Among them, China, India, the United States and Canada could expect higher costs as their credit scores fall by two notches under a "climate-adjusted" ratings system, the study published in the Management Science journal on Monday found.
While ratings agencies acknowledge the vulnerability of economies to climate change, they have so far been cautious in quantifying those risks in their ratings exercises because of uncertainties about the likely extent of the damage. A worst-case scenario of high emissions through to the end of the century would on the other hand result in higher global debt-servicing costs, rising up to the hundreds of billions of dollars in current money, the model found.
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