When I was recently asked to write a few words on climate risk and financial planning I immediately thought, 'No!'
The climate emergency is terrifying and having spent a long summer writing about climate risk and financial planning and scaring myself senseless, I had found my happy place and gone for a day sail in Chichester Harbour on our little sailing boat.
I was trying very hard not to think about climate risk.
But that email jolted something in my head. As I sailed past a raw sewage outlet pumping its disgusting effluent directly into my way, I realised today would be another futile day if I continued to ignore the signs all around us.
I recalled another recent conversation, on another day sailing, this time with my friend who works as an academic in the field of sustainability. He was providing feedback on my report "Theory of Sustainable Financial Planning", which I was in the process of developing.
"The problem is Seb, you are presenting +1.5C as if that is a safe temperature, where you don’t need to worry about climate impacts.
"It is not, +1.5C, if you will forgive this analogy, is like swimming in a river of s**t. You are almost out of your depth, you are up to your neck in it. At +2C it is up to your mouth, and much beyond +2C drowning in it becomes all but certain. It’s not a nice place to be."
It’s an analogy that seemed strangely suitable for the zeitgeist of our times and our lovely waterways, but not what you expect to hear from a climate scientist, who usually talks in graphs and stats.
But that was why we had gone sailing. To translate the graphs into real language that we can all understand.
With that analogy ringing in my head, I tried to organise my thoughts on climate risk.
Let’s start with the consequences of global heating. Most scientist agree that the human species will go extinct somewhere between +4C and +6C above pre-industrial global average surface temperatures.
From a risk perspective then, let’s call +4C functional extinction and 100 per cent loss of global GDP. Game over.
But everything is not fine at +3.9C either. We know that crops (just like humans) have a thermal tolerance and that global agriculture becomes all but impossible in a future world that is +3C hotter than pre-industrial average.
Imagining the collapse of global agriculture is not a nice exercise.
Some humans somewhere will survive, even as positive heating feedback loops continue to push the temperatures ever higher, but with the collapse of agriculture, it seems reasonable to assume that civilisation falls with it and that it is unlikely that you or I (or our clients) will be among the survivors, so from a financial planning risk perspective, lets call +3C the end.
