The Parasol Lost report warns that global temperatures are accelerating faster than predicted, driven by a loss of ‘aerosol cooling’, a hidden sunshade effect created by air pollution which has offset around 0.5°C of warming. This hidden sunshade is now receding as pollution is being cut down, particularly by shipping regulations. The report warns that, without action, global warming is now likely to reach 2°C before 2050, a level associated with catastrophic impacts on societies and economies worldwide, with major disruption to water and food systems, migration, and human health.  

This raises the risk of climate-driven inflation, financial shocks, and the withdrawal of insurance from high-risk areas much sooner than many expect which, in turn, increases the chance of widespread financial instability and ‘Planetary Insolvency’ – the risk of societal and economic collapse from the loss of nature’s critical support systems. 

The report – from the Institute and Faculty of Actuaries and University of Exeter – also draws attention to a legacy of economic modelling that has downplayed the impact of climate change on economies, leading to complacency and delays in policy change.