The Next Economy
How Climate Risk Can Inform Climate Solutions

Climate change affects every aspect of our lives — from the individual and family unit to national and international governance. The myriad ways that climate impacts show up in our world can be paralyzing to contend with. A chronic drought is different from a heat wave, but they both cause undeniable suffering. Although we have the statistical and scientific frameworks to project the physical impacts of future climate change-related events, the fast-and-yet-slow elements of climate change (ex: extreme weather events and chronic exposure) can bedevil our capacity to absorb projected losses. The solution is increasing attention on the role of resilience in fortifying individuals and communities in the face of grave loss of lives, livelihoods and system function.

Do we have the mental and decision-making models to adapt? Have we accounted for the vast and disruptive effects of climate change on total planetary health?

Climate mitigation has historically been distinct from climate adaptation. Youth activists and other constituents agitating for urgent emissions reductions, and the governments and businesses endeavoring to act, are vital components of a future adaptation strategy. The reality is, climate mitigation draws down climate risk by making impacts and adaptation less onerous, and those benefits are realized the sooner greenhouse gas pollution is halted.

There is also an interplay between climate risk and certain mitigation measures. At COP26, a particular focus was on tree planting and tree conservation as a means to sequester more carbon dioxide. Yet, climate risk tells us that the ability of terrestrial photosynthesizers to sequester carbon is increasingly at risk as drought, heat waves and wildfires proliferate and amplify.

Climate risk has also spread to our oceans. The oceans have been buffering our terrestrial communities from the worst impacts of climate change. But the unraveling associated with cascading effects is becoming even more pronounced for our coastal communities. Sustainable fishing and other aspects of the blue economy are being compromised by the accelerating climate impacts on the oceans. These include marine oxygen depletion, marine heatwaves (new in the past several decades), accelerating ocean acidification, and other extreme conditions.

The fast and yet slow pace of climate change, along with the geographically dispersed nature of the impacts, can make a collective risk accounting seem like a monumental undertaking. Yet we monitor the health of the earth system and quantify the drawdown of greenhouse gas emissions while we simultaneously project future states and most viable pathways to inform our decision-making. Likewise, we also need to factor climate risk into how we approach mitigation and climate solutions.

This would mean that planting a tree in an area that will experience increasing drought should be factored into the costs and benefits of that activity. And preserving and restoring coastal blue carbon would have additional value due to the enhanced resilience afforded by these ecosystems.

This way of understanding climate risk utilizes best available science to craft decision-making that is most responsive to present and future planetary health. We have the means to do this using sustained monitoring and modeling. And there are even more exciting techniques being developed in the climate tech realm — from novel satellites and drones to machine learning/AI in weather and climate forecasting.

Asset managers and governments are increasingly keen to quantify how their portfolios reflect climate risk and enhance ecosystem resilience. The confluence of these factors should mean we arrive at a more holistic deployment of climate risk tools that gives us the adaptive capacity to navigate a path toward enhanced planetary health.