Climate Scorpion - the sting is in the tail

The Earth is warming up much faster than expected

Authors: Sandy Trust, Oliver Bettis, Lucy Saye, Georgina Bedenham, Timothy M. Lenton, Jesse F. Abrams, Luke Kemp

The main takeaways are: (these are the key findings in the report)

1. Urgency of Risk Assessment:

   There is a pressing need to conduct a realistic risk assessment of climate change promptly and take decisive actions based on the findings.

2. Planetary Solvency Framework:

   We have now hit 1.5C on a 12 month rolling average.

3. Climate Sensitivity Concerns:

   The Earth’s climate is much more sensitive than we thought.

4. Tipping Points and Cascades:

   Tipping point risks increase significantly above 1.5C – meaning we risk losing control of the climate.

5. More and worse stings:

   Extreme weather and related events will increase further with more warming.

These key points highlight the critical nature of climate risk assessment, the importance of proactive risk management strategies, and the need for coordinated global efforts to address the challenges posed by climate change.

The report on Climate Scorpion addresses the interconnectivity of risks associated with climate change by highlighting the following aspects:

1. Risk:

   Complex Interactions: Climate change drives a complex basket of interconnected risks that could threaten society and the economy. Failure to consider these interconnections may lead to an underestimation of risk.

2. Risk Cascades:

   The report explores how various risks, such as extreme weather events, biodiversity loss, sea level rise, infrastructure failure, and political instability, are interconnected and can trigger or exacerbate each other, leading to systemic effects with global implications.

3. Causal Loop Diagram:

   A causal loop diagram presented in the report illustrates how climate change acts as a driver for interconnected environmental, social, and economic risks, emphasizing the need to understand the interactions and responses that may influence risk outcomes.

4. Multi-Sector Impacts:

   Risks arising from responses to climate change can have multi-sector impacts, affecting areas such as healthcare infrastructure, population growth, economic inequality, and water, food, and energy security. Considering these interconnections is crucial for comprehensive risk management.

By recognizing and analyzing the interconnections between various risks associated with climate change, the report underscores the importance of a holistic approach to risk assessment and management to effectively address the complex challenges posed by climate change.

The report on Climate Scorpion outlines several recommended management actions for achieving a stable climate:

1. Conduct Realistic Risk Assessment:

   Urgently carry out a comprehensive risk assessment of climate change in line with best practices, considering various outcomes, tipping points, and worst-case scenarios. This assessment should be informed by up-to-date information on global warming and material factors influencing temperatures.

2. Educate and Accelerate Positive Tipping Points:

   Invest in educating the public and policymakers about tipping points and realistic climate risk assessments. Positive socio-economic tipping points can drive rapid adoption of low-carbon technologies with the right policy framework, leading to economic benefits and mitigating climate change risks.

3. Develop a Planetary Solvency Framework:

   Establish a Planetary Solvency framework to support long-term policy decisions and human prosperity. This framework should consider the interconnected societal, natural, climate, and economic risks we face and recommend actions to address them.

4. Revisit Carbon Budgets and Assumptions:

   Financial services institutions should reassess carbon budgets and related assumptions, moving towards decarbonization activities and ensuring that net-zero approaches support real-world decarbonization efforts.

5. Support Policy Action for Positive Tipping Points:

   Financial institutions should constructively support policy actions that accelerate positive tipping points in the transition to a low-carbon economy, aligning their strategies with sustainability goals.

By implementing these management actions, stakeholders can work towards achieving a stable climate, mitigating risks associated with climate change, and fostering sustainable development for the future.

Read the full report here

https://actuaries.org.uk

Report published March 2024