For example, under the most severe NTTL scenario – “Meltdown” – global GDP is projected to plummet 7.56% below baseline in 2028, and stabilise at 2.66% below by 2030. Under the NGFS’s most disorderly scenario (“Sudden Wake-Up Call”), the deviation for 2028 year is just 1.27% below baseline, and by 2030 is almost aligned with the base case. 

This reflects how the NTTL scenarios integrate extreme, “tail” outcomes in their estimates. The “Meltdown” narrative presumes a world riven by nationalism and geopolitical conflict, where an energy trade war makes fossil fuel prices volatile and protectionist policies lead to rising inflation and, in turn, a global recession. The NGFS “Sudden Wake-Up Call”, in contrast, assumes a delayed and abrupt transition from 2027 – which incurs much lighter economic damage when modelled using an equilibrium approach. 

The optimistic scenarios are similarly distinct. The NTTL’s upside scenario (“Roaring 20s”) estimates economic growth surges 1.54% above the baseline in 2026 and 0.74% in 2027, reflecting the assumed increase in output that accompanies a clean energy transition powered by supportive policies and market forces. The NGFS scenarios are far less positive. The “Diverging Realities” scenario assumes a slight, 0.32% uplift to the baseline in 2030, and the “Sudden Wake-Up Call” a 0.02% bump that same year.

What Drives the Difference?

The NGFS scenarios primarily focus on varying the pace and ambition of climate policy and technology deployment. But they assume stable geopolitical conditions, functional markets, and limited acute physical shocks through the 2020s. This is reflected in the tight range of deviations from the baseline.

In contrast, the NTTL scenarios embed volatility across multiple axes. Political instability, trade conflict, energy price shocks, positive technology tipping points, and extreme weather events are all represented. This produces a much broader range of plausible outcomes, better reflecting the radical uncertainty economies face in the midst of systems change.

For example:

• In the NTTL “Boom & Bust” scenario, an initial surge in fossil fuel prices leads to an overheated economy, which in turn causes central banks to raise interest rates and precipitate an energy and financial crash before a recovery takes hold

• In “Meltdown”, geopolitical fractures, policy paralysis, and escalating physical climate shocks combine to produce persistent economic contraction.

• Even in the “Green Phoenix” scenario, where markets drive a partial transition in the absence of strong political leadership, economic growth wobbles around the baseline as private actors struggle to make up for policy shortcomings.

NGFS scenarios, by contrast, do not directly model such abrupt transitions, geopolitical feedbacks, or financial system spillovers.

Why This Matters

The NGFS framework has been invaluable in raising awareness of transition and physical climate risks, and embedding the practice of climate scenario analysis across the financial system. But the equilibrium-oriented models underpinning these scenarios may understate the kinds of non-linear shocks that can trip up investors.

The NTTL scenarios aim to produce decision-useful data for investors, by illuminating how systems change results from the complex interaction of politics, financial markets, social dynamics, and economic (and physical) tipping points. These are the very forces that drive volatility in financial markets. A full appreciation of these empowers investors to craft resilient portfolios that can withstand the rigors of disruptive systems change.

Both NGFS and NTTL scenarios serve important, but different, functions. While the NGFS scenarios offer standardisation and comparability across institutions, the NTTL scenarios provide depth, richness, and a more plausible representation of the volatile real-world transition already unfolding.