CFA Institute Sustainable Investing Certificate Climate Models, Scenarios & Downscaling: practice questions

Question 1 · medium

Why does AR6 present many regional projections by global warming level, such as 2 °C, rather than only by scenario and year?

1. It makes all regional changes identical, so one map suits every region
2. It is required because no scenario reaches more than 2 °C of warming
3. It allows regional results to ignore greenhouse gas concentrations entirely
4. It limits the effect of differing sensitivities and ties change to targets

Question 2 · medium

Why do regional rainfall projections often disagree in sign between models?

1. Model spread and internal variability stay large for regional rain
2. All models agree, and apparent disagreement comes from unit conversion errors
3. Rainfall is not simulated by climate models, only estimated afterwards
4. Scenario choice alone determines the sign, so models never differ

Question 3 · medium

An analyst cites the projected change for a single grid cell in a single year as a prediction. What is the error?

1. Projections for single years are always exact if the model is good enough
2. Projections cannot be expressed for any period shorter than one century
3. Internal variability dominates single years and cells, so it is not a forecast
4. Grid cells are always too large for any projection to be stated for them

Question 4 · easy

Which pair correctly distinguishes acute and chronic physical climate risks?

1. Acute: risks lasting more than a decade; chronic: risks lasting less than a week
2. Acute: risks to banks only; chronic: risks to farms and households only
3. Acute: carbon taxes and regulation; chronic: litigation and reputational damage
4. Acute: extreme events such as floods; chronic: long-term shifts such as sea-level rise

Question 5 · easy

Which of the following is a transition risk?

1. Sea-level rise that salinises coastal farmland
2. A carbon price on fertiliser production
3. A cyclone that destroys a grain warehouse
4. A heatwave that cuts milk yields on dairy farms

Question 6 · medium

What did the TCFD recommendations ask organisations to disclose regarding scenarios?

1. A single forecast of their emissions in 2100 under the most likely climate scenario
2. Strategy resilience under several scenarios, including one at 2 °C or lower
3. Only the physical risks to assets located within their home country
4. The temperature outcome of every scenario published by the IPCC since 1990

Question 7 · medium

How are physical and transition risks typically related across climate scenarios?

1. Strong mitigation raises near-term transition risk and lowers long-run physical risk
2. The two risks are unrelated, so scenarios can treat them independently
3. Weak mitigation lowers both physical and transition risk at the same time
4. Strong mitigation raises both physical and transition risk at the same time

Question 8 · medium

Which IEA scenario describes a pathway to net zero energy-sector CO₂ emissions by 2050?

1. Current Policies hot house
2. Stated Policies Scenario
3. Announced Pledges Scenario
4. Net Zero Emissions by 2050

Question 9 · hard

Which is a common pitfall in corporate climate scenario analysis?

1. Using more than one scenario to span plausible physical and transition outcomes
2. Including compound risks such as heat and drought in sourcing regions together
3. Choosing time horizons such as 2050 that are long enough to show physical risk
4. Presenting precise financial numbers from long, uncertain model chains

Question 10 · medium

What does IFRS S2 (2023) require regarding climate scenario analysis?

1. Using only the SSP5-8.5 scenario for every entity regardless of size
2. Using climate-related scenario analysis to assess resilience, proportionate to the entity's circumstances
3. Avoiding scenarios entirely and reporting only historical emissions
4. Publishing raw climate model data for every asset the entity owns