Title page

Contents

Abstract 2

Non-technical summary 3

1. Introduction 5

2. Integrating Input-Output into climate risk analysis 9

3. Data 11

3.1. Input-Output Data 11

3.2. Climate-related GDP-at-risk data 12

3.3. Modelling climate shocks 13

4. Model description 14

4.1. Shock propagation algorithm 15

5. Results 21

5.1. GDP Losses 21

5.2. Sectoral losses 24

5.3. Discussion and assessment of the quantitative results 25

6. Concluding Remarks 27

References 29

Appendix A. Indicators of vulnerability: looking beyond trade size 33

Acknowledgements 35

Figure 1. OECD, Inter-Country Input-Output Tables, 2021 edition (million USD) 11

Figure 2. GDP at risk from climate change-related physical risks, RCP 8.5 scenario 13

Figure 3. Illustration of the trade reallocation mechanism 20

Figure 4. GDP-at-risk resulting from IO amplification of physical risks under the RCP 8.5 scenario. If all hazards were to realise simultaneously, which would... 23

Figure 5. GDP-at-risk resulting from IO amplification of physical risks under the RCP 8.5 scenario. If all hazards were to realized simultaneously, which would... 24

Figure 6. GVA-at-risk for the 10 most affected sectors, aggregated at EA level, under the RCP 8.5 scenario. If all hazards were to realize simultaneously,... 25

Figure 7. Correlation between hazard-weighted trade risk index and first-order GDP losses through trade 33

Figure 8. Correlation between hazard weighted trade risk index and GDP losses calculated through IO exposures 34