23.01.2025

Civilisation on the brink

Actuaries issue a stark warning. Between 2070 and 2090 the global economy faces a 50% loss due to ecological shocks. Eddie Ford argues that this has profound consequences for the sort of socialism we envisage

Donald Trump has now signed his promised executive order, giving notice that the US intends to exit yet again from the Paris agreement “rip-off” - joining Iran, Libya and Yemen as the only countries outside the global agreement.

Withdrawal had a limited impact the first time round, because the decision did not take effect until November 2020, due to United Nations regulations, but this time it could take as little as a year, as the new administration will not be bound by the accord’s initial three-year commitment. At the same time, he revoked a non-binding executive order from the Biden era aimed at making half of all new vehicles sold by 2030 electric. Trump has also pledged to reverse the last administration’s efforts to grow the ‘clean’ energy sector, calling it “the green new scam.”

So US billionaires, corporations and fund managers are being urged to speed up their robbery of nature, their reckless squandering of natural resources, their pollution of the air, water and soil.

The US is already producing record amounts of oil. Under the ‘green’ Joe Biden, the country became, once again, the world’s biggest oil and gas producer. Last year saw a record 758 drilling licences issued. Presumably, Trump’s aim is to overtake China and, once again, become the world’s biggest emitter of CO₂ and other such greenhouse gases.

Terrifying

Meanwhile, last week, the distinctly non-radical Institute and Faculty of Actuaries - 32,000 members worldwide - issued a terrifyingly comprehensive report. Actuaries are, of course, strategic thinkers, who use their considerable analytical, mathematical and statistical skills to help measure the probability and risk of future events. Their business is insurance and reinsurance and they are being increasingly employed by governments.

Anyway, its report, Planetary solvency - finding our balance with nature shows the danger of the climate crisis reaching an economic tipping point with catastrophic implications, and should be read by everyone.¹

In fact, one journal writing about the report, The Energy Mix, issued a trigger warning about how “this story includes details on the impacts of climate change that may be difficult for some readers” and, for those “feeling overwhelmed by this crisis situation”, supplied a list of resources about “how to cope with fears and feelings” brought about by the scope and pace of the climate crisis.² Perhaps this might act as a corrective to those head-in-the-sand ostriches who think the CPGB is morbidly gloomy or pessimistic about the dangers represented by the capitalist-driven climate crisis.

Actuaries are not known to be flighty, prone to wild guesses, or anything like that. By instinct and professional training they are about cool calculation and carefully looking after the bottom line for their clients.

Anyhow, the IFoA report starts by reminding us “we are part of the Earth system, which we depend on” - providing us with “essentials such as food, water, energy and raw materials” and these ecosystem services are not substitutable, as “they cannot be replaced by technology when they are gone”, whatever Elon Musk or Mark Zuckerberg might think. In other words, nature is “the foundation that underpins our society and economy” - one “gifted by billions of years of evolution and finely tuned processes”.

But the stability of this foundation, and the Earth system as a whole, is under threat - the report goes on to talk about “unprecedented fires, floods, heatwaves, storms and droughts” that “if unchecked” could become catastrophic, including “loss of capacity to grow major staple crops, multi-metre sea-level rise, altered climate patterns and a further acceleration of global warming”. Therefore, the IFoA says, “we risk triggering tipping points such as Greenland ice sheet melt, coral reef loss, Amazon forest dieback, and major ocean current disruption” - all of which risk “causing a domino effect or cascade of accelerating and unmanageable damage”. If multiple tipping points are triggered, “there may be a point of no return, after which it may be impossible to stabilise the climate”.

From this grim, but sober, assessment, unless you believe in technological quackery or divine salvation, the IFoA draws its central finding - that unmitigated climate change and nature-driven risks have been “hugely underestimated”, as the impacts from global warming are “materialising at lower temperatures than estimated” - meaning that the severity and frequency of extreme events are “unprecedented and beyond model projections”. The Paris agreement goals, for example, were “not informed by realistic risk assessment”, as “they implicitly accept high risk of crossing tipping points”, because there is a “time lag” between emissions and the warming that is experienced, meaning that unless emissions are reduced, far more warming is in the pipeline.

Externalities

This is especially the case, as our planet “may be more sensitive to greenhouse gases than we thought”, meaning that net-zero-carbon budgets may now be negative for the 1.5°C goal. Confronted by this unfolding situation, global risk management practices are totally inadequate, as they too willingly “accepted much higher levels of risk than is broadly understood” - mainly for the reason that policymakers “often prioritise the economy with their information flows focused on this”. But this is a tragic mistake, as our “dominant economic model doesn’t recognise a dependence on the Earth system”, viewing climate and nature risks as externalities.

It goes without saying, or at least it should, that this is a chronically urgent matter for human security - if not for the continued existence of our human civilisation - if it is not dealt with in some way or other, then mass mortality, involuntary mass migration, severe economic contraction and conflict become more likely. Major “societal upheaval could spread from vulnerable regions through our globalised socioeconomic systems”, driving responses such as food or water hoarding, acting as “feedback loops” to worsen social, economic, and political challenges.

Given that existing climate change risk assessment methodologies understate economic impact, as they often exclude many of the most severe risks that are expected, they fail to recognise that there is a “risk of ruin”. Using the exact words of the report, existing risk assessment methodologies are precisely wrong, rather than being roughly right.

Believing estimates that put the damage from global warming as low as 2% of global economic production for a 3°C rise in global average surface temperature is delusional. This supposedly blinds political leaders and others to the real risks of their policies - assuming they care at all. Doubtless Donald Trump does not care, not least with his “drill, baby, drill.”

But that would be to miss the fundamental point. It is not about personality. Capitalism, as a system, is based on constant expansion. Capital subordinates its personifications to the endless search for more and more profit. Everything that gets in the way of expansion is to be overcome: trade unions, human physical and mental limits, nature and its carrying capacity. As the IFoA says, the degradation of nature’s gifts, such as forests and soils, or the acidification and pollution of the ocean, act as a risk-multiplier on the impacts of climate change and vice versa.

Existing risk management techniques, the IFoA points out, typically focus on single risks in isolation and thus are “missing network effects and interconnections” - not fully understanding the “compounding risks”. Fiddling while Rome burns. Unless immediate action by political leaders is taken to decarbonise and restore nature, building up resilience to worsening and inevitable climate impacts by respecting the Earth’s carrying limits, the report concludes that we are in imminent danger of “planetary insolvency” - the plausible worst-case hit has the global economy facing a 50% loss in GDP between 2070 and 2090 from climate shocks.

That would amount to civilisational collapse. Yes, most of us will not be around then, but our grandchildren will be - so we owe it to them to do something about the climate crisis, if they are to see some sort of future worth having. Well, hopefully they will still be alive, because at 3°C or more by 2050, the IFoA thinks that with the “breakdown of several critical ecosystem services and Earth systems”, there could be more than four billion deaths and a “high level of extinction of higher-order life” on the planet - insects like cockroaches will carry on having a good time - inevitably accompanied by “significant socio-political fragmentation worldwide”, leading to generalised state failure.

Nostradamus

A more cheerful scenario at 2°C or more by 2050 has two billion deaths and a 25% loss in world GDP, with a “partial tipping cascade” and ocean circulation severely impacted, as heat and water stress drive the forced mass migration of billions, with catastrophic mortality from disease, malnutrition and conflict.

As for the most optimistic outcome, that has a mere $1 trillion in annual losses and 80 million deaths, with the “occasional” global food crisis and widespread water crises - but there is no chance of that happening, as it assumes that global warming is kept below 1.5°C by 2050 with limited overshoot. We must stress that these are not cast-iron predictions, or the IFoA playing the role of a climate Nostradamus, but a range of plausible or realistic possibilities, given the very real facts on the ground right now.

Either way, the IFoA report should act as a clarion call. The working class has to be organised into mass communist parties and readied for power internationally. Protest politics have already met their limits. National roads are self-defeating. Sects, broad-left fronts and alliances worse than useless.

However, even if we could establish a World Union of Socialist States, say by 2050 - surely a best possible scenario - the Earth we shall be inheriting will be much impoverished. We can confidently look forward to rich, genuinely human relationships, flourishing arts and great advances in the sciences.

That said, some socialist measures might well be subject to delay, modification or rethink. Certainly it will be the task of many generations to restore the natural conditions, which we humans, being part of nature, depend upon for our existence.