
A sobering warning has been issued in a new report titled "Planetary Solvency - finding our balance with nature," authored by a team of distinguished risk management experts.
This report integrates risk management techniques highlighting risks of mass mortality and global economic crash, which become more likely the more we exceed the 1.5°C target.
Human mortality could exceed 2 billion deaths, and the global economic risk is a contraction of global GDP to 50% of current levels within the next half-century. The further away we land from the Paris Agreement's 1.5°C target, the bigger the consequences are.
Moreover, the University of Exeter and the Institute and Faculty of Actuaries (IFoA) established a framework for assessment and mitigation. The climate crisis often leads us to feel powerless, and climate mitigation advocates are often thought to exaggerate the risk. The authors of the report, as risk experts, approach it as any other risk: they quantify it precisely, lay out the potential consequences, they underline root causes, and they design a plan for mitigation. The bad news is that, according to the report, the world is on the brink of a global catastrophe like never seen before. Not only that, as actuaries, the authors underline that while the climate risk is known, it is likely underestimated. What's worse is that it isn't really being managed, setting us on a lethal course.
The good news is, we know exactly how to mitigate this risk.
Why Climate Action Is Vital
International agreements such as the Paris Agreement have aimed to curb greenhouse gas emissions, but the transition to renewable energy is not happening quickly enough.
Use of fossil fuels and high emission activities in all aspects of the economy leads to insignificant emissions reductions. The report highlights that our current market-led approach to mitigating climate and nature risks is inadequate.
We are witnessing more frequent and intense fires, floods, heatwaves, storms, and droughts. Without decisive action, these events could escalate into catastrophic scenarios, including crop failures, significant sea level rise, and altered climate patterns, threatening food security and creating violent conflicts.
While experts have been warning us about these risks for decades, the report highlights that not much has actually being done, leading us to being potentially already insolvent.
Underestimated Risks
The report reveals that the risks associated with unmitigated climate change and nature loss have been significantly underestimated. Climate change impacts are occurring at lower temperatures than previously estimated, posing a substantial threat to human security.
Consequences include mass mortality (from tens of millions to 4 billions depending on how much we exceed our targets), involuntary mass migration, severe economic contraction, and violent conflict if these risks are not addressed.
"Tipping points increase risk exponentially past 1.5C. Emissions and GHG levels imply >2C by 2050. Highly likely Catastrophic warming levels experienced pre 2050 with Extreme warming Possible to Likely. Policy support required to radically accelerate transition, reduce emissions and leverage natural solutions."

It appears that the Paris Agreement goals were not informed by realistic risk assessment and implicitly accept a high risk of crossing tipping points. With the average temperature for the last 12 months at 1.5°C above pre-industrial temperatures and the rate of warming accelerating, breaching 1.5°C risks triggering multiple climate change tipping points. Every fraction of a degree increases the risk.
The report calls for research to inform actions to limit these impacts and urges policymakers to implement realistic and effective approaches to global risk management. It emphasises the need for a more cautious and precautionary approach.
How to Mitigate the Risk
To mitigate the aforementioned risks, we must respect planetary boundaries by setting clear limits on emissions and resource use. And the steps to do that are clear, it's just a matter of whether we're going to take them or not.
First, regular, independent risk assessments are crucial to identify systemic risks and tipping points. The authors recommend setting up annual risk assessments within the UN and the OECD.
Secondly, policymakers need ecological literacy, and global collaboration is essential to align efforts. Decisions should follow the precautionary principle, addressing worst-case scenarios proactively.
Last but not least, governance should prioritise risk-led policies and accelerated decarbonisation, including carbon removal and ecosystem restoration, and societies must prepare for inevitable impacts by investing in resilient infrastructure.
In other terms, we need to build "policymaker capacity" through education and risk assessments and management.
But these policies are no secret. They are laid out in national climate plans and that are recommended by climate experts: subsidise, incentivise and deploy low carbon energy, electrification of end uses, and energy efficiency, while removing greenhouse gases from the atmosphere and restoring nature. Other key measures are detailed in the report as well as IPCC reports. These are all measures we know we need to do, and have known about for decades.
A Wake-Up Call for Policymakers and Society
The report serves as a wake-up call for policymakers and society. It underscores the urgent need for realistic and effective global risk management to prevent catastrophic outcomes and ensure human prosperity.
By implementing the recommended actions, we can strive to maintain Planetary Solvency and secure a sustainable future for generations to come. But policymakers don't operate in a vacuum. They are accountable to voters. They also depend on civil society, experts and businesses for action - in this sense, membership organisations need to step up as they span all three.
The Institute and Faculty of Actuaries (IFoA) is leading the way in this critical area. With extensive experience in risk management, the IFoA provides valuable insights and practical solutions for policymaking.
Recommendations include annual risk assessments by an independent body to provide comprehensive risk information to policymakers; setting strict limits on activities contributing to climate change and nature loss; programs to enhance policymakers' understanding of this global life-threatening risk.
This report serves as an inspiration for other membership organisations to leverage their expertise and influence to address global challenges. By doing so, they can play a pivotal role in driving meaningful change and ensuring a sustainable future for all.
We deeply encourage membership organisations to identify what makes them and their sector unique, and activate levers that are unique to them by collaborating with their members, as well as with policymakers and associations representing related industries.
If you would like to join our network of membership organisations and receive support and peer to peer learning opportunities to help become your sector's climate leader, you can join the Climate Action for Associations Collective here.
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