An energy transition risk stress test for the financial system of the Netherlands

Abstract

Almost 200 countries have signed the Paris Agreement: 7 a pledge to keep the global temperature rise well below 2 degrees Celsius. To realize this pledge, global greenhouse gas emissions will need to be reduced substantially. This, in turn, requires a global transition to a low-carbon economy and energy system. Such an energy transition may give rise to shocks that could be disruptive for the financial system. This Occasional Study investigates the potential financial stability impact of a disruptive energy transition for the financial sector of the Netherlands by conducting a stress test.