A Stochastic Climate Model -- An approach to calibrate the Climate‑Extended Risk Model (CERM)
"These parameters can be calibrated using public data. This new approach means not only to evaluate climate risks without picking any specific scenario but also allows to fill the gap between current one year approach of regulatory and economic capital models and the necessarily long‑term view of climate risks by designing a framework to evaluate the resulting credit loss on each step (typically yearly) of the transition path. This new approach could prove instrumental in the 2022 context of central banks weighing the pros and cons of a climate capital charge."