Research project
Economic early-warning signals of accelerated climate change and earth-system tipping-points
- Start date: 1 June 2026
- End date: 31 May 2028
- Funder: UK Research and Innovation (UKRI)
- Principal investigator: Professor Iain Clacher
- Co-investigators: Dr Anubhav Choudhary, Leeds University Business School; Dr Helen Hughes, Leeds University Business School; Professor Jason Lowe, University of Leeds; Professor Richard Beardsworth, University of Leeds; Helen Roberts, Met Office; Dr Sarah Sparrow, University of Oxford.
- Partners: Aon UK Limited, JBA Risk Management, Maximum Information, Oak Global, and Oasis LMF.
Description
Temperatures globally have risen circa 1.35°C above pre-industrial levels, leading to climate impacts from hazards today that include flooding, drought, and extreme temperatures. Further global warming is already embedded in the climate system, leading to future climate impacts on people, infrastructure, and the economy.
Climate tipping-points are of increasing concern as the planet warms, although the precise trigger points remain unknown due to deep uncertainty in projections of future climate change impacts. Early warning is therefore critical to enable management of climate risks.
Insurance and reinsurance underpins the global economy. The growing risks of climate change, such as the increases in the frequency/severity of flooding, place insurance at the frontline of where climate impacts hit the real economy.
In response to the impacts of climate change in the present day, we have seen increasing premiums to manage the cost of losses and damages, and in extreme cases the withdrawal of coverage, for example - wildfire insurance in California. However, neither the insurance sector nor the economy or society is well adapted to present or future extremes of weather and climate.
Project overview
Our project will develop and test a novel early-warning system for accelerating climate change and tipping-points, which aims to inform policy and wider society that unmanageable levels of climate change, with different modalities of climate impacts, are approaching.
As part of this early-warning system development, we will produce multi-dimensional storylines to combine understanding on physical climate change, policy and regulatory changes linked to the net zero transition, and potential geopolitical impacts. These will be applicable to stress-testing in insurance, but with broader applications across finance as well as for government and other sectors aiming to adapt.
We will also generate new understanding of how the insurance sector will experience and respond to the climate and other dynamic stressors e.g. changes in regulation in response to climate change.
This project is funded by UK Research and Innovation (UKRI).