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How big is big? Roundtable

Climate and Nature Economic Policy Scenarios: Reflections from the Exeter Climate Forum

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July 1-2, 2026
Streatham Campus, University of Exeter
Agence Française de Développement (AFD) and the University of Exeter (Exeter Climate Policy)

The Exeter Climate Forum 2026 hosted a series of discussions with the Climate and Nature Economic Policy Scenarios (CNEPS) initiative — a collaboration convened by the Agence Française de Développement (AFD) and the University of Exeter. CNEPS aims to help ministries of finance and public development banks build scenario tools designed for their own decisions, as climate and nature move to the centre of macroeconomic and fiscal policy. (See the CNEPS background note)

Across a public roundtable and two working sessions, participants explored what those tools should look like and how to build them. In the spirit of open exchange, the conversations were held under the Chatham House Rule, so the summary below reports the ideas raised without attributing them to individual participants or their institutions.

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Key themes at a glance 
  • Finance ministries and development banks need scenarios built for their decisions — not borrowed from central banks or from target-setting exercises.
  • The hard part is turning targets into policy: scenarios must show how an economy actually changes and help manage the fiscal risks.
  • Relevance wins — tools should speak to real budget decisions and lead with opportunity, not abstract risk.
  • Extremes rarely arrive alone; measuring an economy’s resilience to cascading shocks is central.
  • Climate cannot sit in a silo — in budgets, in public framing, or across borders.
  • The value is as much in the process — coordination and a shared language — as in the outputs.

How big is big? Bringing finance ministries into climate and nature scenarios

Over the course of the Forum, and more specifically the sessions hosted by Climate and Nature Economic Policy Scenarios (CNEPS) initiative, discussions broadly return to a simple question: how big is big? The true economic cost of climate change increasingly lies not in gradual, average losses but in rare, threshold-crossing events such as compound disasters, commodity and inflation crises, disorderly transitions, ecological tipping points. Designing scenarios that take these “fat-tailed” risks seriously forces a hard choice about how severe a shock to plan for, and whether that is even the right question to ask, which in turn reopens more basic ones: which climate, nature, financial and geopolitical variables are genuinely macro-critical for a given economy, and how to reflect tipping points and abrupt shifts without becoming too complex to guide a decision.

Why finance ministries need their own scenarios

Existing scenario tools are built for different purposes. The pathways behind Nationally Determined Contributions (NDCs) and long-term strategies are made to set targets and objectives while the scenarios used by central banks and supervisors, such as those of the NGFS, are made to assess systemic financial risk, catering more to the traditional central bank mandate of price stability. Consequently, these existing tools do not support the economic-policy choices themselves such as policy design, and budget and debt management.  

This is the gap for finance ministries and public development banks where what matters more is not just whether public spending rises or falls, but the quality of that spending, the choice of financing instruments, and the role of development banks in blending public and private capital. The ambition running through the discussion was to help these institutions become “scenario-makers” rather than “scenario-takers” with processes they genuinely own, sitting inside their existing workflows rather than imposed from outside.

That ambition runs into a recurring difficulty. Agenda-setting scenarios such as the pledges and pathways of NDCs and long-term strategies rarely carry the detail on how an economy actually transforms such as which sectors grow or shrink, what it costs, whose jobs change, what new investment is needed, and crucially by how much government revenue and costs shift, making them hard to turn into budget or policy decisions. With the targets themselves largely settled, what finance ministries most need is help translating them into effective policy design while managing the fiscal risks along the way which means a scenario has to open up those underlying structural changes and keep pace with a shifting external environment, rather than stopping at the target. 

To develop these capacities, there must be clarity on what actually engages a ministry of finance. While appetite for abstract discussions of climate risk is limited, the interest in much needed strategic opportunity is not i.e. green industrialisation, energy security, diversification. Tools have to speak to real decisions, ideally showing which policies tilt the curve, by how much, and at what cost, while remaining honest about deep uncertainty. And they have to be feasible: a realistic, “good-enough” entry point matters more than sophistication for ministries working under constraints of capacity, data and fiscal space. On adaptation, designing measures that can be scaled up later lets ministries stage spending over time instead of committing a large sum upfront, which matters for ministries with tight fiscal space.

Taking the extremes seriously

More technically, the core of the discussion was the behaviour of extremes. Much as delays cascade across a transport network, small shocks propagate into large ones; the “slope” of that behaviour is, in effect, a measure of an economy’s resilience, and it can be measured for carbon prices, energy markets, social unrest or trade tensions before a shock hits. The point is not to forecast the unforecastable, but to combine this reading of risk with an assessment of the policies that could compress the worst outcomes.

Part of what makes the extremes so consequential is that they rarely arrive alone. A flood brings immediate damage, forces emergency spending, and then squeezes the rest of the year’s budget thus leaving less for schools, health or debt service, and sometimes straining the government politically. That is why this is about development as much as climate: the same scenarios have to weigh nature and biodiversity loss, and shrinking water supplies, against a country’s core priorities of growth and poverty reduction. And it exposes a stubbornly practical problem: a country’s development plan, its budget, its NDC and its adaptation strategy are usually drawn up by different teams on different timetables such that a climate target can end up with no money attached to it, and an adaptation plan may never reach the people who actually set the budget.

However, climate action need not be a separate box of its own. As participants pointed out, it is sometimes more effective to connect climate to conversations already underway such as energy security, health, jobs, and critically the core priorities of growth and poverty reduction mentioned above than to present it as a separate agenda, especially given how politically intensive it is to win public support and media attention for long-term risks.

Breaking down the silos

The same refusal to silo climate applies across borders too. Ambition at home depends on the cooperation setting abroad, since trade, technology and supply chains are global by construction. Scenarios could thus help structure that cooperation constructively rather than as competition. Additionally, that means modelling international response, such as the scale and speed of liquidity and concessional finance, and the design of the instruments that deliver it so that the burden does not fall only on the countries least responsible for the problem. 

The value is in the process

This emphasis on cooperation point to the value of these exercises lying as much as in the process as in the outputs. Building scenarios together brings ministries of finance, central banks, development banks, statistical offices and researchers into a common framework and a shared language. Several voices stressed the importance of the data and statistical specialists who hold much of the underlying climate and biodiversity information, and of linking the work to country platforms and national development banks. 

What comes next

Taken all together, insights and perspectives gathered throughout the event point to a practical near-term focus for the initiative: working with partner countries to take stock of the scenarios that already exist and read them from a finance-ministry point of view, as the foundation for building new ones. With the hope that in the process of doing so the space opens for exchange between countries facing similar realities. This will be complemented by regional and global engagement, with steps towards a first set of quantified country scenarios to follow.

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