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Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Please note that all times are shown in the time zone of the conference. The current conference time is: 10th Sept 2026, 07:07:44pm CEST (Norway)

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Daily Overview

Session

Climate damages and adaptation
Location: Auditorium O: Terje Hansen
Session Chair: Matteo Calcaterra, Politecnico di MIlano

Presentation 4

Sovereigns on thinning ice: Debt sustainability, climate impacts, and adaptation

Matteo Calcaterra^1,2,3, Andrea Consiglio⁴, Vincenzo Martorana⁴, Massimo Tavoni^1,2,3, Stavros Zenios^5,6,7,8

1: Politecnico di MIlano, Italy; 2: CMCC Foundation - Euro-Mediterranean Center on Climate Change, Italy; 3: RFF-CMCC European Institute on Economics and the Environment, Italy; 4: University of Palermo, Italy; 5: Durham University, United Kingdom; 6: University of Cyprus, Cyprus; 7: Cyprus Academy of Sciences, Letters, and Arts, Cyprus; 8: Bruegel, Belgium

Discussant: Mook Bangalore (Penn State University)

We stress-test sovereign debt sustainability under climate change. We link a coupled climate-economy model with stochastic debt sustainability analysis optimization to project debt trajectories for the century. We combine narrative scenarios of socioeconomic and climate pathways with calibrated aleatory scenario trees of financial, economic, and fiscal variables to account for future growth under damages from climate change. We test representative countries from different continents under climate impact functions spanning the full spectrum of impacts estimated from the climate economics literature. We find significant effects, especially under high-impact scenarios. We also test whether adaptation or fiscal consolidation can help avert a climate-debt crisis. Public financing of reactive adaptation can have a positive impact on debt sustainability, justifying its cost. Maintaining constant public spending with sustainable debt levels appears not feasible under climate impacts.