Governments increasingly assess climate and nature risk through two approaches that often reach different conclusions. The first is security assessment, applying the same worst-case methods used for other national threats. From this perspective, climate and ecological change emerge as near-term, high-confidence threats to food, economic and national security. The second is quantitative economic modelling, which draws on historical relationships, stylized assumptions and cost–benefit reasoning to inform policy. It represents the economy as optimizable and frictionless, and is necessarily calibrated to what is currently known and computable. These two approaches were developed for different purposes and increasingly yield conflicting outputs, yet both are used to inform the same overarching decisions on fiscal risk, public spending, adaptation, food and security. Unfortunately, governments generally do not have a common framework for reconciling these approaches. As a result, policymakers are left with difficult-to-reconcile advice on how seriously to act, and what to spend, on climate risks.
Authors: Paul Behrens, Jesse F. Abrams, Hugh Montgomery, Richard Nugee, Nathalie Seddon, Sandy Trust.
