Climate & Nature

Downscaling of Physical Risks for Climate Scenario Design (White Paper)

Published on April 1, 2022

Authored by Enrico Biffis, Shuai Wang

This paper discusses how global climate model outputs can be downscaled to spatial resolutions of interest to market participants and asset owners in Asia. Examples are provided for the evolution of temperature, rainfall, wind speed and coastal surge along an adverse climate scenario for Indonesia, Malaysia, Thailand and the Philippines. The downscaling technology allows market participants to differentiate between climate-induced shifts in the average vs. tail distribution of target variables.