RCP8.5 is being retired. Here's what that means for climate risk analysis.

For the past decade, one climate scenario has dominated risk analysis across finance and insurance: RCP8.5. It represented the worst-case, high-emissions pathway, the upper bound of what climate change could look like if little or nothing was done to curb emissions.

Now it's being phased out.

The next generation of climate models, CMIP7 (Coupled Model Intercomparison Project Phase 7), will inform the IPCC's Seventh Assessment Report (AR7). The new framework retires RCP8.5 in favour of updated scenarios that more accurately reflect where global emissions are actually heading. For financial institutions using climate risk analysis, this raises an obvious question: does this change anything?

The short answer: less than you might think, and for the right reasons.

What is actually changing

RCP8.5 maps to SSP5-8.5 in the newer scenario framework. It assumed a world of rapid fossil fuel expansion and limited climate policy, a trajectory that looks increasingly unlikely as a central projection given the pace of global energy transition.

The CMIP7 ScenarioMIP framework, published in April 2026, retires not just RCP8.5/SSP5-8.5 but also SSP3-7.0. These are replaced by an entirely new set of seven scenarios labelled by severity from "Very low" to "High," without the old radiative-forcing labels. The new "High" scenario sits meaningfully below the old extremes in terms of cumulative emissions, reflecting a more grounded assessment of where the world is actually heading.

Global model frameworks and national climate guidelines operate on different timelines. Norwegian national guidelines, as set out in Klima i Norge 2100, currently use SSP3-7.0 as the highest scenario for Norwegian climate projections. This reflects the best available national science at the time of publication.

Telescope's analyses for Norway follow the recommendations in Klima i Norge 2100, and our underlying data reflects the scenario framework used by Norwegian authorities. As CMIP7 and AR7 outputs are incorporated into updated national guidelines, we will update our analyses accordingly.

RCP8.5 wasn't simply wrong

It's tempting to read the retirement of RCP8.5 as a correction, as if a decade of climate risk analysis was built on exaggerated assumptions. That interpretation misses the point.

RCP8.5 was not a prediction. It was a stress-test tool: a boundary condition designed to reveal the upper limit of physical risk and the full stakes of policy inaction. In that role, it was useful precisely because it was extreme.

It also tracked observed reality better than often acknowledged. Peer-reviewed research has shown that cumulative CO₂ emissions through approximately 2020 were within 1% of what RCP8.5 projected, making it the closest match of any scenario to the historical record up to that point. The scenario became less representative as a forecast once the energy transition gained pace, but as a tool for understanding worst-case exposure, it served its purpose well.

The retirement of the old high-end scenarios is not a retraction. It is a calibration, using the best available science to keep stress-testing grounded and credible.

Lower scenarios are still a serious concern

Phasing out the highest emissions scenario does not mean the risk picture has improved. Even under the new "High" scenario, projected impacts on flooding, precipitation intensity, sea level rise, and landslide frequency in Norway remain severe. The range narrows, but the consequences within that range are still substantial.

This matters because much of the physical risk that affects property values, collateral assessments, and insurance exposure is driven by hazards that intensify across all scenarios, not just the most extreme ones. Changed precipitation patterns affect hydropower, food production, and urban infrastructure. Compound events (simultaneous flooding, heat stress, and supply chain disruption) are projected to increase in frequency under every pathway. These effects don't require a worst-case scenario to cause real financial damage.

Why scenario range still matters

No single scenario should determine an analysis. We provide a range of scenarios not to pick a single "most likely" future, but to map the full outcome space and help clients understand the breadth of possible risks.

This matters for a concrete reason: high warming levels can still materialise even under updated frameworks, through different combinations of emissions trajectories, climate sensitivity, and carbon-cycle feedbacks. Climate sensitivity, meaning how much warming results from a doubling of CO₂, carries real uncertainty. If sensitivity is on the higher end of scientific estimates, 2°C of warming could arrive faster than central projections suggest, and the consequences could resemble what we previously associated with higher scenarios.

Stress-testing across a range is exactly the kind of risk management that regulators like the ECB (European Central Bank), the EBA (European Banking Authority), and Finanstilsynet (the Financial Supervisory Authority of Norway) are increasingly expecting from financial institutions.

The bottom line for financial institutions

The retirement of RCP8.5 is a scientific update, not a reassurance. For banks, insurers, and real estate companies managing physical climate risk, the practical takeaway is straightforward.

The scenario framework is being modernised. Well-aligned tools, including Telescope, will update as national guidelines incorporate the new science. Physical risk under the current highest scenarios remains severe and warrants rigorous analysis. The case for scenario range analysis is stronger, not weaker, as models become more sophisticated. And regulatory expectations around climate risk disclosure and stress-testing continue to increase regardless of which scenarios headline the next IPCC report.

Climate risk intelligence is not about predicting the future. It is about ensuring the financial system is not caught off guard by risks that were always visible, if you were looking.