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On the Nature of Things: Designing Macroeconomic Scenarios of Nature-related risks for France

Author

Listed:
  • Lauriane Benoist
  • Stéphane Dees
  • Elise Kremer
  • Clément Payerols
  • Oriane Wegner

Abstract

This paper explores the macroeconomic implications of nature-related risks for France through a forward-looking scenario analysis. We first identify and prioritize key nature-related shocks with potential macroeconomic relevance. Using a multi-country semi-structural model, we then design two illustrative scenarios: one focused on water-related shocks - combining chronic scarcity, declining quality, and acute disruptions - and another on agricultural shocks, including domestic yield losses and a multiple breadbasket failure. The simulations suggest that both scenarios generate material impacts on economic activity and inflation in France. Water-related shocks lead to a stagflationary episode marked by a sharp and persistent decline in output and rising prices, while agricultural shocks result in deeper output losses due to global spillovers and food price surges. These findings highlight the macro-economic relevance of nature-related risks and call for further work on their implications for financial stability.

Suggested Citation

  • Lauriane Benoist & Stéphane Dees & Elise Kremer & Clément Payerols & Oriane Wegner, 2026. "On the Nature of Things: Designing Macroeconomic Scenarios of Nature-related risks for France," Working papers 1046, Banque de France.
    • Handle: RePEc:bfr:banfra:1046
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    File URL: https://www.banque-france.fr/system/files/2026-05/WP1046.pdf
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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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