WP3: Geopolitical Risks of Transitions and Climate Damage

This work package aims to integrate advancements from WP1 (geopolitically relevant transitions) and WP2 (physical climate risks) for a comprehensive joint assessment. Leveraging the REMIND-MAgPIE integrated assessment model, we will place national-level results, particularly from WP2, in a global context. Socio-economic and policy scenarios will be developed to represent selected geopolitical trends, tailored to the macro-regional resolution of the model.

In the initial phase, feedback loops between climate risks and transition dynamics will be addressed at a coarse resolution to generate an initial set of scenarios. These scenarios will serve as a foundation for internal communication within the project and inform the first interim report. As methods and models in WP1 and WP2 mature and undergo validation, a second, more advanced scenario set will be developed. This enhanced set will explore a broader range of policies and incorporate interaction effects between climate risks and transition risks within the REMIND-MAgPIE framework.

Task 3.1 Country Risk Profiles from Transition and Physical Risks of Climate Change

A first fast-track analysis will build on existing work by integrating the latest estimates for damages into the REMIND-MAgPIE model and analysing their impacts in a limited number of existing scenarios with ordered and unordered transitions. The main objective is to identify key regions that are strongly affected by either transitions and/or physical climate risks, with a particular focus on the project's priority regions. The results will be summarised in geopolitical risk profiles to understand the high dimensionality. A special focus is placed on countries and regions that are simultaneously affected by increasing physical climate risks and transformation requirements (‘double-cost-crunch’). The models, methods and results will be discussed with the project partners, summarised in a report and published as peer-reviewed scientific articles.

• identify key regions that are strongly affected by either transitions and/or physical climate risks, with a particular focus on the project's priority regions
• Identify indicators of geopolitical risk factors which can be quantified from modeling results & match with existing Country Risk Profile formats

Task 3.2 Advanced Country Risk Profiles in a Geopolitical Context 

Building on the improved models and methodologies from WP1 and WP2, this task will refine and expand the risk profiles. For focus countries, we will evaluate not only their direct exposure to the double-cost-crunch but also their indirect vulnerabilities through changes in capital and trade flows. Additionally, we will explore the potential fiscal challenges arising from these dynamics and the feedback effects between climate risks and investment capacities for long-term emission reductions.

The geopolitical risk indicators will be contextualized within broader geopolitical developments and socio-economic trends, enabling a nuanced assessment of risk exposure and vulnerability. These enriched insights will enhance the country risk profiles developed in Task 3.1. The outcomes will be synthesized in a report and shared with project partners and stakeholders.

Task 3.3: Scenarios for Different Levels of International Climate Policy Cooperation

To benchmark and compare varying levels of international cooperation, we will develop two contrasting sets of scenarios:

1. High Cooperation Scenarios: These assume strong global collaboration, achieving exogenously defined climate targets such as the Paris Agreement objectives with cost-efficient pathways.
2. No Cooperation Scenarios: These focus on the damages and impacts, modeling country-level willingness to act on climate change under conditions of free-riding and no strategic behavior.

The scenarios will highlight not only global aggregates but also the key differences for the project’s focus countries.

Expected Outcomes

• Comprehensive risk profiles for countries, detailing economic burdens from mitigation and climate damage in light of adaptive capacities.
• Analysis of geopolitical risks stemming from these profiles, contextualized within transformation scenarios for partner countries and regions.
• Enhanced understanding of international cooperation dynamics and their implications for geopolitical stability and climate action.