Actuaries are the people who compile and analyze statistics and use them to calculate insurance risks and premiums. Their studies are finely honed, and because billions of dollars of profits and losses are determined by their conclusions, they are as objective and precise as any in our modern world.
Actuaries now have a sobering view of the world’s economic future if the urgency of global climate change is not addressed. The risk is that the global economy could face a 50% loss in GDP between 2070 and 2090 if immediate policy action is not taken on the climate crisis.
The study, Planetary Solvency: Finding Our Balance With Nature, is the fourth report of the Institute and Faculty of Actuaries (IFoA). It was done in collaboration with climate scientists and in conjunction with the University of Exeter in England. Its summary appeared in The Guardian Weekly of February 7, 2025. The report develops a framework for global risk management to address these risks and to show how this approach can support future prosperity. But it also shows how a lack of a realistic risk to guide policy decisions has led to slower action on greenhouse gas emissions than is needed.
Sandy Trust, lead author and IFoA Council Member, said: “You can’t have an economy without a society, and a society needs somewhere to live. Nature is our foundation, providing food, water and air, as well as the raw materials and energy that power our economy. Threats to the stability of this foundation are risks to future human prosperity which we must take action to avoid.”
The IFoA report is extremely critical of earlier studies. “Widely used but deeply flawed assessments of the economic impact of climate change show a negligible impact on GDP, rendering policymakers blind to the immense risk that current policy trajectories place us in. The risk-led methodology set out in this new report shows a 50% GDP contraction between 2070 and 2090 unless an alternative course is chartered.”
Meanwhile, the Copernicus Climate Change Service reported that January, 2025, was the hottest month on record. It was 1.75°C above the pre-industrial temperature, marking 18 of the last 19 months that were all above the 1.5°C aspirational limit set by the world’s community of nations. The last 12 months have averaged 1.55°C, and the last 36 months 1.54°C above the pre-industrial benchmark.
In Europe in the summer of 2025, the United Kingdom had record temperatures during four heatwaves. The rest of the continent suffered from extreme weather events and extensive fires. The short-term economic costs are estimated at $50 billion, with expected damage to increase to $129 billion by 2029 (The Guardian Weekly, Sept. 19, 2025). Another study suggests Europeans should prepare for the possibility of protracted and successive heatwaves of 45°C during the summer months. Elsewhere, Canada has had its second worst forest fire season, only exceeded by 2023, with extensive fires again in California but also in Texas.
At present temperatures, which are merely an inkling of what is to come as carbon dioxide emissions continue to rise, populations are already being impacted by food system shocks, water insecurity, heat stress and infectious diseases. If unchecked, mass mortality, extensive displacement, severe economic contraction and conflict become more likely.
Kartina Tahir Thomson, IFoA President, said: “Actuaries are experts at dealing with risk and the collaborative nature of our profession means we work for the greater good of society. This new [Planetary Solvency] report shows that now more than ever we need to continue working with policyholders, governments, scientists and other stakeholders, to come up with a solution that will address this emergency, for the benefit of all of society.” She added that, “Our climate risk tool addresses the discrepancy between climate projections and policy outcomes. It provides a comprehensive overview of current and projected risks (up to 2050) across four key domains: climate, nature, society, and the economy.”
Professor Tim Lenton of the University of Exeter said: “Current approaches are failing to properly assess escalating planetary risks or help control them. Planetary Solvency applies the established approaches of risk professionals to our life-support system and finds it in jeopardy. It offers a clear way of seeing global risks and prioritizing action to limit them.”
This report by the Institute and Faculty of Actuaries is yet another in the proliferating list of warnings that we are receiving from numerous sources about the dire consequences that will result from unchecked global greenhouse gas emission and our overreach of the nine Planetary Boundaries that regulate our ecosystems—we have presently breached seven of them. So far, our collective response is not commensurate with the tone of urgency that keeps coming from a wide range of experts. This report from the actuaries is just another in the rising chorus of alarms. We can’t say that we haven’t been warned.
Ray Grigg for Sierra Quadra
Please Note: As a fundraiser for the 35th anniversary of the Quadra Island Conservancy and Stewardship Society, David Suzuki will be presenting “Humanity Over the Edge: Transformation or Extinction”, at the Quadra Community Centre at 7:30 pm, October 18th, 2025. Recommended donation: $20.00. Larger amounts will receive tax receipts. Book sales and book signing will begin at 7:00 pm.
Top image credit: City Lights of Asia and Middle East 2016 – courtesy NASA Earth Observatory via Wikimedia (Public Domain)