The ENV-FIBA Model for Climate Risk Analysis: Framework, Model Details and Guide
IMF Working Papers, November 7, 2025
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Bibliographic details
- Authors: Marco Gross, Jinhyuk Yoo, Hugo Rojas-Romagosa, Salim Dehmej, Zulma Barrail, Hannah Sheldon
- Published: November 7, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229028844.001
Overview and purpose
- Presents the ENV-FIBA macro-micro model framework to analyze the climate-macro-financial consequences of climate scenarios and related policy counterfactuals.
- Model structure:
- Multi-country Computable General Equilibrium (CGE) core.
- Connected micro simulation module for an economy’s individual nonfinancial firms and banks.
- Illustration: model application for Japan.
Scenario anchoring and policy levers
- Climate-macro-financial scenario simulations are anchored in:
- Future temperature pathways.
- Emission pathways.
- Policy assumptions included in simulations:
- Carbon taxation.
- Fiscal revenue recycling and reinvestment.
- Optional carbon border adjustment mechanisms.
- Other policy counterfactuals as specified in scenario design.
Key findings and emphasized modeling principles
- Joint modeling:
- Physical and transition risk effects should be modeled jointly to a maximal extent, given their intertwined nature.
- Dynamic bank balance sheets:
- It is important to consider bank balance sheets that are dynamic (not static) to capture differential growth of emission-intensive industries that may shrink versus industries that may flourish.
- Primary impacts on bank solvency:
- Dynamically evolving lending has primary impacts on bank solvency via interest income.
- Quantitatively often smaller impacts occur through loan losses from borrower defaults.
Publication and metadata
- Title: The ENV-FIBA Model for Climate Risk Analysis: Framework, Model Details and Guide
- Authors: Marco Gross, Jinhyuk Yoo, Hugo Rojas-Romagosa, Salim Dehmej, Zulma Barrail, Hannah Sheldon
- Publication date: November 7, 2025
- Series: Working Paper No. 2025/230
- Volume: 2025
- Issue: 230
- Pages: 42
- DOI: https://doi.org/10.5089/9798229028844.001
- ISBN: 9798229028844
- ISSN: 1018-5941
- Subject: Climate change; Environment; Financial statements; Greenhouse gas emissions; Public financial management (PFM)
- Keywords: Caribbean; Central America; CGE modeling; Climate change; Climate risk analysis; climate scenario; ENV-FIBA model; Financial statements; Global; Greenhouse gas emissions; IMF working papers; micro-macro simulations; model framework; South America
IMF Working Paper No. 2025/230
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