Transition spillover risk means decarbonization in trade partners can negatively shock fiscal and financial stability. When it compounds with physical risk, shocks amplify. We present today results for #Barbados at @AFD_en Strong Sustainability conference bit.ly/3P9xCto
We design and assess scenarios that combine acute and chronic physical risks, building on CLIMADA and NGFS scenarios downscaled to Barbados
we then extend the concept of #transition #spillover #risk as shock from carbon price on international flights and IEA Net Zero scenarios for aviation and we assess transmission channels to econ and finance agents, fiscal and sovereign financial stability, using EIRIN
we find that spillover transition risk and domestic transition policies lead to large decrease in GHG emissions in Barbados. However, while domestic transition policies (carbon tax + subsidies) bring economic co-benefits, transition spillovers can reverse them
with negative implications on BoP and debt/GDP in Barbados
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