## Feeling the Heat: Climate Shocks and Credit Ratings

_IMF Working Papers, December 18, 2020_

## Source details

**Canonical URL:** [Feeling the Heat: Climate Shocks and Credit Ratings](https://www.imf.org/en/publications/wp/issues/2020/12/18/feeling-the-heat-climate-shocks-and-credit-ratings-49945)

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## Bibliographic details
- Authors: Serhan Cevik, João Tovar Jalles
- Published: December 18, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513564548.001

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### Authors and publication
- By Serhan Cevik, João Tovar Jalles
- December 18, 2020
- IMF Working Papers, Working Paper No. 2020/286
- Issue: 286; Volume: 2020; Pages: 23
- DOI: https://doi.org/10.5089/9781513564548.001
- ISBN: 9781513564548
- ISSN: 1018-5941
- Stock No: WPIEA2020286

### Research question and methodology
- Research objective:
  - Empirically investigate how climate change may affect sovereign credit ratings.
- Method:
  - Analysis conducted by means of binary-choice models.
  - Models control for conventional macroeconomic determinants of credit worthiness.

### Key findings
- Climate change vulnerability:
  - Climate change vulnerability has adverse effects on sovereign credit ratings.
- Climate change resilience:
  - Countries with greater climate change resilience benefit from higher (better) credit ratings.
- Distributional effect:
  - The impact of climate change is disproportionately greater in developing countries due largely to weaker capacity to adapt to and mitigate the consequences of climate change.
- Robustness:
  - Findings are robust to a battery of sensitivity checks.

### Subject areas and keywords
- Subject: Climate change, Credit, Credit ratings, Emerging and frontier financial markets, International reserves
- Keywords: climate change pay, climate change resilience, climate change variable, climate change vulnerability, credit ratings, resilience, sovereign credit ratings, vulnerability, WP

*Source: IMF Working Paper "Feeling the Heat: Climate Shocks and Credit Ratings" by Serhan Cevik and João Tovar Jalles (December 18, 2020), Working Paper No. 2020/286, DOI: https://doi.org/10.5089/9781513564548.001*

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2020/12/18/feeling-the-heat-climate-shocks-and-credit-ratings-49945_