This report under the “Climate change modelling information” series, presents relevant developments reported by key international climate modelling institutions. This issue sets a particular emphasis on nationally determined contributions (NDCs), mid-century strategies and the role of finance in addressing climate change.

Research suggests that current Integrated Assessment Models (IAMs) do currently not clearly represent the interactions between finance and money creation and climate as well as the risks posed by climate damages to the economy. The first section of the report highlights several recent modelling efforts made by Cambridge Econometrics and the French Development Agency to address that gap which sought to better represent the interactions between the financial, macroeconomic and biophysical spheres in their E3ME and GEMMES models, respectively. Various publications showing the increasing recognition from academia and central banks of the threats posed by climate change to the financial system are also highlighted as well as the need to better represent carbon-related systemic risk factors in macroeconomic and financial stability assessments.

The second section focuses on recent modelling developments linked to the implementation of mid-century mitigation strategies. A paper published by the Deep Decarbonization Pathways (DDP) project describing the innovative pathway design framework used to model mid-century low-emission pathways for 16 countries in the lead up to the twenty-first Conference of the Parties is presented. The ongoing modelling efforts by Climateworks Australia to develop a new model as part of the Decarbonisation Futures project is also highlighted.

The third section focuses on ongoing efforts by the Alberto Luiz Coimbra Institute for Graduate Studies and Research in Engineering (COPPE) linked to the implementation of nationally determined contributions (NDCs). These consisted of developing new applications for the Total-Economy Assessment (TEA) model and including social and environmental variables in their energy model called Model of Long Term Expansion (MELP).

Various modelling developments linked to Sustainable Development Goals (SDGs) are reported in section four. These include publications from the Council on Energy, Environment and Water (CEEW) on scaling rooftop solar in India, improvements in the World Induced Technical Change Hybrid (WITCH) model by the European Institute on Economics and the Environment (EIEE) and integration of existing models by the Joint Global Change Research Institute / Pacific Northwest National Laboratory (PNNL).

A range of other recent climate modelling developments are reported in the last section with a particular focus on research exploring the potential economic and climate impacts of restructuring the Chinese industry and a comparison with other regions and countries across the globe.