Climate Crisis – Is There a Way Out?
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The world shrugged its shoulders. The Paris Agreement 1.5C target is unattainable; 2C unlikely. “Overshoot” is here. But the world carries on, enduring more frequent extreme weather events, gradually incurring more costs and losing more lives.
Financiers factor in extra costs into their modelling and change nothing. Only crises galvanise people into action. And there are plenty of prospective tipping points that could do that – when it will be too late to respond.
Economic modelling traditionally links climate damages to changes in average temperatures - societies and markets suffer most from extremes. Incremental approaches miss the shocks that cause step change in climate patterns.
The University of Exeter, together with Carbon Tracker, conclude that:
At higher levels of warming, impacts are more likely to cascade across sectors and geographies. This undercuts against a core assumption in many economic models, which assume that economic growth continues indefinitely, merely at reduced rates.
Climate change is experienced through local and regional extremes, such as heatwaves, floods and droughts, rather than averages used in most modelling.
GDP can mask full harms by failing to account for impacts on mortality and morbidity, inequality, ecosystem loss and social disruption; GDP actually increases through spending on recovery.
Climate risks undermine the assumptions of continuous growth fundamental to many economic models as tipping points and tail events increase.
Six imminent climate tipping points were identified in a report to COP30, obviously with greater risk at higher temperatures:
coral reef die-off wiping out ecosystems
collapse of Antarctic ice sheet raising sea levels
collapse of sub-polar gyre convection (a North Atlantic current system, bringing nutrients to the surface)
collapse of Atlantic Meridional Overturning Current (AMOC), that drives the Gulf Stream
retreat of mountain glaciers (with impacts on river flows)
Amazon rainforest die-back, destroying ecosystems and reducing carbon absorption.
Other tipping points include permafrost melting (another vicious circle), Greenland ice sheet, West Antarctic ice sheet.
The Strategic Climate Risks Initiative four-part podcast Overshoot explores how a way out of this impasse might be found.
Episode 1, “Uncharted territory” looks at how the world is in the process of overshooting the 1.5 safety limit. In 2018, 3 years after the Paris Agreement that settled on the 1.5C target, the IPCC — the UN’s climate science body —published a report on 1.5, exploring the impacts of going above it. The report concluded that the threats posed by climate change were far deadlier than generally accepted. As temperatures headed to and beyond 1.5, the threats to food and water security, to human health would all spiral.
Limiting global warming to 1.5 degrees implies reducing emissions of carbon dioxide by about 45 percent by 2030. The good news is that renewable energy (notably solar and wind) is making inroads into carbon emissions.
But “Overshoot” too is worried about tipping points, in particular AMOC. Arctic sea ice could extend as far south as the Netherlands and the east coast of England; tropical rainfall belts will move - very strong rain is not going to be where it used to be. Combined with other climate impacts, AMOC collapse could destroy more than half of the world’s ability to grow wheat and maize — two crops that underpin the global food supply.
Many believe that Overshoot has now become inevitable. So the question becomes: how do we cope?
Episode 2: “Carbon Suckers” explores some solutions. Many governments have set net-zero targets – but that doesn't mean stopping burning fossil fuels. Governments and companies are betting the future on inventing technologies that suck carbon out of the atmosphere.
Bioenergy with Carbon Capture and Storage (BECCS) is a concept whereby large forests could be grown to suck carbon from the atmosphere. The wood could then be burned to make electricity — in power plants fitted with carbon-capture devices. No new emissions would enter the atmosphere. That meant not just zero-carbon electricity — but negative emissions on a global scale.
BECCS was not intended as a substitute for reducing emissions – it couldn’t achieve the scale in time. But climate modellers turned to the idea as a way of coping with ever-increasing emissions in a more energy hungry world. A fantasy. Countries and companies are burning fossil fuels, the world is overshooting 1.5, and at the same time, they say they’re committed to staying below 1.5. How can that add up? Answer: more assumed future carbon removal. The promise of carbon sucking gives a seductive excuse to carry on emitting — it makes it seem like there’s an easier way to get to net zero. One oil company even claimed a “zero-carbon” barrel of oil – it says it will suck carbon from the air later and store it underground — someday.
The scale of the challenge is immense. Without reducing emissions, carbon sucking would have to be a planetary-wide engineering project, requiring as much land as twice the size of India and about twice today’s total agricultural water use.
And all carbon that’s taken from the atmosphere must be stored indefinitely — for generations. The storing is expensive too — and the energy costs are huge. You end up with carbon-removal facilities incentivising growth in fossil-fuel power output, because of the new energy demand.
The world does need to develop carbon-removal capabilities if we want a liveable climate. That’s the reality of overshooting 1.5. But we can’t avoid catastrophe without a massive acceleration in decarbonisation. This involves reducing energy demand. Housing is one area that is ripe for this - buildings that naturally stay cool or warm, that use passive techniques and insulation, need far less energy. Another is removing planned obsolescence — companies designing products that break after a few years. Stamping down on that — demanding durable, repairable goods — reduces energy use, saves money, and eases the carbon burden.
Episode 3 – “The Minsky Moment”
So what can be done? If we want to decrease emissions we need to stop funding oil companies. But pension funds typically ignore emissions and invest in fossil fuels. Is it possible to get disinvestment?
It seems a challenge. Pension funds’ modelling tells them that even at 4C temperature rise, their funds are only slightly affected. Yet, at 3C or 4C, the world is totally different – their view is shockingly complacent. And they are not the only ones. The Office of Budget Responsibility argued that at a 3C rise would affect GDP by 8% - serious but manageable. A governor of the US Federal Reserve said “Climate change is real… but I do not believe it poses a serious risk to the safety and soundness of large banks, or the financial stability of the United States.”
So why is the economic modelling throwing up such strange results? Mainly, because they are built of the flawed assumption of linear change – with climate change things can go non-linear very easily, and that’s before we factor in the tipping points discussed earlier.
Also many economists focused only on the immediate effects of climate change — like heatwaves that damage crops or storms that smash infrastructure. But that’s only a small part of the overall picture. Impacts don’t happen on their own - they happen in sequences, creating domino effects.
Another flawed assumption: that countries can just repair the damage. Indeed, as we have seen, the repair effort itself increases GDP. But when whole regions become arid, no re-building is possible.
And many of these analyses assume that acting on climate change is far more expensive than it’s turned out to be. For example, when these models were built, solar power was still costly — now it’s the cheapest electricity in human history.
When the illusion finally breaks — when investors realise that climate change is far more destructive than they’d been told — it could trigger what financial experts call a Minsky Moment. Named after the economist Hyman Minsky, a Minsky Moment is when it dawns on investors that things are worth far less than they thought.
But maybe things are starting to change. The Bank of England, the European Central Bank, and the Network for Greening the Financial System are beginning to challenge old assumptions. New models are being developed — ones that incorporate tipping points, cascading risks, and feedback loops between nature and finance.
Episode 4 - Derailment
After the massive floods near Valencia in 2024 in which more than 200 people died, you would have expected a boost to climate change actions. But the far-right Vox party used the disaster to promote its scepticism of climate action, arguing for less action on climate change. Their leader, Santiago Abascal, claimed the cause was “climate fanaticism” - climate policies were to blame. His story was that environmentalists’ desire to let rivers flow freely had led to the demolition of dams, which left communities exposed to surging rivers. Vox surged in the polls.
This tactic isn’t unique to Spain. It’s part of an emerging global playbook. Soon after the Valencia floods, Los Angeles was devastated by wildfires. Donald Trump downplayed the clear role of climate change, instead claiming the scale of the disaster was down to environmentalism. Specifically, the policy of local Democrat politicians to protect a rare fish species by stopping the over-pumping of rivers.
This doom loop is known as ‘derailment risk’, the danger that the worsening consequences of climate change could undermine action to tackle its causes. More climate adaptation can make societies more resilient to disasters. Which could mean less chaos and anger coming in their wake, and so fewer opportunities for anti-climate politicians to derail action. But responding to disasters drains resources, making it harder to invest in adaptation, which makes the next disaster even more costly, which means less adaptation, and so on. Even those political leaders who support decarbonisation have often failed to invest in adaptation.
In March 2025, the French government published its climate adaptation plan to adapt to a 4C temperature rise. France is warming faster than the global average, so this equates to about 3C globally. Which is plenty hot enough to totally disrupt supply chains, massively increase displaced people destabilising geopolitics, sparking wars. Claiming that France can live with 4C stretches credibility.
It’s now eminently possible that the world could hit the catastrophe of a 3, even 4C temperature rise. That has pushed governments into making promises and plans for how they might protect people from this. The European Scientific Advisory Board on Climate Change says coping with 4C is “daunting but do-able”. But these plans are based on assessments that exclude domino effects, tipping points, and just about all the things that make 4C un-survivable. When you include these, it’s clear that plans to live with 4C are another fantasy. Which all begs the question: why is this happening?
Governments are expected to have the answers. So, they make plans using guesses, assumptions, and simplistic projections: ‘fantasy documents’. If societies can be adapted to 4C, then more fossil fuels can be burned. Societies don’t need transforming. Fossil fuel companies can continue to make vast profits. But if government plans were honest, admitting that these things might not be survivable, then it’s clear that people would want change.
Fundamentally, this is all about fantasies:
that we’re not in a new climate reality
that technology will save us while we keep burning fossil fuels
that overshooting 1.5 won’t be that bad
that we can calmly plan for the worst and still carry on.
Some of these fantasies result from good intention and misguided action. But they’re also reinforced by those who wish to keep society - and their profits - as they are. But even that is a fantasy. Because going over 1.5C means everything will change; an unstable climate will see to that.
“Overshoot” is a very good analysis of the dynamics underpinning resistance to action on climate change with lots of consideration of domino effects, non-linear change and tipping points. But it doesn’t address what the implications of trying to achieve a 1.5C limit actually are.
When building climate change into scenarios, the two extremes (1.5C or 4C) both mean radical change. The status quo is the one thing we know cannot continue. 4C is clearly a dystopia; to achieve 1.5C society must change, fossil fuels reserves must be left in the ground (“stranded assets”), disrupting economies and geo-political power.
Written by Huw Williams, SAMI Principal
The views expressed are those of the author(s) and not necessarily of SAMI Consulting.
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