIMENT

What the saved experiment shows.

The saved demonstration contains six constructed pathways with 16 annual points each. Its delayed-transition carbon price reaches about 399 in 2050, compared with about 248 for net zero. These are generated scenario values, not official NGFS observations.

Inspect the supporting result

Evidence record: research-validation.json#numerical_checks/12

Explore the related lab

04 / RESULTS & LIMITATIONS

Evidence with its boundaries attached.

The related lab is a cross-project demonstration. Read this investigation’s evidence and limits before transferring its conclusions.

Inspect numerical checks and validation records

Loading validation evidence…

Interpretation limit

Illustrative sensitivities are not an integrated assessment model or a validated climate forecast.

05 / REPRODUCE

Reproduce and challenge the result.

Code, configuration, and reproduction

The project contains its implementation, configuration, tests, and walkthrough. Download the lab configuration to record the exact parameters used in an interactive run.

Project code and walkthrough