Climate tipping points highlight that climate change could involve relatively sudden and substantial changes and that such changes might be irreversible on timescales relevant to human societies.
Even if there is robust information to show that a tipping point is plausible or expected, the probability of occurrence sought as an input into economic models is unlikely to be available. In this context, economic modelers and physical scientists need to be brought together to ensure robust knowledge is used effectively without over-interpretation of the data.
Key Messages
- The possibility of climate tipping points goes against widely held perceptions about threats of climate change being gradual and potentially reversible. Tipping points have the potential to cause huge economic shocks, including via cascading impacts through trade, migration, and conflict.
- New approaches to economic assessment are needed to capture understanding of risks related to climate tipping points. Existing approaches include physically based storylines, approaches in decision-making under uncertainty, and new proposals to explore model uncertainty.
- Our knowledge of uncertainty is part of our knowledge about climate change and needs to be more effectively connected between science and economics. Economic modeling needs to face the ambiguities in the physical science and adopt robust messaging across the combined economic/social/physical system.
- Research into climate tipping points includes three domains: (1) information about the likelihood of crossing a tipping point, (2) information about the consequences of crossing a tipping point, and (3) early warning systems (EWS) that indicate proximity to a tipping point.
Two intertwined tasks are to be tackled: first, a big-picture analysis of the risk and physical consequences of crossing climate tipping points, which allows for diverse academic perspectives on the uncertainties and conditionalities. Second, a similarly big-picture analysis of the economic assessments of tipping points and the consequences for global and national economies. Ministries of Finance should drive this work, as climate tipping points could fundamentally affect both the scale and distribution of the financial impacts of climate change.