Insurance and Planetary Solvency: Recording & Summary - Sandy Trust HPAC
rob...@rtulip.net
Summary of Sandy Trust presentation is below. Temporary recording for upload to HPAC website is here. Slides attached.
Report on Sandy Trust’s Presentation to the Healthy Planet Action Coalition
Insurance, Planetary Solvency and Climate Risk
Introduction
Sandy Trust’s presentation to the Healthy Planet Action Coalition provided a stark actuarial and risk-management assessment of the climate crisis. Drawing on the Institute and Faculty of Actuaries’ work with Earth system scientists, including the reports Climate Scorpion, Planetary Solvency and Parasol Lost, Trust argued that current climate policy rests on assumptions that may be dangerously wrong.
The central claim was that the global response to climate change has been built around a promise: cut emissions, reach net zero, and stop warming at around 1.5°C. Trust challenged this as possibly the most consequential assumption now guiding humanity. If the Earth is more sensitive to greenhouse gases than mainstream scenarios assume, the world may already be on a path toward warming well beyond the Paris goals, with catastrophic implications for food, water, insurance, finance and social stability.
Climate change as a risk-management failure
Trust framed climate change primarily as a risk-management problem. His core criticism was not directed at climate scientists, for whom he expressed strong respect, but at the way scientific findings are translated into policy, economics and financial regulation.
He argued that science tends to communicate central estimates, uncertainty ranges and cautious conclusions. Risk management, by contrast, asks what the worst plausible outcomes are, how much risk society is willing to accept, and what must be done to avoid ruin. In areas such as aviation, defence and insurance solvency, society usually has a very low appetite for catastrophic failure. Climate policy, however, does not appear to apply the same standard.
Trust illustrated this with the example of not jumping into a North Australian river because there might be a crocodile. Even without certainty, people avoid the risk because the worst case is unacceptable. He argued that humanity is not applying that same common-sense precaution to climate change.
The problem of scientific reticence
A major theme was the gap between climate science and risk communication. Trust noted that the IPCC’s 2023 synthesis report does state that climate change is a threat to human wellbeing and planetary health, but only after many pages. In his view, this placement diminishes the seriousness of the warning.
He compared this to classic risk-management failures such as the Challenger shuttle disaster, where warnings existed but were not communicated or acted upon with sufficient force. The problem is compounded by scientific reticence, political pressure, misinformation, personal attacks on scientists and the consensus-driven character of IPCC reporting. The result is that policymakers, economists and financial institutions are often guided by softened average assessments rather than by serious examination of tail risks.
Climate sensitivity as a critical assumption
Trust identified climate sensitivity as one of the most important assumptions facing humanity. Equilibrium climate sensitivity refers to the eventual warming expected from a doubling of greenhouse gas concentrations. The IPCC central estimate is around 3°C, but Trust stressed that the upper end of the range may be more relevant for risk management.
He argued that there is increasing evidence that climate sensitivity may sit toward the high end of the IPCC range. If so, the world could pass 2°C much earlier than expected, even under relatively optimistic emissions scenarios. He emphasised that the world is already around 1.5°C above pre-industrial levels, greenhouse gases have almost doubled in CO₂-equivalent terms, and the rate of warming has increased.
The most striking evidence he presented was satellite data on Earth’s energy imbalance. He said that many climate models used in the IPCC process cannot reproduce what is actually being observed. In actuarial terms, this is an “experience analysis” problem: the model is being tested against observed reality and appears to be underestimating the scale of the risk.
The lost parasol: aerosol cooling
Trust discussed the idea of the “lost parasol” from Parasol Lost. Industrial aerosols, especially sulfate particles from pollution, have reflected sunlight and assisted cloud formation, thereby masking some greenhouse warming. This aerosol cooling has acted like an unintended sunshade.
As air pollution is reduced for health and environmental reasons, some of this cooling effect is removed. Trust argued that the world has effectively been conducting a vast aerosol experiment without acknowledging it as such. In this sense, humanity has already been altering planetary reflectivity, but in an unmanaged, accidental and harmful way.
This has major implications for carbon budgets. If aerosol cooling has been larger than commonly assumed, then greenhouse warming is also stronger than assumed, because the observed temperature is the net result of warming and cooling forces. Trust’s conclusion was that conventional carbon budgets may need to be written down to zero, in the same way that overvalued financial assets would be impaired.
Tipping points and planetary insolvency
The presentation placed strong emphasis on climate tipping points. Trust argued that the world is already entering a dangerous temperature range for coral reefs, Greenland ice, mountain glaciers, the Amazon rainforest and the Atlantic Meridional Overturning Circulation.
He highlighted the uncertainty around AMOC collapse, noting that some studies suggest collapse is centuries away while others suggest it could occur much sooner. His point was not that one precise forecast should be accepted, but that the range of plausible outcomes includes deeply dangerous possibilities. In risk-management terms, this uncertainty should increase urgency rather than justify delay.
The term “planetary insolvency” captures the idea that the Earth system may be moving outside the stable conditions required to support human civilisation, financial markets and insurable risks. Trust argued that if climate sensitivity is high, carbon budgets are exhausted and tipping risks are rising, the world is already in a state of planetary insolvency on the carbon dimension.
Critique of economic modelling
Trust was especially critical of economic modelling that assumes continued growth despite severe climate degradation. He cited central banks and regulators suggesting that even severe climate scenarios do not foresee a global economic recession. His objection was that such statements really mean “not in our models.”
He described a conversation with an economist who treated climate damage as a modest reduction in future growth rather than as a possible cause of economic decline. In that model, the economy might be 201% of today’s size rather than 210%, even after serious climate damage. Trust called this assumption untenable because it ignores the possibility that climate change could degrade the basic conditions that allow economic growth and human society to exist.
He compared this modelling failure to the global financial crisis, where models underestimated mortgage risk and failed to see systemic collapse. In his view, climate economics is repeating the same error on a much larger scale.
A planetary solvency recovery plan
Despite the severity of the warning, Trust argued that humanity still has agency. The required shift is from a narrow focus on decarbonisation to active, responsible and intentional stewardship of the Earth system.
He outlined several elements of a recovery plan.
First, society must stop doing obviously harmful things, especially continuing activities that accelerate warming and ecological degradation.
Second, methane reductions should be pursued urgently because methane is highly potent and relatively easier to reduce quickly than many other climate drivers.
Third, policy should be used much more aggressively to accelerate technological change. Trust cited Norway’s rapid uptake of electric vehicles as an example of how well-designed incentives can shift markets.
Fourth, nature must be treated as a strategic ally. Degraded carbon sinks and ecosystems need restoration, not merely protection in theory.
Fifth, some form of emergency climate stabilisation or technological intervention may become unavoidable if humanity wants to avoid tipping points. He suggested that “climate stabilisation” may be a more useful term than “geoengineering”, which carries heavy political and emotional baggage.
Implications for insurance
Trust then turned directly to insurance. He argued that the insurance sector is a canary in the coal mine for financial climate risk. Risk distributions are shifting quickly, and some regions are becoming difficult or impossible to insure. He referred to the emergence of “climate ghettos”: areas exposed to flood, wildfire or other risks where premiums rise sharply, insurers withdraw, or the state has to step in.
However, he also recognised the commercial logic from the insurer’s perspective. A rational, diversified insurance company may not see its own business model as failing. It may simply reprice or withdraw from risky locations in order to remain solvent and continue serving other customers.
This creates a serious social problem. The insurer may act rationally, but households may become trapped in properties they cannot insure or sell. Governments may have to intervene with public insurance schemes, subsidies or disaster relief. The wider economy may face growing zones of uninsurability and unbankability.
Trust noted that this is already a live issue in the United Kingdom, with discussion around climate mortgage prisoners, home-building policy and the role of government in maintaining insurability.
Key conclusions
The presentation advanced several major conclusions.
First, current climate policy may be based on a dangerously optimistic assumption about climate sensitivity and the adequacy of net zero pathways.
Second, the world is not applying normal risk-management standards to climate change. It is treating existential risk with less seriousness than much smaller risks in aviation, insurance or financial regulation.
Third, scientific caution, economic modelling and regulatory frameworks are collectively understating systemic climate risk.
Fourth, tipping points and nonlinear damages should be central to climate risk assessment, not marginal footnotes.
Fifth, the insurance sector is already seeing the early signs of climate instability through shifting risk distributions, rising premiums and emerging uninsurable zones.
Sixth, the financial sector needs to move from disclosure compliance to planetary solvency thinking.
Seventh, decarbonisation remains essential but is not sufficient. A broader Earth system stewardship agenda is required, including nature restoration, methane reduction, accelerated transition and serious consideration of emergency climate stabilisation.
Significance for HPAC
For the Healthy Planet Action Coalition, the presentation strongly supports the case for engaging the actuarial, insurance and financial regulatory communities. Trust’s framework provides a language of risk, solvency and systemic failure that can help move climate intervention from taboo into responsible assessment.
The presentation also strengthens the argument for an Albedo Accord. If the world is already losing aerosol cooling, if climate sensitivity may be high, and if near-term tipping risks are rising, then planetary rebrightening deserves serious evaluation as part of a broader climate stabilisation strategy.
However, Trust’s argument also implies that such a strategy must be framed carefully. It should not begin as a narrow technical pitch for geoengineering. It should begin with the failure of current climate risk models, the inadequacy of conventional financial scenarios, the need for planetary solvency and the responsibility to assess all serious options before the situation becomes an emergency.
Recommended follow-up actions
- Develop a concise briefing paper linking planetary solvency, insurance risk and albedo restoration.
- Engage actuaries as a priority audience, since actuarial practice is built around risk, solvency, tail events and public-interest obligations.
- Seek dialogue with insurance regulators, central banks and financial scenario designers on the inadequacy of current models.
- Frame albedo restoration as part of disciplined climate risk management rather than as a standalone technological fix.
- Build the concept of social licence and democratic legitimacy into any proposal for an Albedo Accord.
- Use insurance-sector examples such as uninsurable homes, climate mortgage prisoners and state-backed risk pools to show that systemic climate risk is already emerging.
- Develop scenario workshops that explore high climate sensitivity, aerosol cooling loss, tipping points, economic decline and emergency climate stabilisation options.
Conclusion
Sandy Trust’s presentation was a powerful warning that humanity is underestimating climate risk because it is not applying ordinary standards of prudence to planetary danger. The central message was that climate change should be treated as a systemic risk-management problem, not merely as an emissions accounting problem.
The implication is clear: climate policy must move beyond the comforting assumption that net zero will safely stabilise the planet. The world needs a planetary solvency recovery plan based on realistic risk assessment, rapid emissions and methane reduction, ecosystem restoration, accelerated transition and serious consideration of climate stabilisation measures.
For HPAC, the presentation offers both a warning and an opportunity. The warning is that time is short and current institutions are not yet facing the scale of the risk. The opportunity is that the insurance and actuarial communities may provide a credible pathway for reframing climate intervention as responsible planetary risk management.
Robert Tulip
https://healthyplanetaction.org/
From: rob...@rtulip.net <rob...@rtulip.net>
Sent: Thursday, 11 June 2026 11:37 PM
To: 'healthy-planet-...@googlegroups.com' <healthy-planet-...@googlegroups.com>; 'Planetary Restoration' <planetary-...@googlegroups.com>
Subject: Today; Insurance and Planetary Solvency - Sandy Trust HPAC Meeting 11 June 3.30 pm EDT
Mr Sandy Trust is a lead author of the series of four publications on insurance and climate issued by the UK Institute and Faculties of Actuaries with earth scientists from Exeter University.
Please join the Healthy Planet Action Coalition (HPAC) for a discussion with Sandy and colleagues on the findings and recommendations from these reports, with focus on how the insurance industry can best respond to global warming.
Date: Thursday 11 June
Time: 3.30 pm EDT = 8.30pm UK = 5.30am Friday AEDT
Link: https://us02web.zoom.us/j/88954851189?pwd=2OEdvleb4UpYfK4a950ryohFWcw93F.1
Note earlier than usual meeting time.
All welcome. The meeting will be recorded and published on the HPAC website.
Best Regards
Robert Tulip