Economic Stability Analysis – Disasters including Climate Change Risks

Result of Service - A 10 – 15-page methodology describing the way to assess economic stability based on climate change at country level. The methodology needs to establish the relations between climate risks, risk to economic activities and financial risks. - Economic Stability analysis report in three countries (20 page per country) showcasing different climate change exposures and risks impacting a country’s economy and financial stability. For each country, the analysis needs to establish the climate related risks, transmission into financial systems, identify vulnerabilities, impact on economic sector and recommendations.

Work Location Home-based

Expected duration 65 days in 6 months.

Duties and Responsibilities Background:

Created in December 1999, the United Nations Office for Disaster Risk Reduction (UNDRR) is the designated focal point in the United Nations system for the coordination of efforts to reduce disasters and to ensure synergies among the disaster reduction activities of the United Nations and regional organizations and activities in both developed and less developed countries.

Specifically, UNDRR guides, monitors, analyses and reports on progress in the implementation of the Sendai Framework for Disaster Risk Reduction 2015-2030, supports regional and national implementation of the Framework and catalyses action and increases global awareness to reduce disaster risk working with U.N. Member States and a broad range of partners and stakeholders, including civil society, the private sector, parliamentarians and the science and technology community.

Under the 2022-2025 strategic Framework, UNDRR intends to accelerate its support to member states and in close cooperation with financial sector partners, support fast-track financing for DRR and ensure investments are de-risked by fostering strategic engagements, advocacy and generating guidance with evidence.

Climate change risks are increasingly impacting global economic stability and posing risks to central banks. Morgan Stanley estimates that from 2016 through 2018, weather and climate disasters have caused over $630 billion worth of economic damage worldwide. Mercer’s future modelling suggests costs of climate change related impacts on the environment, health and food security to reach between $2 trillion and $4 trillion by 2030 or as high as $24.2 trillion under worst-case scenarios. It is evident that climate induced disasters are causing severe damage to infrastructure and productive sectors, which in turn has a direct impact on the economic stability in any country. To address climate change, governments have made lots of climate policies. However, the conversion to a low-carbon economy too fast or too sudden can also trigger financial risks (ESRB, 2016). Thus, climate change has become a source of risk for financial system stability that cannot be ignored, in particular in LDCs, LLDCs and SIDs.

In lieu, UNDRR seeks to understand the exposures and vulnerabilities of a country’s economic stability due to shocks and stresses posed by climate change risks to support governments in undertaking risk informed financing decisions and regulatory policies. ‘Economic resilience’ of a government is its ability to effectively address and absorb the financial shock caused by disasters. The process of building financial resilience starts by understanding impacts of climate change risks on the productive sector and the vulnerabilities that contribute to financial instability.

The consultant will be responsible for conducting economic stability analysis of climate change risks impacts and vulnerabilities for a set of countries.

Task 1 – Literature Review

The consultant will conduct extensive literature review of economic stability analysis models taking into consideration climate change risks and vulnerabilities.

Task 2 – Methodology for the financial stability analysis Develop a well-researched, and evidence-based methodology for conducting economic stability analysis due to climate change risks and vulnerabilities at the country level. This methodology should also include details on implementation and piloting. The methodology needs to establish the relations between climate risks, risk to economic activities and financial risks.

Task 3 – Conduct financial stability analysis in three countries

Based on the methodology, the consultant will conduct desk based economic stability analysis in three countries due to disaster including climate change risks and vulnerabilities. Assessing how different climate change exposures and risks could impact a country’s economic stability and how climate change risks can be incorporated in a government’s financing decisions and fiscal policies. For each country, the analysis needs to establish the climate related risks, transmission into financial systems, identify vulnerabilities, impact on economic sector and recommendations.

Qualifications/special skills Academic Qualifications: Advanced university degree in economics, law or climate finance related area is required. Experience: A minimum of 15 years of working experience in the field of economics, climate change finance, disaster risk reduction, or related areas is required. Previous experience in working with Ministries of Finance or banking is required. Language: Fluency in written and spoken English is required. Knowledge of another UN language is an asset.

No Fee THE UNITED NATIONS DOES NOT CHARGE A FEE AT ANY STAGE OF THE RECRUITMENT PROCESS (APPLICATION, INTERVIEW MEETING, PROCESSING, OR TRAINING). THE UNITED NATIONS DOES NOT CONCERN ITSELF WITH INFORMATION ON APPLICANTS’ BANK ACCOUNTS.