Our Planet: A Startup With No Business Plan

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The summary is stark: we are already operating outside acceptable risk parameters, with catastrophic impacts likely before 2050.

Climate: severe impacts already occurring, with highly likely catastrophic warming pre-2050. Nature: trending toward severe degradation with catastrophic risks by 2050. Society: moving from current geopolitical tensions toward possible severe fragmentation. Economy: limited impacts now, but 19% GDP loss projected by 2050, with catastrophic impacts possible.

The planetary solvency framework forces us to confront an uncomfortable question: if we're this bad at assessing and managing existential risks at a global scale, what other critical risks are we ignoring in our personal and professional lives?  

This is Heliox: Where Evidence Meets Empathy

Independent, moderated, timely, deep, gentle, clinical, global, and community conversations about things that matter.  Breathe Easy, we go deep and lightly surface the big ideas.

Thanks for listening today!

Four recurring narratives underlie every episode: boundary dissolution, adaptive complexity, embodied knowledge, and quantum-like uncertainty. These aren’t just philosophical musings but frameworks for understanding our modern world. 

We hope you continue exploring our other podcasts, responding to the content, and checking out our related articles on the Heliox Podcast on Substack. 

Transcript

0:25

This is Heliox, where evidence meets empathy. Independent, moderated, timely, deep, gentle, clinical, global, and community conversations about things that matter. Breathe easy. We go deep and lightly surface the big ideas. Welcome to the Deep Dive. We're here to unpack complex information, hopefully give you the clearest insights. Today, we're diving into a concept that's, well, arguably one of the most vital of our time. It impacts everything from the food on your plate to the very stability of our societies. It's called planetary solvency. That's right. And we're drawing our insights today from a, I think, quite groundbreaking report. It came out in January 2025. It's titled Planetary Solvency, Finding Our Balance with Nature. A collaborative effort, this one, by the Institute and Faculty of Actuaries. It's the IFOA and Exeter University, authored by Sandy Trust, Lucy Say, Oliver Bettis, and several others. Okay, so our mission for this deep dive, we want to understand what planetary solvency really means, why it's not just urgent but maybe critically overdue, and how these sort of rigorous risk management techniques, the kind usually used to safeguard trillions in financial systems, how they might be adapted to secure our planet's health, and, well, by extension, our own human prosperity. Think of this as your essential shortcut, grasping humanity's biggest risks and maybe some unexpected tools to navigate them. Okay, let's unpack this. Right, let's start with the big question then. What exactly is planetary solvency, and, you know, why is this concept emerging with such urgency right now? Well, at its core, planetary solvency is really about managing our human activities, managing them in a way that minimizes the risk of, let's say, catastrophic societal disruption. It's about recognizing that our continued well-being depends entirely on the critical support services we get from nature. Think of it like a pension fund, right? And it needs to be financially solvent to pay out benefits. Our planet, in the same way, needs to be solvent to keep providing the absolute essentials we all rely on. Okay, essentials. So what are those essentials? What are these support services specifically? Well, our society, our economy, they are fundamentally dependent on the Earth system for, well, everything, really. Food, fresh water, energy, raw materials, and crucially, climate regulation. The report calls these ecosystem services. And here's where it gets particularly stark, I think. They are non-substitutable. Non-substitutable, meaning? Meaning you can't just, you know, invent a new technology to replace a stable climate or a functioning water cycle once they've been disrupted beyond, well, beyond recovery. So our economic health, our existence even, it's completely intertwined with the health of the Earth system. But it sounds like, according to this report anyway, we're not exactly acing the management of that interdependence right now. No, that's putting it mildly. What's the uncomfortable truth the report lays bare? Precisely. The report highlights several critical and frankly quite alarming observations. First, human activity is pushing the Earth system towards instability. It's driving both climate change and widespread nature loss. And we're already seeing the consequences, aren't we? unprecedented fires, floods, heatways, droughts globally. If this continues unchecked, the report warns, we could face truly catastrophic outcomes. Things like losing the capacity to grow major staple crops or multimeter sea level rise. That immediately brings to mind the concept of tipping points. It's a term we hear a lot, but what does it really mean in this context? Yes, and it's perhaps the most critical warning in the report. We risk triggering major tipping points. Think about things like the irreversible melt of the Greenland ice sheet or the widespread collapse of coral reefs or maybe the dieback of the Amazon rainforest. Right. And this raises a really important and frankly terrifying question. What happens if these trigger each other? A domino effect. Exactly. The report uses chilling terms like a domino effect or a cascade. That could lead to unmanageable damage, potentially pushing us beyond a point of no return, where stabilizing the climate just becomes impossible. The core message is stark. The risk of planetary insolvency looms. And it sounds like the report suggests we've been, what was the phrase, hugely underestimating these risks. How so? Yes, it's a strong claim, but they back it up. The severity and frequency of extreme events are already, quote, unprecedented and beyond model projections. This isn't just, you know, an environmental concern anymore. It directly impacts human security. OK. We're talking about populations facing food system shocks, water insecurity, severe heat stress. The report's unvarnished truth is that, if unchecked, the likelihood of mass mortality, involuntary mass migration, severe economic contraction, and widespread conflict all become increasingly probable. Wow. And this report even takes aim at existing global climate goals, like the Paris Agreement. What's wrong with those frameworks, in their view? Well, their argument is that the Paris Agreement goals, they weren't really informed by a realistic, robust risk assessment. Consider this. The average global temperature for the last 12 months was already 1.5 degrees Celsius above pre-industrial levels. Already. Yes. And the rate of warming has actually accelerated. Breaching 1.5 degrees puts us at a much higher risk of triggering multiple climate tipping points. Plus, there's a significant time lag, meaning even if emissions stop today, right now, more warming is essentially in the pipeline. Right. Baked in. Exactly. Baked in. Yeah. They also suggest the Earth might be even more sensitive to greenhouse gases than our current models assume. And all this leads them to a pretty damning conclusion about current global risk management practices for policymakers. Basically, that they're fundamentally inadequate. What's the core problem they identify? The report argues that policymakers often rely maybe too heavily on economic models. Models that simply view climate and nature risks as externalities. Externalities, like side effects. Kind of. Something outside the core economic system. And this, they say, leads current climate change risk assessment methodologies to, quote, understate economic impact because they exclude many of the most severe risks that are expected and do not recognize there is a risk of ruin. Risk of ruin. Yes. And they famously put it this way. These methods are precisely wrong rather than being roughly right. Ouch. That reminds me of a really powerful analogy they use in the report, the one about the Titanic. It really drives home their point, doesn't it? It truly does. It's very effective. They say it's analogous to carrying out a risk assessment of the impact of the Titanic hitting an iceberg. But excluding from our model the possibility that the ship could sink, the shortage of lifeboats, and death from drowning or hypothermia. Right. You'd get a very misleading picture. Exactly. The modeled results, they warn, would be reassuring but dangerous. And the implication is stark. policymakers have likely accepted much higher levels of risk than is commonly realized without even fully knowing it. Okay. So if our current methods are failing us so spectacularly, what's the alternative? This report leans heavily on the world of actuaries, the people who assess risk for insurance for bench and fence. How can their techniques help us manage something as vast as global climate and nature risks? It's a fascinating conceptual leap, isn't it? Actuaries are professionals who deal with extreme risk and crucially deep uncertainty. They underpin global financial markets worth trillions. And their core approach is to ask not just what is likely, which is often what climate models focus on, but rather what is possible? And perhaps most critically, what do we want to avoid at all costs? That feels like a fundamental shift in perspective. In finance, they have this technique called reverse stress testing, right? How does that work? Exactly. In the financial world, reverse stress testing means you identify the scenarios that would cause a company to fail, to become insolvent. And then you work backward from that potential failure point to understand what measures you need to put in place now to avoid those outcomes. For an insurance company, for instance, they calculate how much capital they need to withstand something like a one in 200 year extreme loss scenario. A really rare, really bad event. Precisely. It means they operate with only a 0.5% chance of failure in any given year. That's a very, very low appetite for failure. Okay, so the radical idea here is we take that same rigorous logic, that low appetite for failure, and apply it to the Earth system itself, treating it like this vast, complex entity we need to keep solvent. Yes, that's the core proposal. We essentially replace the solvency of a financial institution with our shared objectives for humanity, things like the Paris Agreement goals or the UN Sustainable Development Goals, which collectively aim for all people enjoying peace and prosperity within what are called planetary boundaries. And the report's stark conclusion from applying this thinking is there's a clear risk of insolvency if we do not change course. It's really striking how the report differentiates between a purely scientific approach and this proposed risk management approach. Can you elaborate on that distinction? It feels important. It's a key insight, I agree. Science, while absolutely crucial, is often, by its nature, biased towards erring on the side of least drama. Meaning? Meaning scientists are naturally reluctant to make strong statements that aren't fully supported by conclusive published evidence. There's a high burden of proof. A risk management approach, however, it demands that we actively explore plausible, severe outcomes and, crucially, take action even when the evidence is incomplete by applying informed expert judgment. It's about being proactive based on risk, not just reactive based on proven harm. That makes sense. It raises an important question, though, about the decision makers themselves. What does the report say about the people in charge, the policymakers, steering us through these risks? The report stresses that policymakers are, well, de facto, planetary solvency managers, whether they see themselves that way or not. And it argues they absolutely need to have fundamental climate, ecological and risk literacy to make these incredibly complex decisions under conditions of deep uncertainty. It's really a call for a new kind of literacy, a new kind of leadership. OK, a new kind of leadership. And that seems to be clearly outlined in what the report calls the resilience framework. This sounds like their blueprint for action. What are these principles designed to achieve? The resilience principles, yes. They're designed as a roadmap, essentially, to make society genuinely resilient through effective and realistic global risk management practices. It's a holistic approach, really emphasizing that everything is interconnected. Right. And the acronym R-E-S-I-L-I-E-N-C-E stands for specific principles. This is the core of their proposed solution, isn't it? Let's walk through them. Absolutely. And maybe the first insight that underpins it all is crucial. It shows our economy rests on society and society rests on the Earth's system. You can't separate them. Okay. Interconnectedness. So the first R then for risk-led methodology. What does that demand from us? This isn't just about understanding the problem. It's about drawing a line in the sand, setting limits. It means setting clear, defined risk limits and using tools like a planetary solvency risk appetite. The explicit goal is to minimize climate, nature, and societal risks that undermine the ecosystem services upon which life on Earth depends. Okay. It's specifically about avoiding Earth system tipping points, avoiding habitat loss, breakdown of those crucial services, avoiding warming above 1.5 degrees, mass displacement, conflict, and what they call societal derailment risk. Just things falling apart. They even propose a risk impact likelihood matrix using some pretty chilling terms. Like what? Terms like systemic risk, extinction threat, societal collapse, global catastrophic threat, and even global decimation risk, which they define quite starkly as a loss of 10 percent or more of global population. Wow. OK, naming the stakes very clearly. It is. They're trying to prevent the truly worst outcomes. And that leads directly to the first E-Earth system primacy. This feels absolutely fundamental, especially given how economic metrics like GDP usually dominate our conversations. What's the shift in thinking here? It's a radical reordering, really. This principle emphasizes that while we monitor many metrics, economic ones are almost always prioritized, treated as the most important. However, the report stresses again and again that our society and economy fundamentally rest and rely on the Earth system. It aligns with that idea of the SDG wedding cake. You might have seen that visual where the economy and society are shown as embedded within the biosphere, not separate from it. Right. Not floating above it. Exactly. You can't have a thriving economy on a dying planet. It seems obvious, but our models often don't reflect that. That makes perfect sense. And the S then is for systemic risk assessment. Traditional risk management often looks at problems in isolation, right? But this sounds like recognizing the complex web we're actually in. Precisely. The Earth system, society, and the economy. They're not separate boxes. They form a highly interconnected, dynamic, complex system. This means impacts don't just add up neatly. They can cascade. They can compound. They can interact in unexpected ways. The report points to examples like how water scarcity can affect food security and energy security, which then can exacerbate social fragilities and conflict potential. All linked. It's all linked. And they highlight insufficient future planning and insufficient risk management as shared root causes behind many of these interconnected global risks. It's about seeing the whole complex picture. Okay, seeing the whole picture, that brings us neatly to the first eye, imaginative scenarios. This sounds like we need to be prepared for, well, the truly unthinkable. It's about actively forcing ourselves to examine the tail risks, those low likelihood but incredibly high severity events, things that might seem improbable but would be devastating if they occurred. It's about understanding the full range of possible adverse outcomes, even if we can't put precise probabilities on them, really asking how bad could this actually get? Which we tend not to do. Often not. The report notes that most climate models tend to focus on the lower, more manageable temperature scenarios, even though the probability of failing to meet our climate goals is actually quite high. For example, they point out that current net zero carbon budgets often only give something like a 50 percent heads or tails or less chance of limiting global warming to 1.5 degrees C. 50 percent. That sounds incredibly risky compared to how we manage other things. It is. Compare that 50% chance of failure to an insurance company's 0.5% appetite for failure. We're playing a much, much riskier game with the planet. That's a huge disparity. Okay, next up, the L for latest science. How does planetary solvency aim to bridge the gap between new scientific discoveries and actual policy? Because that gap can be huge. It can. And that's a major problem. There's often a significant time lag between cutting-edge scientific findings and their integration into global policies and methodologies. Sometimes years. Planetary solvency aims to synthesize these current scientific outputs much more quickly and crucially translate complex scientific metrics into a kind of risk currency language and framing that policymakers can easily understand and, more importantly, act upon. It's about closing that knowledge to action gap. Right, making it immediately relevant. And the second eye is about incentives to flag risks. It sounds like there's a structural problem with how risks are currently communicated maybe too cautiously. Yes, it directly addresses that tendency we discussed for scientists, quite understandably, to err on the side of least drama. The scientific process values caution and certainty. Risk management, however, needs to embrace the precautionary principle, acting with caution when significant harm is plausible, even with scientific uncertainty. You can't wait for absolute proof if the potential consequence is catastrophe. Their mantra here is, a best estimate is better than no estimate at all. Don't let the perfect be the enemy of the good, essentially. or perhaps don't let this search for certainty prevent timely action against plausible disaster. Okay, powerful point. Then we have E for educate stakeholders. Who needs this education most urgently, and what kind of critical blind spots are they identifying? Well, policymakers and leaders, first and foremost. They need to become profoundly ecologically and climate literate. It needs to be core competency. The report highlights a crucial security blind spot where our dominant economic theory often just, well, it fails to recognize energy, food, and other raw materials as factors of production in a fundamental way. How so? They're often treated as just inputs you can substitute rather than foundational requirements provided by the Earth system. For example, the report cites a study estimating a 45% chance of a collapse in key ocean current circulations, like the AMOC, that's the Atlantic Meridional Overturning Circulation. The Gulf Stream System, essentially. Broadly, yes. Possibly collapsing as early as 2040. Now, the potential impact of that. Significant reductions in the northern hemisphere in staple crop growing capability. Maybe more than half the suitable land for growing wheat and maids could be lost. That is staggering. A 45 percent chance. Yes. A stark example of a massive civilization altering risk that few policymakers seem truly prepared for or perhaps even aware of in these terms. That is truly unsettling. Okay, the end then is non-linearity and tipping points. This seems to be where the exponential risks, the really unpredictable stuff lies. Exactly. This principle means actively accounting for exponential risks and these unprecedented threshold events, the tipping points. Warming above 1.5 degrees C, they state, is extremely risky, with a significant chance of triggering multiple climate tipping points. And crucially, these can cascade interacting with each other, accelerating warming and impacts in ways that our linear models just can't capture well. And standard risk assessments miss this. Many high-profile risk assessments simply don't account for these non-linear cascading effects adequately, if at all. They give a striking example. the Amazon rainforest's tipping point, where it could flip from rainforest to savannah. This might occur around 3.5 degrees C warming just from climate change alone. But if you factor in ongoing deforestation exceeding 20-25%, that critical threshold could dramatically drop to just 1.5 degrees C of warming. So human activity is pushing us closer to these points, faster. Precisely. Making them much more likely much sooner. Okay. That brings us to C for collaborative across disciplines. So it's not just climate scientists who should be at the table for this kind of assessment. Absolutely not. Effective planetary risk assessment needs input from a much wider range of expertise, not just climate scientists, but also experts from defense, from intelligence communities, from the insurance sector, public health engineering, social sciences. It even suggests potentially separating the task of scientific information gathering from the task of risk assessment, similar to how intelligence agencies operate. Interesting. Get the data, then have diverse experts analyze the implications. Exactly. Bringing diverse expertise to analyze what the data actually means in terms of real-world risk. And finally, the last E, effective governance and reporting. Once you have this assessment, who should be receiving it and how? This is critical for impact. The report insists these planetary solvency assessments should report directly to the highest decision-making authorities. Think national security councils, cabinet-level committees, maybe even the UN Security Council. They need to receive this information on a regular, consistent basis. And crucially, the report suggests this reporting should ideally be done by an independent organization, free from short-term political influence, to ensure objectivity and, frankly, the necessary urgency. Okay, so that's the resilience framework, a comprehensive set of principles. But what does a planetary solvency assessment actually look like in practice? The report includes a fascinating illustrative dashboard. What does it tell us about our current situation right now? Right, the Planetary Solvency Summary Dashboard. It's designed to be concise, visual, and decision-useful for those high-level stakeholders. And its main kind of headline takeaway is quite alarming. It states that our overall position is now outside risk appetite. We are already in the danger zone. According to this assessment framework, yes. We are already operating outside the level of risk we should rationally be willing to accept. And what's the trajectory? Is it getting better or worse looking forward? Well, it shows that while risk impacts today are becoming severe, the trajectory is deeply concerning. It projects catastrophic to extreme impacts are likely or highly likely by 2050. This high likelihood, this probability, means we are well outside risk appetite. It's a very clear warning signal flashing red. Can you give us a quick snapshot of the different dimensions the dashboard assesses, climate, nature, society, economy? What does it project for each? Certainly. It provides a color-coded status and trajectory for each out to 2050. So for climate change, it's currently assessed as amber, meaning severe impacts are already being felt, billions and losses, thousands of deaths annually. But the trajectory arrow is stark red D, indicating highly likely catastrophic warming levels, 2 degrees C, experienced pre-2050. And that's before fully accounting for tipping points, which they note increased this risk exponentially. Okay, red trajectory for climate. What about nature? For nature, similarly, it's currently amber, trending towards severe. We're seeing increasing water stress, food system stresses. The trajectory here is also red D, meaning they assess catastrophic risks are at least likely by 2050 due to the ongoing relentless degradation of our natural system, biodiversity loss, soil degradation, etc. So climate and nature both heading towards red. What about society? When it comes to society, the dashboard shows it currently a yellow. We're experiencing impacts rated from limited to severe, primarily from things like geopolitical tension, active conflicts, existing inequalities. The trajectory here, though, is moving towards amber. This indicates a possible to likely risk of severe to decimation level societal impacts down the line. Why? Because those escalating climate and nature risks are expected to drive increased sociopolitical fragmentation, migration, conflict over resources. Interestingly for the economy, the report states limited economic impacts overall, globally speaking, in 2024. So currently yellow. But the trajectory is amber. They cite the latest estimates of climate impacts now forecast a 19 percent global GDP impact by 2050. And crucially, they state that decimation or catastrophic level economic impacts are now possible within that time frame. It's a very different, much starker economic picture than often presented. So putting it all together, what does this dashboard mean for us? It isn't saying we'll all face immediate doom tomorrow, but it's painting a clear picture of rapidly escalating systemic risk, isn't it? Exactly. The report is careful to clarify that assessment. A catastrophic level of warming does not mean there will be an immediate catastrophic economic shock or mortality event the day we cross some threshold. It's not necessarily a switch. However, it unequivocally states that as climate and nature risks intensify, increasingly severe societal impacts become more likely. The probability just keeps rising. The core urgent message from this whole assessment is crystal clear. Immediate policy action required to mitigate risks of catastrophic level or greater impacts this century and possibly well before 2050. It's really a call to arms for decision makers grounded in a rigorous risk framework. deep dive into planetary solvency, it really does reframe how we should think about our place in the world, doesn't it? It highlights that our entire global civilization operates within this incredibly delicate balance with nature. And that our current approaches to managing this relationship, well, they seem to be significantly underestimating the true risks involved. It's not just environmental policy over there, it's about applying the most rigorous, hard-nosed risk management principles, the kind we use for finance to secure our collective future. Absolutely. What's so compelling here, I think, is the clear call for policymakers, for leaders, to adopt a much more comprehensive, risk-informed approach. Moving beyond just viewing nature as some kind of externality or resource pool, and truly acknowledging our profound, non-negotiable interdependence with the Earth system. It really encourages you, the listener, to think about how risk is assessed and communicated in all sorts of different spheres of life, and maybe how critical thinking is just essential in a world that's overloaded with information and sometimes deliberate misdirection. So, yeah, what does this all mean for you? If planetary solvency is fundamentally about ensuring our collective stability by confronting these uncomfortable truths, maybe ask yourself, what uncomfortable possibilities are we, perhaps as individuals or in our communities or workplaces, inadvertently ignoring in our own lives? Possibilities that could actually be preventing us from building the kind of resilience we clearly need. Something to consider, perhaps, as you navigate your own complex world. Thanks for listening today. Four recurring narratives underlie every episode. Boundary dissolution, adaptive complexity, embodied knowledge, and quantum-like uncertainty. These aren't just philosophical musings, but frameworks for understanding our modern world. We hope you continue exploring our other podcasts, responding to the content, and checking out our related articles at helioxpodcast.substack.com.