The risk of climate ruin

Produced as part of the Managing climate risks and uncertainties and strengthening climate services CCCEP research programme theme

How large a risk is society prepared to run with the climate system? One perspective on this is to compare the risk that the world is running with the climate system, defined in terms of the risk of ‘climate ruin’, with the comparable risk that financial institutions, in particular insurance companies, are prepared or allowed to run with their own financial ruin. We conclude that, in terms of greenhouse gas emissions today and in the future, the world is running a higher risk with the climate system than financial institutions, in particular insurance companies, would usually run with their own solvency.