By Jack Santa Barbara*
Some actuaries at the University of Exeter in the UK have partnered with a group of earth scientists to examine what they term “planetary solvency.” Their report states:
“Planetary Solvency assesses the ongoing ability of the Earth system to support our human society and economy. In the same way that a solvent pension scheme is one that continues to be able to provide pensions, a solvent Earth system is one that continues to provide the [natural]services we rely on, support ongoing prosperity, and a safe and just future.”
One might assume that the International Panel on Climate Change (IPCC) and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) have undertaken such an assessments. According to the actuaries, these international bodies have grossly underestimated the risks involved from global heating and biodiversity loss. They state:
“Unmitigated climate change and nature-driven risks have been hugely underestimated….Global risk management practices for policymakers are inadequate, we have accepted much higher levels of risk than is broadly understood.”
Why the huge discrepancy between what the IPCC and IPBES have assessed as risks, and what the actuarial professionals conclude? Given that the issue is the capacity of earth systems to support a complex civilization, this is a question of considerable importance.
The actuarial report points out that the IPCC and IPBES rely predominantly on science rather than rigorous risk management methodologies. Risk management approaches are science-based, but they integrate additional practical ways of dealing with uncertainty and risky outcomes.
Science is concerned with precise measurements and establishing underlying laws of nature. Science appropriately requires a lot of healthy scepticism and replication to achieve a high level of consensus within the scientific community. These are clearly important ways of understanding the world.
However, the scientific methods that provide a high level of precision and certainty are not equipped to analyse and manage risks that may be low probability but have catastrophic impacts. This is what actuaries do.
Actuaries assess uncertainties in a rigorously methodical manner to understand how the worst outcomes might develop. By focusing on the extreme outcomes, they bring prudence into the decision-making process, to ensure that even the extreme risks are manageable. Their analyses allow policy makers to knowledgably understand uncertain risks, and develop policies to avoid disasters.
For example, European insurance companies are required to have policies in place that ensure they will not go insolvent any more often than once in 200 years. The chance of insolvency in any one year is thus set at 0.50%.
Such a low level of risk appetite seems appropriate for the financial security of the insurance company and its millions of clients.
This low level of risk tolerance is in contrast with the IPCC emissions targets for avoiding a 1.5 to 2-degree Centigrade increase in global heating. The IPCC target provides a 50% chance of avoiding a 2 degree C increase over preindustrial levels. This is 100 times riskier than the chance of a European insurance company going insolvent, and more than 1000 times riskier than a nuclear power plant failure.
In a separate actuarial report, the IPCC level of risk tolerance is clearly deemed “unrealistic.”
Another reason cited for the inadequate risk assessment carried out by the IPCC is that it focuses on what is perceived as most likely. Again, this is how science works. It bases conclusions on accumulated evidence and gathers more to increase precision and certainty. In contrast, risk management takes the worst possible outcome associated with an agreed risk tolerance, even if that outcome has a low probability, and ensures that outcome is avoided.
A related reason cited for the large discrepancies between sound risk management practices and what the IPCC does, is the frequency of updating risk probabilities. Because good risk management practices involve focusing on extreme but low probability outcomes, there is a frequent reassessment and updating of risk levels. It assesses whether the latest best evidence increases or decreases risk levels, so that policy actions can be adjusted.
The IPCC process set the above target in 2018 and it has not been updated since. This, despite considerable evidence that global heating is accelerating much faster than previously estimated.
Another major difference is what is included in the assessment. The science on ecological tipping points is clear in terms of their presenting potentially catastrophic risks. However, because science has not yet achieved precision regarding what level of global heating will trigger tipping points, or precisely what their impacts would be, they are not included in the IPCC assessments. Science is conservative, but not necessarily prudent.
The actuarial approach to risk management is not anti-science. Rather, it builds on the scientific evidence to understand consequences, and to direct policy. But it does understand the limitations of such research for timely policy initiatives. If definitive evidence is not available, the risk management approach can still make use of expert judgement, and assess consequences, especially if they are severe.
Waiting for the certainty provided by science may well make appropriate action too late to avert disaster. The actuarial report indicates this is what may be happening with our global attempt to deal with the climate and biodiversity threats we currently face.
There is more in the actuaries’ report to understand about the inadequacies of our current assessments of climate risks. More importantly, they identify a number of steps that could be taken to provide a more realistic assessment of the risks we face regarding planetary solvency.
The report states:
“The choice is simple: continue to be surprised by rapidly escalating and unexpected climate and nature-driven risks, or implement realistic Planetary Solvency risk assessments to build resilience and support ongoing prosperity. We urge policymakers to work with scientists and risk professionals to take this forward before we run the ship of human progress aground on the rocks of poor risk management.”
Here are just a few of the recommendations the report makes along these lines.
- Establish an independent organisation to conduct annual planetary solvency assessments to inform timely decision making
- Ensure policy makers are climate, risk and ecologically literate; this applies not only to international institutions, but to policy makers are all levels
- Consider systemic risks across a broad range of issues, including economic, climate, ecological and social, including how risks in one area affect risks in other areas.
- Identify the biggest risks, not out of gloom and doom, but prudence
- Make use of expert judgement when the science isn’t certain.
The report also identifies a list of resilience principles to be used in conducting a planetary solvency assessment. These tools provide a much more realistic and prudent risk understanding for policy makers to ensure the worst earth systems’ impacts are averted.
The earth scientists and actuaries involved in producing this report included a planetary solvency assessment based on their understanding of the situation we face. Their analysis indicates that we are currently outside the risk tolerance (green space) for all areas other than Economy.
The situation projected for 2050 ranges from Decimation for Economy, and Extreme or Catastrophic for all other areas.
These results project a reduction in GDP (a US$10 trillion loss), 2 billion deaths, and significant social and ecological breakdown by 2050, unless rapid policy changes are implemented.
Perhaps we should listen to the actuaries, one of the most conservative, and prudent, groups on the planet.
*Jack Santa Barbara, PhD, is a retired CEO, academic who lectured in sustainable business, and philanthropist, with a long standing interest in sustainability issues.
76 Comments
What to do about it though Kate. To use the language of the article, it is Extremely Unlikely that FF carbon will be left in the ground instead of being burnt and the carbon released into the atmosphere. It will be Catastrophic for any political party in government to proactively enact the much lower standard of living required to obtain a level of Planetary Solvency.
Are you claiming we could maintain an economy that manufactures private vehicles (even electric ones) without extracting and burning fossil fuels? Because using *less* finite resources still results in them being exhausted - just on a longer time frame.
Paying extra on your air ticket to offset emissions and putting out your recycling is nowhere near achieving the planetary solvency of the article.
I am not advocating that nothing be done, I am just being realistic by saying nothing effective will be done. Turkeys don't vote for an early Xmas.
I am not advocating that nothing be done, I am just being realistic by saying nothing effective will be done. Turkeys don't vote for an early Xmas.
Spot on.
Thinking we can ringfence our "obligations" in the form of green washing the same old behaviour is barely moving the needle.
We can see this in how the push is for products and services to meet emissions criteria, rather than greatly reducing the amount of consumption we're doing. It's the same madness, just slightly slower. Or faster, if our regulatory bodies just keep stretching goalposts about how green something is, necessitating the production of yet another new thing, and making what already exists "obsolete".
Waaaay too much. 'bout time to move on to the next Chicken Little scam. "New Zealand was a net CO2 sink of −38.6 ± 13.4 million tonnes C yr−1. ...We present a comprehensive assessment of the natural and anthropogenic carbon (C-CO2) fluxes for Australasia as a whole, as well as for Australia and New Zealand individually, for the period from 2010 to 2019, using two approaches: bottom-up methods that integrate flux estimates from land-surface models, data-driven models, and inventory estimates; and top-down atmospheric inversions based on satellite and in situ measurements."
https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2023GB007845
Until you realize that this research only covers 1 of bunch of greenhouse gases, completely ignores permanence and eventual return of carbon storage and embodied greenhouse gas intensity from cross-border trade.
The above post is cherry picking research and presenting a limited view to sway the uninitiated.
But yeah nah, it's the narratives 🤨
completely ignores permanence and eventual return of carbon storage and embodied greenhouse gas intensity from cross-border trade.
Try reading the paper before posting your reckons? Cringe.
"In addition to the territorial carbon budget quantified using the bottom-up and top-down approaches, we estimated non-territorial emissions, which are the emissions associated with the net trade of fossil fuels, crop, wood, and livestock to and from other countries."
If we enacted the changes we should be making, young people would flee to where other places don't.
Bhutan for instance, have downplayed the sort of consumerist capitalism much of the rest of the world has adopted. Most everyone there is provided the basics for human existence (power, internet, phone etc). The youth leave in droves for the shiny lights and nice things accessible elsewhere.
The ones that would are fleeing anyway. If they want high material lifestyle they would move to Australia, no question , they are now.
But don't put your values on all the young, there's plenty who have greener values, and plenty more from overseas who would want to move here, if we had a high green value economy.
It's not the young who are the problem.
The ones that would are fleeing anyway. If they want high material lifestyle they would move to Australia, no question , they are now.
The contrast between a non consumer society and a consumer one are far greater than a slightly more affluent version of two consumer economies.
But don't put your values on all the young
Which are what exactly?
It's not really a secret that the core consumer age group are the young, for various reasons. Not just current youth, but youth of all periods.
and plenty more from overseas who would want to move here, if we had a high green value economy.
High cost green economy. You haven't created any additional value, you've just found a more expensive way to do the same thing.
And green economies aren't exceptionally unique, nor of priority attraction for migrants (as a group, there is a minority that are moving due to environmental views). The migrant flows from rural to urban, and from developing to developed nations, primarily young people. Most people migrate for economic or political reasons.
It's not the young who are the problem
No, that'd be human nature, in general terms.
I wasnt really singling out young people being the problem, I was just highlighting the issues in trying to get everyone to accept a lifestyle that is materially far less abundant than what people are used to, or see elsewhere. You'll lose more people than you'd gain, and they'd mostly be younger.
That's why my solution; tax consumption into the stone age, would be political and economic suicide.
Switzerland recently rejected the idea of living within Planetary Boundaries in a referendum. https://degrowthistheanswer.substack.com/p/switzerland-votes-not-to-put…
They appear to prefer continued economic growth to surviving.
They appear to prefer continued economic growth to surviving.
I'm not sure most people fully understand the choices (this forum is a good example). Let's say you've been diagnosed with heart failure,
Option 1 - you can still have another 40 years of fulfilling and rewarding life but you need to stop smoking, cut out the drug taking, drop your alcohol intake to a few units a week, cut out junk food and fast food, eat a balanced diet and do some moderate exercise like walking, tramping, team sports. You will still be able to have a wonderful life, eating healthy food, exercising with friends and family and living in your hometown
Option 2 - continue with you current trajectory, eating shit food, doing no exercise, alcohol and drug abuse, smoking and you will die within a few years and in those intervening years you'll also probably be evicted from your house and your kids and family will be thrown on the poverty heaps.
The people on here that say it isn't possible misunderstand the two options and think that they are being asked to give up option 2 in order to survive, this is because those that benefit from all the unhealthy stuff spend an incredible amount of money on making people believe they need and like those things more than the healthy things.
You fix that by targetting the peddlers of lies not by throwing up you hands and saying but people will always chose smoking, McDonalds, fizzy drinks, etc... Anyone who thinks NZ needs everyone to own a ute to thrive has been well and truly suckered in by PR and marketing.
We are probably less healthy than in a long time, but getting people to do option 1 is fairly hard to do, even if faced with imminent death. So a transition to a more modest existence is a tall order.
Even if you know how you work (as in, your body and your mind), and what you should do to be utilise it, doing it is a task of decent, continual effort.
You don't need to get people to do 1, this is what we're naturally inclined to do given a choice.
It is? With food for instance, we're engendered towards fats, salts, and sugars. You dont need *insert evil corporate food retailer* to convince people a piece of fried chicken tastes better than a stick of celery.
Likewise "exercise" isn't a thing humans traditionally do voluntarily, it just so happened we used to be fitter, because we had to lead physically active lifestyles.
People are able to make money with option 2, because they're exploiting latent tendencies.
What's your proposal exactly, banning the sale of certain things, or their marketing.
What's your proposal exactly, banning the sale of certain things, or their marketing.
Taxing things accordingly, based on their externalities, using the revenue to pay for the better alternatives. If you want to pay x4 times more for a bag or crisps and hot dog than a healthy tasty meal go for it but you pay extra for the unhealthy option than the healthy option.
Tax massive petrol/diesel cars - use the money to pay for better public transport, subsidise electric vehicles
Tax sugary/fatty processed food - subsidise healthy foods
Tax land/second/third homes - use the revenue to build state houses
As you are undoubtedly aware (so I'm putting this in for the benefit of any newbies), those things needing taxing are under the control of big businesses, which have the money to buy the best lobbyists who will do their utmost to convince politicians (that enact the taxes) that these are terrible ideas.
What could work is to get someone who is above the law to push this along - maybe Bishop Brian and his Band of Belligerent Bigots.
Sorry, that should read "Bishop" Brian and his Band of Belligerent Bigots.
When you consider the mental bombardment by the tools of consumer society, along with being exposed to "information media" emphasising the imperitive of yet more groooowth at least once an hour and I would say 30% of the population voting for long term survival was a pretty good result. 70% on the other hand are still plugged into the matrix.
The 70% will require deprogramming or shaking out of their comfort zone. The good news is deprogramming is possible. Detoxing from intellectual pollution is as simple as going cold turkey for a few days.
"This evidence suggests that sustained cross-cutting media leads individuals to update their beliefs consistent with the cross-cutting source’s message, contrary to motivated reasoning theories"
Given that we are currently in an advanced state of ecological overshoot https://doi.org/10.3390/world4030032 , the reduction in energy and material throughput (demands on nature's sources and sinks) required is indeed significant. A reduction in our material standard of living would be necessary, and likely inevitable one way or another. A planned reduction in material throughput still allows us to enjoy a high level of life satisfaction, because the things that provide good levels of life satisfaction do not require high material standards of living. But we have been brainwashed to believe life satisfaction requires high material standards.
It would be useful for the author to clarify the cause of 2 billion deaths. I'm guessing they are thinking of poor quality drinking water and poor sanitation causing spread of infectious diseases in displaced citizens in refugee camps. But to put it in perspective, the recent "worst in living memory " pandemic caused between 8 and 18 million deaths. 2 billion is a quarter of the world's population- sounds a bit extreme.
In the past and in Africa today starvation is the result when 50% of crops fail. In the majority of the world it would mean eating less prime steak and drinking fewer cups of coffee. Halving NZ's food production would hit our exports but we would not starve. Famine even in India back in the 1960s was a matter of finance not actual food production. The developed world could handle a 30% reduction in food availability by simply not throwing a third of what we buy in the bin.
in Africa today starvation is the result when 50% of crops fail
I think it's worth remembering that Africa as a whole has been 'persuaded' to farm cash crops to supply the much more densely populated west (and elsewhere). If it came to the crunch, they could produce their own food much more readily than many places. Their problem is debt more than a lack of resources.
2 billion would be 20% of the population. Far higher death rates have occurred throughout history. The 14th century black death being one of the worst killing about 50% in Europe. Mao managed to starve about 5% of his countries population with a mere change of agricultural policy.
It's been my belief for many years, with more recent intensity of fear, that humanity is headed for widespread wars as people become more stressed by environmental ecosystem collapses and their consequences; also that the IPCC is a very conservative group that is too fearful to state much more than averages of average data, and avoids getting the general public out of their comfort zone. Why more wars?- because fear produces aggression, and when people vote for leaders who are in denial then global warming and environmental collapse problems don't get solved- which in general is the state of things with still increasing green house gas concentrations in the atmosphere, and a never so rapid in history (that we know of) rate of atmospheric heating.
I ride an UBCO electric bike now, and haven't registered the diesel wagon for over a year, finding that almost all shopping can be done online and delivered by couriers who are far more efficient in their freight operations, and regularly donate to EKOS helping protect Solomon Islands rainforest from logging for tropical hardwoods. I regret my former naive overuse of fossil fuels.
Can you get chocolate biscuits without cocoa from overseas delivered to your door, in a plain paper bag instead of in a plastic tray, that's in a plastic wrapper?
I suppose you could get one delivered from a bakery. Expensive biscuits but.
What about Bananas? Can we eat Bananas?
This is a bit wierd. We can make our own cookies, or they could be packaged in waxed paper easy enough. Bananas grow in northland, but we pay a decent wage so they aren't as cheap. The first things that need to go are over consumption related, i.e. fast fashion, gadgets designed to break.
Either of those options are pretty inflationary (NZ grown bananas are some 300% more expensive, and biscuits in wax paper would also be a great deal more expensive).
And if we carried the same methodology over everything we commonly consume, we'd be consuming a lot less.
"the IPCC is a very conservative group" Yes
If you are fearful to the point of effecting your mental wellbeing, best not read this.
"We show that the climate sensitivity required to yield best agreement with observed global warming in the past century is 4.5°C for doubled CO2, which is 50% larger than IPCC’s best estimate of 3°C."
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.columbia.edu/~jeh1/mailings/2025/Acceleration.12Feb2025.pdf
I read your link and gave it a thumbs up. I've previously read other scientific papers that indicate even worse global warming is possible. My fear of the future is therefore rational mixed with a bitter recognition that enormous suffering and injustices will be unleashed on millions of impoverished people who have contributed very little if anything at all to global warming. Food producing plants in general do best at between 18 and 24 C, so a 4.5 C temperate rise will cause massive famines.
Get back from under the bed chap and unwring those hands! You are not going to starve. Have you learned nothing from Ehrlich's epic fails in the starvation prediction department?
"While the original smaller data set implies yield declines of all crop types even at low levels of warming, on the full data set global average yield changes are zero or positive even out to 5 °C warming."
https://www.nature.com/articles/s41598-025-90254-2?utm_source=rct_congr…
"Here we use three long-term satellite leaf area index (LAI) records and ten global ecosystem models to investigate four key drivers of LAI trends during 1982–2009. We show a persistent and widespread increase of growing season integrated LAI (greening) over 25% to 50% of the global vegetated area, whereas less than 4% of the globe shows decreasing LAI (browning). Factorial simulations with multiple global ecosystem models suggest that CO2 fertilization effects explain 70% of the observed greening trend, followed by nitrogen deposition (9%), climate change (8%) and land cover change (LCC) (4%)."
https://www.nature.com/articles/nclimate3004
Your response 'Get back from under the bed chap and unwring those hands! You are not going to starve. Have you learned nothing from Ehrlich's epic fails in the starvation prediction department?' is a jumble of imaginings and insults. Are they in self defence, as in projections and rationalizations to avoid personal anxiety, or simply attention seeking behaviour?
From https://ourworldindata.org/will-climate-change-affect-crop-yields-futur….
'Another key point is that even if global yields of wheat increase, and rice and soybean are positive, the negative expectations for maize, millet, and sorghum are very concerning.
These are staple crops for many of the poorest and most food-insecure countries in the world. The injustice of climate change is that it will be those who are already the worst off who will be hit hardest.'
Leftists like to burn like everyone else. But they do acknowledge the physical reality of human caused global heating. That makes them hypocrites, or ecomodernist cultists.
The right on the other hand, love to burn to the point of being pathological arsonists, rejecting physics, while acknowledging the pseudoreality of the sky fairy and rapture. That makes them insane!
The 5 recommendations are improbable. For example who is the expert if as the author says the science is not reliable?
A solution - change all house insurance policies from the arbitrary 365 days to say five or ten years. The insurance companies have their experts who I'd trust over journalists and academics. They would begin to selectively apply risk factors related to flooding and fires. Note house insurance in enforced by banks when they issue mortgages.
My house is half way up a hill so drains well and is way above sea level and my insurance would go down while all those living in the bays close to sea level would be paying far more.
After the California fires who will lose out most those that were burnt out but taking full compensation and moving somewhere more sensible or those that survived and who cannot get insurance for next year and therefore cannot sell to anyone who needs a mortgage? The latter will have an almost valueless asset.
- Establish an independent organisation to conduct annual planetary solvency assessments to inform timely decision making
- Ensure policy makers are climate, risk and ecologically literate; this applies not only to international institutions, but to policy makers are all levels
I am sure all those who were involved in this risk assessment were well-intentioned and believe what they have come up with is both worthwhile and important, but they seem to be completely blind to the entirely obvious fact that it will be ignored.
On point 1, just who would establish such a body and what powers would it have to 'inform timely decision making?
Point 2 is simply laughable.
Does anybody believe that the leaders of the US, China, India or Russia will pay attention to this report? Of course not and since these countries are responsible for much our global emissions, that's fairly relevant don't you think? Whether you believe that a climate catastrophe is almost upon us or not, the fact is that emissions are still rising, though more slowly. Even coal use is still rising, thanks almost entirely to China and India. The big oil companies are still spending vast sums on finding and developing new gas and oil resources.
1. baring the likelihood of the UN taking on the role of conducting annual planetary solvency assessments, any credible group of earth scientists and professional actuaries could take on the task. At least the information would then be available for all to consider.
2. identifying political obstacles is fair enough. But it doesnt negate the importance of valid and reliable information concerning the solvency of our only planet with a biosphere. Who knows what might be possible if more people understood the predicament we have created?
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