Climate Risk Economics

New paper: Reliable Adaptation Policies to Sea-Level Rise Require Incorporating Complexity in Economic Models

With trillions of USD in assets facing climate-induced sea-level rise, oversimplified economic models might misinform responses...

egusphere.copernicus.org/preprints/20...

Yes we can no we didn’t Those who cannot learn from past failures are condemned to repeat them (apologies to Santayana)

"we must not assume overshoot will be temporary or even reversible. Some of the proposed plans to reverse temperatures are, upon inspection, extremely threadbare, serving as little more than mood music intended to maintain optimism. The reality is that large-scale CO2 removal, does not exist"

Real estate group Cushman & Wakefield sued over climate risk to worker retirement savings Case could influence wider legal questions about how long-term risks apply to fiduciary duties

This wave of litigation is only just beginning. And, it will be successful: you cannot meet your fiduciary obligations as an investor of you are not impact weighting your risk assessments and portfolio management.

 www.ft.com/content/9ac7...

AXA, Munich Re Turn to Satellites to Tame Climate Risk A wave of deals between satellite firms and major carriers points to a new front in climate risk management

AXA, Munich Re Turn to Satellites to Tame Climate Risk

FT: "The EU's climate retreat problem: punishing early movers"

Policy Pendulum

One real problem with rewarding the laggards: punishing those who took policy pronouncements seriously.

Regulatory uncertainty—and the resulting cost—is a core feature of Trumpian chaos.

It might be more pernicious in the EU that prides itself in rational policy-making.

www.ft.com/content/1f60...

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Scientists find sea levels are already much higher than we thought. That could spell trouble for the future | CNN Global coastal sea levels are on average 1 foot higher than previously assumed, a new report finds, raising alarms the world is underestimating how much land and how many people will be affected by ri...

Scientists find sea levels are already up to 3 feet higher than we thought

The findings show “the impacts of sea-level rise under climate change have been systematically underestimated"

=> the impacts will happen sooner than projected

www.cnn.com/2026/03/04/c...

Real estate group Cushman & Wakefield sued over climate risk to worker retirement savings Case could influence wider legal questions about how long-term risks apply to fiduciary duties

Real estate group Cushman & Wakefield sued over climate risk to worker retirement savings

Case could set precedent for how plans must factor in #climaterisk into their investment decisions as part of their fiduciary duty

www.ft.com/content/9ac7...

"Questions remain over why the full report was not released, with some inside sources suggesting it is because the government's own nature policies currently do not reflect the severity of the report’s conclusions"...

www.itv.com/news/2026-02...

Nature loss could cost twice as much as the financial crash - leaked report

ITV reveals some of the warnings the government chose not to publish:

Intelligence chiefs project that nature loss could lead to annual "GDP being 12% lower than it would have been otherwise by 2030"

New study in Nature Communications shows how "Global economic exposure to climate change is amplified by spatially compounding climate extremes"... and how poor countries are, again, most exposed

www.nature.com/articles/s41...

Global Instability Is Fueling Climate Risks, Singapore Warns Singapore’s government and businesses must prepare to handle accelerating risks posed by climate change, according to the country’s environment minister.

Global Instability Is Fueling Climate Risks, Singapore Warns:

- Gov and biz must prepare to handle accelerating risks

- Companies need to do more to assess risks, protect workers and infrastructure, diversify suppliers and insure against climate hazards

www.bloomberg.com/news/article...

Climate change: Doom versus gloom Should we hope for the best and prepare for the worst when tackling climate change?

"Thinking through the implications of 4C warming shows that the impacts are so significant that the only real adaptation strategy is to avoid that at all cost because of the pain & suffering that is going to cost. There is no science on how we are going to adapt to 4C warming" @neiladger.bsky.social

If I were a pachamama bigot, I'd argue this is Nature protecting itself ;)

“At the end of this process, we still believe models tend to underestimate physical risk,” NBIM said in an email to Bloomberg, referring to the real-world fallout of rising temperatures.

"'At the end of this process, we still believe models tend to underestimate physical risk,' NBIM [aka Norway’s $2.2 Trillion Wealth Fund] said...referring to the real-world fallout of rising temperatures."

Look what happens when you actually do the work:
www.bloomberg.com/news/article...

It looks like being ‘woke’, vs being in a drunken ignorance induced stupor, is a terrific way to make a lot of money in private capital … and everywhere else too. Ignore the noise. Do the work. Win:

“ESG Sustainability Trends for Private Capital in 2026” www.fticonsulting.com/insights/art...

New study: AI could increase cumulative global CO2 emissions by up to 11% higher by 2040, or reduce this by 1.4% in the best scenario, "depending on the scale of AI growth and policy intervention"

assets-eu.researchsquare.com/files/rs-858...

Recalibrating Climate Risk - Carbon Tracker Initiative Why economic damage models can miss extremes and compounding shocks near 2°C – with practical recommendations for policy and finance.

ICYMI: "Recalibrating Climate Risk" by @exeter.ac.uk and @carbontracker.bsky.social

carbontracker.org/reports/reca...

BBC: "UK winter nowhere near a record breaker despite floods and storms"... at national level

Well, a recent report reminded us that averages are hardly relevant to climate risks:

"Real-world losses are shaped by local extremes that are poorly captured by models focused on averages"

Le changement climatique, un défi clé pour 76% des agriculteurs Le dérèglement climatique touche 93% des agriculteurs en France, impactant la qualité et les volumes de leurs récoltes. Dans ce contexte, Sun’Agri, pionnier et leader de l’agrivoltaïsme, dévoile les r...

See the survey here (in French, sorry):

www.ipsos.com/fr-fr/le-cha...

- 57% of winegrowers and 56% of arborists/market gardeners have lost more than 30% of their production

- 76% of farmers believe that climate change will have a significant impact on their profession in the coming years, yet 32% have no climate protection solutions in place

- 93% of farmers are bearing the brunt: drought has affected 50% of farmers over past three years, storms 38%, frost 28%, heatwaves 24%, hail 23%

- average loss of more than 20% of production

Fascinating @ipsosgroup.bsky.social survey on how French farmers see climate risk:

52% are worried about climate and water risks, well ahead of "regulatory constraints" (42%)

Interestingly, 62% of the general public cites regulation, 20 points higher than farmers: free-market propaganda works

How extreme weather is leaving thousands of homes uninsurable In this week’s newsletter: The climate crisis is making insurance unaffordable for many – and it should worry all of us, even if we think we’re safe from floods, wildfires and hurricanes

“A reduction in the insurability of assets linked to bank lending could lead to systemic risk and financial instability", the International Association of Insurance Supervisors warned in November

www.theguardian.com/environment/...

“We’re seeing more frequent & severe extreme weather and that affects insurance prices, all over the globe"

This has prompted warnings of the emergence of “mortgage prisoners”, who cannot sell because their homes are too flood-prone to insure, and fears of rising defaults...

The Complexity Cascade: Why Physical Risk Models Diverge — and What Governance Needs to Do About It Physical climate risk vendors often provide very different assessments for the same assets. This article explains the sources of these differences and how banks can utilize model governance to manage ...

Why do physical risk vendors produce divergent estimates for the same properties? The core reason is a complexity cascade in which modeling choices compound. Robust model governance is needed to make those choices transparent and decision useful for banks. www.garp.org/risk-intelli...

exactly - actually, I was not sure until about half of the text!

Clearly, the famous Upton Sinclair quote also works with women

(“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”)

had to google this, and I liked what I found: www.facebook.com/ActorMichael...

A Supreme Court Shield for Big Oil Would Come at Your Expense When we talk about someone wanting to both eat their cake and still have it, we’re using a logical impossibility to highlight the cake-haver’s delusional mental state. When it comes to the fossil-fuel...

We're heading for a world where the Supreme Court decrees fossil fuels can't be regulated, but they can't be sued either. That would leave you paying every cent of the tab for climate damages

Gift link to my column for @opinion.bloomberg.com

www.bloomberg.com/opinion/arti...