Can climate change lead to state bankruptcy? What until recently was perceived mainly as an environmental challenge is now increasingly affecting global financial markets. At Wrocław University of Science and Technology, Prof. Stavros Zenios from Durham University, a renowned expert in finance and risk management, will discuss how climate risks translate into credit ratings, public debt costs, and the stability of national economies.

We invite you to his open lecture, “Climate Shock: How Climate Change Could Trigger the Next Sovereign Debt Crisis,” held as part of the Interdisciplinary Scientific Seminar of Wrocław University of Science and Technology, on Thursday, 26 March, at 1:15 p.m. at the University’s Congress Centre (building D-20, 8 Janiszewskiego Street).

Admission is free. Registration is required via evenea.pl (link coming soon). The event is co-organised by the Wrocław branch of Academia Europaea.

The meeting at Wrocław Tech offers an opportunity to look at the climate crisis from a perspective that rarely enters public debate – through the lens of national financial stability and the future of the global economy.

Climate and public finance – a new risk landscape

Extreme weather events, the energy transition, and regulatory pressure are factors that are increasingly reflected in market valuations. Countries more exposed to the effects of climate change may already be paying higher costs to service their debt.

During the lecture, Prof. Stavros Zenios will demonstrate how climate models can be combined with stochastic debt sustainability analysis to assess the long-term consequences of environmental shocks for public finances.

The speaker will raise questions that will be crucial for governments and financial institutions in the coming decades: How should fiscal policy be conducted under conditions of so-called “deep uncertainty,” when not only scenarios but also the models themselves are uncertain? How will the transition to a low-carbon economy affect the level and cost of public debt? Who will finance adaptation measures, given that analyses show they are economically viable but require substantial investment?

The lecture will also provide an opportunity to learn about the scenarios used in financial analyses prepared by the Intergovernmental Panel on Climate Change (IPCC) and the Network for Greening the Financial System (NGFS), and to discuss whether the next global crisis could indeed originate in a “climate shock.”

Who is Prof. Stavros Zenios?

Stavros A. Zenios is Professor of Operations Management and Finance at Durham University and a Member of Academia Europaea. He is also a Non-resident Fellow of Bruegel (Brussels), Professor of Finance and Management Science at the University of Cyprus, and a Member of the National Academy of Cyprus.

He authored two books and numerous articles in leading international journals in risk management, financial engineering, and management science. He is currently working on sovereign debt sustainability issues, including the effects of climate change and the pricing of political risks. His work on personal financial planning received the 2006 EURO Excellence in Practice Award, and he also received awards for work on the performance of financial institutions.

He was awarded twice Marie Sklodowska-Curie fellowships by the European Commission. His work on financial modeling and robust optimization is cited extensively, and his book Practical Financial Optimization (Blackwell-Wiley) is used in advanced classes in European and North-American Universities. His book with Patrick Harker on the Performance of Financial Institutions (Cambridge University Press) was translated in Chinese, and in 1997 he received the INFORMS prize for his book with Yair Censor Parallel Optimization (Oxford University Press).

He served two terms as Rector of University of Cyprus, where he was the first Dean of the School of Economics and Management, and as president of UNICA-Universities of the European Capitals. He was vice-chairman of the Cyprus Council of Economic Advisors and on the Board of the Central Bank of Cyprus.

He consulted extensively with international institutions and commercial enterprises, such as the World Bank, the European Stability Mechanism, Bank for International Settlements, Union Bank of Switzerland, METLIFE Insurance, among others.