Understanding the intricate relationship between climate dynamics and the macroeconomy is crucial for informed policy and long-term planning. However, there is a gap between climate modeling and the understanding of its full macroeconomic effects, partly due to challenges such as nonlinear climate dynamics, feedback loops, and model complexity. To address this, the National Academies of Sciences, Engineering, and Medicine, under the auspices of the Roundtable on Macroeconomics and Climate-Related Risks and Opportunities, convened a workshop on November 1-2, 2023, to consider the state of knowledge on cascading, compounding, and nonlinear physical climate risks and their implications for the macroeconomy. Through panels of invited speakers and interactive breakout discussions, the workshop focused on physical climate risks and explored how different disciplines assess and model impacts. Workshop discussions explored current and historical examples of shocks to the macroeconomy and how those have been modeled, and experts shared some of the lessons they have learned that may be relevant to policy makers today.
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