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Long abstract:

While climate knowledge is proliferating in multiple economic domains, we have a poor understanding of how this information is concretely being used or integrated across sectors (Fiedler et al 2021; Siders 2019; Sobel 2021). This paper examines the use and negotiation of scientific knowledge by central banks as an input into the categorization and management of climate change as a systemic risk. Focusing specifically on the category of “physical risks”, the paper analyzes the choices made by experts assisting the Network for Greening the Financial System (NGFS) in their process of designing climate scenarios for the purpose of "stress testing" financial institutions. Through a set of preliminary interviews, I present an empirical account of which experts are (and which are not) involved in the discussions around scenario design and the kinds of assumptions underpinning their estimates of future economic damages from physical climate impacts. A growing community of climate scientists (Pitman et al 2022; Rissing et al 2022; Trust et al 2023) have critiqued this top-down economization of physical impacts, calling for more pluralistic approaches to risk assessment. Combining approaches from science and technology studies (STS) and economic sociology, this paper analyzes the distribution of practical labor and epistemic disputes between these different communities of experts, the use and diffusion of the NGFS’ assessment tools by financial institutions, and the political constraints on central bankers as they work to define joint ways of framing the problem of climate risk and incorporating such framings into forms of financial oversight.