Loss forecasting: The key to the climate middle game
If climate variables cannot be used to improve credit loss forecasts, can we still trust climate scenario projections? And how long can a chess analogy be stretched to make a point about climate risk?
Like many people, I got into online chess during the pandemic. My own game improved quite a bit through this process, but I’m still a bit of a wood pusher. My best claim to fame is that I managed to wrangle a draw against a 1500 ELO family member last summer after fighting back from a terrible losing position.
I also like to watch grand masters playing each other, but only if they explain what they’re doing in real time and why. I plan to use this ridiculously long digression to make an important point about climate risk. We’ll get there eventually, just stay with me.