When it comes to climate, the tail [risk] really is wagging the dog.
Why “tail risks” matter to your job, your investments, your pension and even your inheritance.
Recently a paper was published by people who study risk for a living — “Actuaries”. The paper, titled ‘Climate Scorpion — The Sting is in the Tail’, puts not only systemic economic solvency under the spotlight, but also the solvency of all systems on which we rely, what they call “planetary solvency”. That means that all of our efforts (individual as well as communal) to ensure a stable and predictable economic future, for ourselves, our families and our countries, whether through our jobs, investments, pensions or inheritance, will all be at risk.
The Scorpion’s Tail report raises the alarm about the urgent need to account for “tail risks” and what it could mean to each of us personally, as well as our economic system as a whole. There’s no spin here — our economy and civilization simply weren’t designed for the planet’s rate of rapid heating, and as “tail risk” events become more common (occuring every year or two), the system is starting to show its fragility. But what’s even more alarming is what is on the way. The next wave of extreme “tail risk” events, which are expected to be more massive and impactful than anything we’ve ever seen, are at…
