Paper: arXiv 2604.16716
Authors: Satya Narayana Panda, Aishworzo Saha
Abstract
This paper develops a geospatial framework for climate risk stress testing in California with applications to banking and climate-exposed sectors such as agriculture, real estate, and tourism. The study integrates physical hazard mapping, sector-specific exposure analysis, and scenario-based financial risk assessment to evaluate how wildfires, drought, flooding, extreme heat, and transition risks may affect regional economic activity and financial stability. The framework is intended to support portfolio monitoring, climate scenario analysis, and institutional readiness under emerging disclosure and risk-management standards. In addition, the paper provides a survey-based implementation guide for benchmarking current climate-risk practices and data needs across industry and academic stakeholders.
Complexity vs Empirical Score
- Math Complexity: 3.0/10
- Empirical Rigor: 6.5/10
- Quadrant: Street Traders — practical and empirical, lighter on theory
Why this score: The paper relies heavily on geospatial mapping, scenario analysis, and survey methodology rather than complex mathematical modeling. It offers strong practical utility for regional financial stress testing and climate risk management, though it lacks deep quantitative or empirical validation.
Research Flowchart
flowchart TD
A["Research Goal: Assess Climate Risk Stress & Financial Stability in California"] --> B["Data Integration: Geospatial Hazards & Sector Exposures"]
B --> C["Scenario Analysis: Physical Hazards & Transition Risks"]
C --> D["Financial Risk Modeling: Portfolio Impact on Banking, Ag, Real Estate & Tourism"]
D --> E["Survey Benchmarking: Industry & Academic Readiness"]
E --> F["Outcomes: Regional Vulnerabilities Identified & Stress Testing Framework Delivered"]