## 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

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### 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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_Source: https://www.imf.org/en/publications/wp/issues/2025/11/06/the-env-fiba-model-for-climate-risk-analysis-framework-model-details-and-guide-571481_