Climate risks that are interconnected, multiplying and intensifying can cascade across natural and human systems. Tipping points or thresholds—at which a small change can trigger a move from one state to a different state far less conducive to human survival and prosperity—may trigger unforeseen chains of events.

This requires a systems approach to understand them. Yet apart from the 2022 Office of National Intelligence climate-security risk assessment—which is classified and apparently sidelined—there is no sign this understanding is permeating the Australian government’s work. In the Defence Strategic Review and the National Defence Strategy, for example, climate has been reduced to a cameo role, just visible in a far corner of the supposedly much bigger geopolitical screen.

Given that surveys of global leaders by organisations such as the World Economic Forum consistently rate climate and related impacts as the greatest global threat, it would be prudent for the government to adopt an appropriate framework for assessing these risks in line with risk-management best practices, taking into account the full range of outcomes, including tipping points.  This would include a focus on the ‘fat-tail’ risks and the plausible worst-case scenarios, including the actuarial ‘risk of ruin’, especially when the damages are so great that there is no second chance to learn from our mistakes.

These requirements and the systemic nature of the risk means governments must fundamentally rethink the approach to climate risk assessment and response, embracing complex risk analysis. Physical and economic climate models have fundamental limitations, so expert elicitation and scenario planning are crucial components in the analysis. The urgency of required action should explicitly be considered and articulated, with policy and project systems structured to respond at the speed required. And lack of certainty in risk assessment should not be taken as an excuse for inaction if risks are potentially catastrophic in nature.

A report released recently by the Australian Security Leaders Climate Group titled, ‘Too Hot To Handle’, underscores the urgency, highlighting a disturbing pattern of climate-security risk management failure.

For climate risk analysts, the past 12 months have been a wild ride, with extraordinary events taking place that are beyond scientific expectations—in some cases beyond model projections—and severe impacts arriving faster than was forecast for major elements of the climate system.

There is now consistent scientific evidence that the rate of warming has accelerated—from 0.2°C to 0.3°C per decade—with a good chance that 2024 will be as warm as the record-smashing 2023 at 1.5°C above pre-industrial levels. This means that, in practical terms, the world has reached the lower end of the warming limits established by the 2015 Paris Agreement.

Accelerated warming will likely continue for decades, driven by continuing high emissions, plans by major fossil fuel producers to expand production, the declining efficiency of parts of the climate system’s natural carbon storage mechanisms, and cleaner air policies reducing the level of sulfate aerosols, which have been masking some of the warming.

The eminent climatologist and former NASA science chief James Hansen says the world will likely reach 2°C above pre-industrial levels by 2040—well ahead of the outdated projections used by Australian government agencies, which continue to advise the government and its methodologically-challenged domestic National Climate Risk Assessment (NCRA) that warming by 2050 will be in the 1.5 to 2°C range.

This is one example of the government’s failing to understand the nature of current climate risks, with important consequences for Australia’s preparedness to face and mitigate climate-related security challenges.

United States Secretary of Defense Lloyd Austin—reflecting the views of many of the world’s most experienced scientists—recognises that climate risks are now existential and will result in major, irreversible harm if they are not rapidly addressed. According to mapping of potential threats, the greatest risk lies at the high-end (or ‘fat tail’) of the range of possible outcomes.

These should be given particular attention because many physical climate systems exhibit fast, non-linear change that is difficult to model or project and is often associated with tipping points.

The global failure to embrace complex risk analysis as part of a basic rethink of climate assessment and response is now glaringly obvious. Scientists have described a zone of heat at 2.7°C of warming—likely to be reached about 2060 on current indications—of near-unlivable conditions, which traditionally have been experienced on only 0.8% of the world’s surface, mainly in the Sahara. That zone (as illustrated above) will include Amazonia, the region around the Red Sea and the Persian Gulf, stretching to significant parts of South Asia, Southeast Asia especially Indonesia, and areas of northern Australia and Papua New Guinea. Yet by refusing to confront these implications, Australia seems hell-bent on walking into that furnace.

Once northern Australia reaches a state of near-unlivable conditions, partial depopulation is likely. The services and infrastructure on which civil society and the military depend—transport and logistics, utilities, health and social and education services for families—will degrade.  Yet $22 billion has just been allocated to upgrade northern bases with barely any recognition of this reality.

The impact of this extreme heat on rice yields, wider food production, water security and the functioning of societies—as well as the potential for conflict and state failure—in many of our key Indo-Pacific partners has not been articulated, nor taken into account in any of the government’s key defence and security initiatives. We are likely building security alliances with states that will collapse.

The possible breakdown of another key global climate system is also absent from security analysis. There is a non-trivial risk that the Atlantic Meridional Overturning Circulation, which transports heat from the Atlantic tropics to Northern Europe, keeping that part of the world relatively warm, will collapse this century. A July 2023 study estimated a ‘collapse of the AMOC to occur around mid-century under the current scenario of future emissions’, with a high confidence (95 percent probability) that it will happen between 2025 and 2095.

This would have devastating consequences for global food production, for sea levels and for flooding in Australia. Shifts in global weather patterns would likely deprive Asia of vital monsoon rains, with enormous security consequences for the region and for Australia.

A breakdown of this system would cause temperatures to plunge in Britain, Ireland and Scandinavia, with temperatures in parts of Europe dropping by 3°C each decade and sea levels rising by a metre on both sides of the North Atlantic, while the wet and dry seasons in the Amazon would flip and severely disrupt the rainforest’s ecosystem.

Peter Ditlevsen of the University of Copenhagen says that an AMOC collapse would be a going-out-of-business scenario for European agriculture. In addition, the monsoons that typically deliver rain to West Africa and South Asia would become unreliable, and huge swaths of Europe and Russia would be devastated by drought. As much as half of the world’s viable area for growing corn and wheat could dry out. ‘In simple terms [it] would be a combined food and water security crisis on a global scale.’

Yet in the government’s analysis of climate risks, no attention has been paid to a potential AMOC collapse. It does not get a mention in the DSR or NDS, or the first pass of the NCRA. No minister or member of either major party has even mentioned it in the current term of the federal Parliament.

One of the greatest climate-related threats to our future security appears completely absent from the government’s thinking. Today’s real challenges require far broader strategic thinking than is currently evident.

Great power rivalry and climate-induced migration are frequently discussed in discourse about the effects of climate change in the Pacific, but we must not forget the implications for human security. As Pacific Islanders are increasingly confronted by the realities of climate change, the preservation of cultural and gender security is central in the region’s approach to climate adaptation.

Rising sea levels, tropical cyclones and coastal erosion have in some cases threatened whole Pacific communities, including villages in the Solomon Islands, Fiji and the Carteret Islands. Pacific peoples have responded in many ways including through inter- and intra-state migration. Fiji last year introduced guidelines to assist the relocation of communities impacted by sudden-onset climate-induced disasters such as cyclones, and longer-term climate effects including droughts.

What has accentuated the phenomenon of climate-induced migration by Pacific Islanders are cascading and compounding climate risks. Not only do impacts from climate-amplified hazards like cyclones drive disasters in the moment, but they occur concurrently with and add to broader pressures facing communities—including food and economic insecurity.

For example, communities that are dependent on primary industries are highly vulnerable to climate change as seen in Tuvalu where fisheries contributed to 5% of the country’s GDP in 2014. Climate change has increased water temperatures in the tropical Pacific, leading to the migration of some tuna species. Reduced tuna stocks impact the economic livelihood of fishing communities and is a potential push factor for the relocation of Pacific citizens.

The threat of increased climate-induced migration in recent years has resulted in a range of security challenges. The World Bank estimated in 2021 that 216 million people may be displaced within their own countries by 2050.  In mainstream Western discourse especially, a securitised perspective of climate-induced migration has emerged reinforcing the association between migration and future threats to national security. The unintended consequence of this approach is to exacerbate fears of migrants as threats to social cohesion driving a border restrictive approach—well in advance of significant climate-related people movements taking place.

As Pacific Island countries grapple with the implementation of appropriate responses to climate change, great power competition has become salient within the region. Confronted by a range of developmental challenges, Pacific Island countries have turned to regional assistance in adapting to climate change. China’s footprint has increasingly grown in the Pacific through the provision of aid and technical assistance.

In response to China’s growing regional role, the US and its allies and partners are likewise increasing their influence in the region. Both the US and South Korea this year hosted summits with Pacific Island leaders, with discussions involving climate change. In November, Australia upgraded its bilateral relationship with Tuvalu through the Falepili Union treaty. Along with providing a mobility pathway for 280 Tuvaluans to study, work and live in Australia annually, the treaty effectively provides a veto over any possible security pact between China and Tuvalu.

This emphasis in Western discourse on geopolitical competition and the threat of climate-induced migration has marginalised the human security implications of climate change.

An alternative way of assessing climate risks for the Pacific is the concept of relational security, which foregrounds both the material and non-material impacts of climate change as a concern shared by many Pacific Islanders. For example, the term ‘vanua’ from the iTaukei (indigenous Fijian) culture highlights the way in which people are an extension of the land, and land an extension of the people. Relations to the environment, social bonds, spirituality and ancestors are key to indigenous Fijian identity and a motivation for some communities, such as those on Serua Island, to stay in place rather than opting to relocate.

The gendered dimension of climate change is likewise traditionally marginalised when it comes to understanding impacts in the Pacific. Many Pacific Island societies, which are patriarchal in nature, suffer from high rates of domestic violence compared to other societies. When the impacts of climate change are added to the equation, existing inequities and marginalisation due to gender are exacerbated. Research shows that during and after disasters Pacific women are at a greater risk of sexual and gender-based violence including rape, exploitation and assault. This often arises in instances of climate-induced displacement with overcrowding and unsafe living conditions in temporary accommodation leading to the increased exposure of women to harassment and violence (along with limited access to reproductive health services).

Vulnerabilities based on gender need to be considered in post-settlement situations including with respect to the impact of the Falepili Treaty. According to research done by Monash University, 33% of migrant and refugee women in Australia experienced some form of domestic and family violence. Pacific Islander women relocating due to climate change may easily become part of this abysmal statistic.

Ensuring that the impacts of climate change on human security, such as cultural and gender security, are appropriately considered is critical. COP28 in the United Arab Emirates, is an ideal opportunity for countries to engage multilaterally with these human security issues. The recognition of the complex dimensions of gendered impacts and cultural identity in the COP28 declaration on climate, relief, recovery and peace is welcome.

While the loss of cultural heritage due to climate-induced relocation can never be completely recovered, the provision of non-economic loss and damage is one way for large fossil fuel emitters such as Australia to jointly compensate Pacific Islanders. The early decision at COP28 to operationalise the loss & damages fund was very encouraging—though its success will depend on future investments that are proportionate to the significant gap developing countries face. The importance of loss and damage for the Pacific Island countries was highlighted in the Pacific Regional Framework on Climate Mobility released after this year’s Pacific Island Forum.

Discussions at COP28 should consider ways a gender-sensitive approach can be mainstreamed in the Pacific’s response to climate change. Understanding the impact of climate-induced disasters on women and girls, including the increased incidence of sexual and gender-based violence, needs more attention and research. That is key to ensuring women are not merely positioned as passive victims in climate-induced disasters. Community-led policies relating to climate relocation which acknowledge the part played by women need to be prioritised. In the aftermath of Cyclone Pam in 2015, ni-Vanuatu women played a critical role in collectivising, leadership, and as entrepreneurs and innovators.

As climate change increasingly impacts the Pacific Island countries, the consequences for both traditional and human security need to be addressed. COP28 is an ideal opportunity to discuss human security considerations relating to climate change in the Pacific, with the preservation of gender and cultural security much-needed areas of focus.

It’s not surprising that climate change featured so prominently in the Australian federal election given the recent record-setting extreme weather that has buffeted the country and warnings from scientists that these events will become more frequent and destructive as the planet continues to warm.

Ultimately, the public’s alarm did not lead to victory for Bill Shorten and Labor. Indeed, Queenslanders, worried about preserving jobs in the coal sector, contributed to his defeat. There is, nevertheless, reason for cautious optimism that we can meet this global challenge faster than either of the major parties may realise.

We may be close to reaching three ‘tipping points’ that will help turn the tide of climate change. Two of them—the renewable energy revolution and the unprecedented level of global public concern about climate change—have received considerable media attention. But a third, the greening of the global financial sector, is greatly underappreciated, although it will ultimately unlock unprecedented investment in low-carbon development and climate resilience.

Influential institutions and actors across the global financial sector are increasingly moving from treating climate change as a public relations matter to seeing it as a core business risk (and opportunity). The work of the Task Force on Climate-related Financial Disclosures is rapidly gaining traction. The voluntary disclosure of material climate-related risks promoted by the task force is now supported by three-quarters of the world’s globally systemic banks, eight of the top 10 global asset managers, the world’s leading pension funds and insurers, major credit-rating agencies, and the big four accounting and consulting firms. Together these institutions manage almost US$110 trillion in assets.

The voluntary reporting addresses two categories of climate risk: physical and transitional. The former concerns financial losses resulting from the sudden-onset hazards that climate change is amplifying (such as wildfires, drought, floods, storms and heatwaves) and from progressively intensifying hazards (such as sea-level rise, changes in rainfall patterns and increasing temperatures). The latter concerns the risks to the financial system, and to specific sectors and investments, associated with the transition to a low-carbon economy.

A vivid demonstration of physical risk unfolded earlier this year when the utility giant Pacific Gas & Electric was forced to declare bankruptcy in the wake of the devastating bushfires that struck Northern California. Mark Carney, the governor of the Bank of England, described this as ‘the first major corporate casualty of climate change’.

Ultimately, the voluntary reporting is likely to become mandatory and the methodology underpinning it more rigorous. As it does, it will unlock enormous amounts of capital that can be redirected from high-carbon to low-carbon assets and shifted away from assets that are exposed to financial losses from extreme weather.

Sophisticated analysis by the world’s largest asset manager, Blackrock, is already detecting major climate-change impacts on the value of investments, including evidence that the most climate-resilient utilities trade at a premium. The company is advising its investors that this premium will increase over time as climate-change risks and dangers compound.

Tools are being developed to help markets and managers make climate-smart investments. Global Infrastructure Basel, for example, is developing a standard for sustainable and resilient infrastructure which will support the development of a resilient asset class that demonstrates higher performance relative to other portfolios. Credit-rating agencies, such as Moody’s, are factoring climate shocks into their analysis of municipal bond issuers’ economies, fiscal position and capital infrastructure, as well as managers’ ability to marshal resources and implement strategies to drive recovery. They are also developing a carbon transition assessment, which measures how well companies will be able to operate in a low-carbon economy.

Australia is a part of many of these global initiatives and is initiating homegrown ones. Guy Debelle, the deputy governor of the Reserve Bank of Australia, warned earlier this year that climate change is increasing the likelihood of non-linear impacts on the economy, with implications for financial stability. The RBA is now working through the challenge of incorporating climate change in the economic models and frameworks that inform Australia’s monetary policy.

Australian insurers, such as IAG, are moving equities holdings away from companies with the highest exposure to, and poor strategies to manage, climate-related risks. The Australian Business Roundtable for Disaster Resilience and Safer Communities, which includes leaders representing a cross-section of the Australian economy, is this year launching a new strategy focusing on partnering with government to build the private sector’s, and the broader community’s, resilience to climate and disaster risk.

The greening of the financial sector, together with the rapidly diminishing cost of renewable energy and growing public demand for climate action, will increasingly have a transformative impact. But it will still not be enough to meet the climate challenge without a fourth tipping point: ambitious government action. As Carney recently observed: ‘Financial policymakers [alone] will not drive the transition to a low-carbon economy. Governments will establish the climate policy frameworks, and the private sector will make the necessary investments.’

This is now a pivotal challenge for the Morrison government. Australia is hugely exposed to both physical and transitional risks. Climate-change-amplified natural disasters are already exacting an enormous social and economic toll and our economy is heavily invested in fossil fuels (we are the world’s largest exporter of coal, valued at $67 billion).

Addressing these risks will require strong leadership and a sustained commitment not just by this government, but also by future governments. The longer it takes to lift the policy ambition, the more costly it will be—both in the narrow economic sense and in terms of lost lives and livelihoods.