Planetary Insolvency: How the "Parasol Lost" Report Exposes the Great Divergence Between Economics and Climate Reality

Introduction

In the early months of 2026, the global financial and academic discourse experienced a seismic shift, a moment that future historians may well categorize as the definitive end of the "gradualist" era in climate economics. For decades, the dominant narrative within central banks, pension funds, and government treasuries was one of managed transition—a belief that climate change was an externality that could be priced, optimized, and smoothed over by the rational mechanisms of the market. This report, prepared for an academic and professional audience, synthesizes the findings of the groundbreaking Parasol Lost report by the Institute and Faculty of Actuaries (IFoA) and the University of Exeter, alongside a corpus of external research, to document the collapse of that narrative.¹

We find that the "Great Divergence" between economic models and physical reality has reached a breaking point. While mainstream Integrated Assessment Models (IAMs) continued to predict that catastrophic warming of 3°C or more would result in negligible impacts on Global Domestic Product (GDP), the physical Earth system began to demonstrate the terrifying non-linearities of a "termination shock".¹ This shock, driven by the unintended consequences of aerosol pollution reduction, has unmasked a level of climate sensitivity that threatens to render the "safe" pathways of the Paris Agreement obsolete.³

This article provides a deep-dive analysis of this epistemological crisis. We explore the "Green Scorpion" of nature-related financial risks, the physics of the "termination shock," and the looming threat of "Planetary Insolvency"—a state where the biophysical assets supporting civilization are liquidated. We conclude by outlining the necessary shift toward "Reverse Stress Testing" and a fiduciary duty grounded not in the optimization of growth, but in the stewardship of survival.⁴

1. Introduction: The Great Divergence of 2026

1.1 The View from the Precipice

By February 2026, the dissonance between the world of financial modeling and the world of physical observation had become deafening. On the surface, the machinery of global capitalism appeared to be functioning within normal parameters. Equity markets fluctuated on news of interest rates and tech innovations, and the "Green Economy" was heralded by headlines celebrating surges in solar capacity in China and renewable investments in the West.¹ Yet, beneath this veneer of business-as-usual, the foundational assumptions underpinning the valuation of every asset on Earth were crumbling.

The catalyst for this unraveling was the release of Parasol Lost, a report that did not merely critique economic models but dismantled their legitimacy entirely. The report, co-authored by actuaries and climate scientists, highlighted a "jarring disconnect" that had been allowed to fester for decades. On one side stood the neoclassical economists, whose models reassured policymakers that a world 3°C warmer—a temperature not seen since the Pliocene epoch—would merely shave a few percentage points off global economic growth, a hindrance comparable to a routine recession.¹ On the other side stood the Earth system scientists, who warned that such a temperature rise would likely collapse the Atlantic Meridional Overturning Circulation (AMOC), dry out the world’s breadbaskets, and render organized society untenable.⁶

This divergence is not a matter of differing academic opinions; it is a fiduciary crisis of existential proportions. If the physical scientists are correct, the global financial system is effectively "long" on a stable climate that no longer exists. Millions of pension pots, insurance contracts, and real estate portfolios are valued based on a future that is physically impossible. As Faith Ward, the Chief Responsible Investment Officer at Brunel Pension Partnership, noted upon the report's release, pension funds are exposed to "entire value chains," meaning they cannot diversify away from the systemic risk of planetary failure.⁸ The system is betting on a stability that the laws of physics are in the process of dismantling.

1.2 The Catalyst: Termination Shock

The urgency of 2026 is driven by more than just theoretical realizations; it is driven by physical acceleration. The Parasol Lost report identifies a phenomenon known as the "termination shock" as the immediate driver of the crisis. For the past century, the burning of fossil fuels has emitted not only greenhouse gases (GHGs) like carbon dioxide (CO₂) but also sulfur dioxide (SO₂) and other aerosols.³ These aerosols have acted as a "parasol," a global sunshade reflecting solar energy back into space and masking a significant portion of the warming caused by GHGs.

With the implementation of the International Maritime Organization’s (IMO) 2020 regulations, which mandated a drastic reduction in the sulfur content of shipping fuel, humanity effectively "folded the parasol".² The resulting spike in global temperatures, accelerating through 2023 and into 2026, has caught models that assumed linear progression completely off guard. We are now living through the unmasking of the true "climate sensitivity" of the planet, and the results suggest that the "safe" carbon budgets relied upon by governments and corporations may already be exhausted.⁷

2. Anatomy of a Delusion: The Flawed Economic Models

To understand how civilization sleepwalked into this crisis, we must perform a forensic audit of the tools that have guided climate policy for the past thirty years: the Integrated Assessment Models (IAMs). These complex computer simulations were designed to bridge the gap between climate science and economics, calculating the "Social Cost of Carbon" and the optimal path for decarbonization. Instead, they became instruments of delay, providing a "scientific" justification for inaction by systematically trivializing the costs of climate breakdown.

2.1 The Hegemony of the Quadratic Damage Function

At the heart of the failure lies a single, pervasive mathematical concept: the quadratic damage function. This equation, popularized by Nobel laureate William Nordhaus in his Dynamic Integrated Climate-Economy (DICE) model, attempts to translate a rise in global mean temperature into a percentage loss of GDP.¹ The function assumes that economic damages increase in proportion to the square of the temperature change. In descriptive terms, the model posits that if one degree of warming causes a small amount of damage, two degrees causes four times that amount, and three degrees causes nine times that amount.

While a quadratic progression appears to offer an accelerating curve of damages, the coefficients—the numbers effectively calibrating the severity of the impact—were set so low in many mainstream models that the resulting economic hits remained trivial even at catastrophic temperatures. For instance, standard interpretations of these models suggested that a 3°C to 4°C rise in global temperature would shave roughly 2% to 10% off global GDP.¹ To put this in perspective, the COVID-19 pandemic caused a global GDP contraction of approximately 3-4% in a single year. The models, therefore, imply that the permanent alteration of the biosphere, the melting of the ice sheets, and the desertification of major agricultural zones would have an economic impact roughly equivalent to two or three pandemics spread over a century.¹⁰

This trivialization allowed central bankers and pension trustees to view climate change as a "tail risk" rather than a central scenario. It fostered a culture of complacency where specific temperature targets, such as 2°C, were viewed as "optimal" trade-offs between mitigation costs and climate damages, rather than as physical thresholds of ruin.⁹

2.2 The Spatial vs. Temporal Fallacy

The calibration of these damage functions relied heavily on what critics, such as Professor Steve Keen, identify as a fundamental methodological error: the confusion of spatial (cross-sectional) data with temporal (time-series) processes.⁹ To estimate the impact of future warming, economists looked at the relationship between temperature and economic output in different regions of the world today.

For example, economists might observe that the GDP per capita in a warm region, such as Florida or Singapore, is comparable to that of a colder region, such as New York or London. From this spatial correlation, the model infers that temperature has a negligible impact on economic productivity. This logic is then applied to the future, assuming that as the global temperature rises, the economy will adapt as easily as a pensioner moving from New York to Florida.¹

This reasoning is physically illiterate. It ignores the fact that global warming is a temporal process involving the retention of massive amounts of energy within the Earth system. Raising the global average temperature by 3°C is not analogous to moving to a warmer climate; it is analogous to the difference between a stable climate and one driven by extreme energy imbalances. As Keen notes, assuming that because a controlled fire in a hearth is pleasant, burning down the house would be only marginally warmer, is a fatal category error.⁹ The spatial analogy fails to account for the destruction of the stable weather patterns—the Holocene stability—that allowed sedentary agriculture and complex civilization to evolve in the first place.

2.3 The Assumption of "Indoor" Immunity

A further flaw in the construction of these models was the assumption that economic activities taking place "indoors" are immune to climate change. In the enumeration methods used to calibrate early IAMs, sectors such as manufacturing, services, finance, and telecommunications—which make up the vast majority of GDP in developed nations—were often treated as having zero or near-zero climate sensitivity because they occur in temperature-controlled environments.¹²

This assumption ignores the systemic interconnectedness of the global economy. An investment bank in London may operate in an air-conditioned office, but its balance sheet depends on mortgage-backed securities in Florida, sovereign debt in the Global South, and supply chains that rely on agricultural stability. If the agricultural sector collapses due to heat stress or drought, the "indoor" economy does not continue to function in a vacuum; it faces a crisis of inflation, supply shortages, and civil unrest. The Green Scorpion report highlights that nature-related risks are not externalities but are embedded in the supply chains of every industry.¹³ The belief that the service sector can decouple from the biosphere is a delusion that defies the laws of thermodynamics.

2.4 Rational Expectations and the Denial of Panic

Finally, IAMs are built on the neoclassical foundation of "rational expectations." They assume that economic agents—households, corporations, and governments—have perfect information and will adapt optimally to changing signals.¹ The models presume that as sea levels rise, coastal cities will build sea walls of the exact necessary height at the exact right moment, and farmers will switch crops seamlessly as temperature bands shift.

This view excludes the friction of reality: political paralysis, capital constraints, the sunk costs of existing infrastructure, and the human tendency toward denial and panic. It treats the transition to a Hot House World as a smooth glide path, ignoring the possibility of "Minsky Moments"—sudden collapses in asset values when the market realizes that physical risks have been systematically underpriced.¹⁵ The Emperor's New Climate Scenarios report by the IFoA argues that this reliance on rational optimization has created a "planned complacency," where policymakers believe they can dial the global thermostat to an "optimal" level of warming, a concept that is biologically and physically absurd.¹¹

3. The 2026 Turning Point: Parasol Lost and the Termination Shock

While the theoretical critique of IAMs has been building for years, the physical reality of 2026 has forced the issue. The Parasol Lost report identifies a specific, immediate driver of the current crisis: the loss of aerosol cooling.¹ This phenomenon serves as a real-world test of climate sensitivity, and the results are alarming.

3.1 The Hidden Sunshade: Twomey and Albrecht Effects

For the past century, human industrial activity has had two contradictory effects on the climate. Greenhouse gases trap heat, warming the planet. Simultaneously, pollution in the form of sulfur dioxide (SO₂) and other aerosols has acted as a mirror, reflecting sunlight back into space and seeding bright clouds. This "global dimming" has masked a significant portion of the warming caused by greenhouse gases.

To understand the magnitude of this effect, we must look at the microphysics of clouds. Aerosols influence cloud properties through two primary mechanisms:

1. The Twomey Effect (Cloud Albedo): Aerosols act as Cloud Condensation Nuclei (CCN). When there are more aerosols, cloud water is distributed across a larger number of smaller droplets rather than fewer large ones. Smaller droplets have a greater collective surface area, making the cloud whiter and more reflective (a higher albedo). This reflects more solar radiation back into space, cooling the Earth.¹⁶

2. The Albrecht Effect (Cloud Lifetime): Smaller droplets are less likely to collide and coalesce into raindrops. This suppression of precipitation means that clouds persist for longer periods and cover larger areas, extending the duration of their cooling effect.¹⁶

The Parasol Lost report estimates that these mechanisms have been masking around 0.5°C of latent warming, effectively hiding the full impact of our carbon emissions.¹⁹

3.2 IMO 2020: An Inadvertent Geoengineering Experiment

The turning point came with the International Maritime Organization (IMO) 2020 regulations, which mandated a drastic reduction in the sulfur content of shipping fuel from 3.5% to 0.5%.³ While successful in reducing acid rain and respiratory illness, this policy had a massive, unintended climatic side effect. By removing sulfur from ship emissions, we effectively "folded the parasol" over the world's oceans.

The "ship tracks"—bright streaks of marine stratocumulus clouds that used to follow vessels—largely disappeared. These clouds had been reflecting sunlight over the darkest, most absorbent surfaces on Earth: the deep oceans. The Parasol Lost report describes this as a "termination shock"—a rapid unmasking of latent warming. The result has been a spike in global temperatures starting in 2023 and accelerating through 2026, catching models that ignored aerosol dynamics completely off guard.²

3.3 The Radiative Forcing Debate: Hansen vs. The Consensus

The magnitude of this shock is a subject of intense scientific debate, illustrating the high stakes of model uncertainty. Renowned climatologist James Hansen and colleagues have argued that standard climate models (GCMs) significantly underestimated the cooling power of aerosols. Consequently, these models also underestimated the climate's sensitivity to greenhouse gases (Equilibrium Climate Sensitivity, or ECS). Hansen posits that the removal of aerosols reveals the true "Faustian bargain" of fossil fuels, creating a radiative forcing (warming pressure) of over 1.0 Watts per square meter (W/m²).²¹

In contrast, other researchers using different models estimated a much smaller forcing from the IMO regulations, around 0.1 W/m².²¹ However, the Parasol Lost report aligns with the precautionary principle, warning that the empirical evidence of 2023-2026—where warming accelerated beyond the bounds of standard model predictions—suggests that the high-sensitivity hypothesis may be correct.⁷ If Hansen is right, the "termination shock" is not a blip; it is a permanent acceleration of global warming that brings forward tipping points by decades.

4. Planetary Insolvency: A Fiduciary Crisis

The IFoA reports introduce a new, chilling concept to the lexicon of risk management: Planetary Insolvency. This term reframes the climate crisis not as an environmental issue, but as a solvency crisis for the Earth system itself.¹

4.1 Defining the Insolvency of the Biosphere

In finance, insolvency occurs when liabilities exceed assets and an entity cannot meet its obligations. Planetary Insolvency is defined as the "risk of societal and economic collapse from the loss of nature's critical support systems".²⁴ The Earth provides "ecosystem services"—a stable climate, fresh water, pollination, soil fertility—that are the foundational assets of the global economy.

Human economic activity creates "liabilities" in the form of pollution, resource extraction, and biodiversity loss. For decades, we have been running a deficit, eroding the capital base of the planet. The Parasol Lost report argues that we are now approaching the point of bankruptcy. The "assets" (nature) are so degraded that they can no longer support the "liabilities" (human civilization). Unlike a financial bankruptcy, there is no "Planetary Chapter 11"; the collapse of the biosphere is irreversible.²⁵

4.2 The Planetary Solvency Dashboard

To manage this existential risk, the IFoA and the University of Exeter have proposed a Planetary Solvency Dashboard.⁷ This tool aims to visualize the state of the Earth's critical systems with the same rigor used for bank capital adequacy ratios.

Key metrics for this dashboard include:

• Earth's Heat Inventory: Monitoring the total energy imbalance (0.5 to 1.0 W/m² accumulation) to track the "fever" of the planet.²⁷

• Ice Sheet Mass Balance: Tracking the disintegration of Greenland and Antarctica as leading indicators of irreversible sea-level rise.⁴

• Ecosystem Integrity: Monitoring metrics such as pollinator health and forest cover to detect the onset of biological collapse.²⁵

The dashboard utilizes a "traffic light" system, where current trajectories are flashing red. The report urges policymakers to define a "Planetary Solvency risk appetite." Given that the cost of failure is the end of organized society, the risk appetite for breaching planetary boundaries should effectively be zero. This stands in stark contrast to current policies that accept a "50 percent chance" of staying below 1.5°C as acceptable.²⁸

4.3 The Parallel to the Global Financial Crisis

The authors draw a direct parallel between the current climate crisis and the Global Financial Crisis (GFC) of 2008.⁶ In 2008, financial models (like Value-at-Risk) failed because they relied on historical data from a period of stability ("The Great Moderation") and assumed that housing prices would never fall nationwide. They ignored the systemic accumulation of risk in the subprime market.

Similarly, today's IAMs are calibrated to the stable climate of the Holocene. They ignore the systemic accumulation of risk in the carbon cycle and the biosphere. Just as the "subprime" toxicity contaminated the entire banking system, the "carbon" toxicity is contaminating the entire economy. The difference is that while central banks could print money to bail out Lehman Brothers' creditors, they cannot print a new ozone layer or refreeze the Arctic.¹

5. The Physics of Collapse: Tipping Points and the "Green Scorpion"

The "flawed models" are dangerous because they blind us to specific physical mechanisms that could destroy the global economy. The IFoA reports highlight two specific metaphors for these risks: the collapsing "Parasol" and the stinging "Green Scorpion."

5.1 The Collapse of the AMOC: A Cold Shock in a Hot World

One of the most terrifying tipping points discussed is the potential collapse of the Atlantic Meridional Overturning Circulation (AMOC). The AMOC is a massive system of ocean currents, including the Gulf Stream, that transports warm water from the tropics to the North Atlantic, keeping Europe temperate.³¹

The Mechanism of Failure: The circulation is driven by the sinking of cold, salty water in the North Atlantic (deep water formation). However, as the Greenland Ice Sheet melts—accelerated by the loss of aerosol cooling—vast quantities of fresh water are dumped into the ocean. Fresh water is less dense than salt water and does not sink. This "freshwater hosing" creates a "lid" on the ocean, shutting down the conveyor belt.³¹

The Arable Land Crash: While the world warms, a collapse of the AMOC would ironically plunge the UK and Northwest Europe into a deep freeze. A pivotal study by Ritchie et al. (2020), cited in the context of this research, modeled the impact of such a collapse on UK agriculture. The study estimated that the combination of lower temperatures (drops of 3°C to 10°C) and widespread drying would cause the amount of arable land in Great Britain to plummet from roughly 32% to just 7%.³⁴

This implies the effective end of domestic food security for the UK. In a world already stressed by global food shortages, the inability of a major economy to feed itself would trigger a "cascading risk" scenario involving currency collapse and political instability. Standard economic models, which treat the AMOC as a constant, completely miss this structural annihilation.¹

5.2 The "Green Scorpion": The Sting of Nature Loss

While climate change is often the focus, the IFoA's Climate Scorpion report warns of the "Green Scorpion"—the risk of nature loss.³⁶ The metaphor suggests that nature loss is not a slow decline but a sudden, deadly strike—a "sting in the tail."

Transmission Channels:

The NGFS Green Scorpion technical document details how nature loss transmits to the financial system:

• Pollination Collapse: A decline in insect populations threatens approximately 75% of the world's food crops. This is not just an ecological tragedy; it is a supply shock for the agricultural sector that transmits inflation to consumers and default risk to banks holding agricultural debt.³⁸

• Supply Chain Disruption: Industries like semiconductor manufacturing are highly dependent on ultra-pure water. Ecosystem degradation that affects water quality or availability can halt production lines, sending shockwaves through the tech sector.¹⁴

The $5 Trillion Hit: Research cited in the reports estimates that nature-related feedbacks could generate economic losses in excess of $5 trillion.³³ These losses are driven by feedback loops where, for example, the dieback of the Amazon rainforest turns a carbon sink into a source, accelerating warming and causing further nature loss in a vicious cycle.⁴⁰

6. The "Emperor's New Scenarios": Regulatory Failure and Stranded Assets

The crisis of models extends to the regulators themselves. The Emperor's New Climate Scenarios report (2023) launched a blistering critique of the scenarios used by the Network for Greening the Financial System (NGFS), the body responsible for coordinating climate risk management for central banks.¹¹

6.1 The "Benign" Hot House

Regulators require banks and insurers to "stress test" their portfolios against different climate futures. However, the scenarios provided by the NGFS have been criticized as "artificially benign." Because they often rely on the same flawed IAMs discussed previously, they produce perverse outcomes. Some NGFS scenarios have paradoxically suggested that a "disorderly transition" (where we aggressively cut emissions) would be more expensive for investment portfolios than a "Hot House World" of 3°C+ warming.⁴¹

This leads to the dangerous conclusion that doing nothing is the safer financial bet. It creates a "herd mentality" where financial institutions, ticking regulatory boxes, collectively steer capital toward a cliff edge, confident in the map provided by regulators—a map that does not mark the cliff.¹¹

6.2 Stranded Assets and the "No Time to Lose" Scenarios

To counter this, the Universities Superannuation Scheme (USS) and the University of Exeter developed the No Time to Lose scenarios.¹⁵ Unlike the long-term, smooth curves of the NGFS, these scenarios introduce volatility, "Minsky Moments," and the concept of assets becoming stranded by physical reality rather than just policy.

In these realistic scenarios, assets become stranded not just because a government bans coal, but because physical conditions make them inoperable or uninsurable. A port that is underwater, or a farm that is in a permanent drought zone, is a stranded asset regardless of carbon pricing. The "Meltdown" scenario in this framework predicts severe GDP contraction, challenging the assumption of perpetual growth that underpins almost all standard models.⁴⁴

7. The Withdrawal of Insurance: The Canary in the Coal Mine

While economists debate coefficients, the insurance industry is voting with its feet. Insurance is the mechanism by which the economy prices risk. When risk becomes unpriceable, insurance vanishes.

7.1 The Retreat from Risk

The Parasol Lost report identifies the withdrawal of insurance as a key indicator of approaching Planetary Insolvency.²⁴ We are already witnessing major insurers pull out of markets like California (wildfire risk) and Florida (hurricane/flood risk).

This withdrawal creates a "protection gap"—the difference between total economic losses and insured losses. As this gap widens, the burden of disaster recovery shifts from the private sector to the state, eventually overwhelming sovereign balance sheets.⁴⁵

7.2 Systemic Implication for Banking

This is not just a problem for homeowners. The entire banking system is built on collateral (mostly real estate) that is assumed to be insurable. If a home cannot be insured, it technically cannot be mortgaged. The withdrawal of insurance threatens to trigger a devaluation of real estate assets that could dwarf the 2008 subprime crisis. It turns physical risk into credit risk overnight.¹

8. The Path Forward: Reverse Stress Testing and Stewardship

The diagnosis is grim, but the IFoA and Exeter reports offer a pathway to realism. The first step is to discard the broken compass of IAMs and adopt tools that respect the laws of physics.

8.1 Reverse Stress Testing

The reports recommend that financial institutions move from "predictive" modeling (which is impossible given the uncertainty) to Reverse Stress Testing (RST).⁵

The Method: Standard stress testing asks, "How much money will we lose if X happens?" RST inverts the inquiry: "What set of events would cause our business model (or society) to fail?".²⁵ For a pension fund, RST might identify that a 4°C warming scenario collapses the value of all asset classes simultaneously, leading to insolvency. For a government, RST might identify that an AMOC collapse renders the agricultural subsidy system insolvable.

The Benefit: This approach bypasses the need for precise probability forecasts. It forces executives to confront their vulnerabilities to specific, plausible scenarios (e.g., the collapse of the AMOC) and build resilience against them, rather than relying on a model that says the probability is low. It shifts the focus from "pricing risk" to "mitigating risk".³⁶

8.2 Implementing Planetary Solvency

The concept of Planetary Solvency must move from a report to policy. Governments and investors must adopt a mindset of "planetary stewardship." This means actively managing the Earth system as a critical asset, investing in restoration, and recognizing that there is no economy without a biosphere.⁴

This includes the "Planetary Solvency Recovery Plan" advocated by Sir David King and the Climate Crisis Advisory Group, which calls for:

1. Reduce: Rapid emissions cuts.

2. Remove: Large-scale carbon removal.

3. Repair: Interventions to stabilize the poles and oceans (potentially including research into solar radiation management to replace the lost "parasol").⁴⁷

9. Conclusion: The Reality Check

As of February 2026, the global economy stands at a precipice. The "flawed economic models" identified by the Guardian and the actuaries have acted as a blindfold, allowing us to walk toward the edge while telling us we are on flat ground.

The disconnect is fundamental:

• Economists say 3°C of warming costs 2% of GDP.

• Scientists say 3°C of warming may end organized society.

One of these groups is wrong. The laws of physics do not negotiate, they do not compromise, and they do not care about quarterly returns. The Parasol Lost report is a final warning that the debt to nature is coming due. The "termination shock" of aerosol loss is the margin call. We must abandon the comfortable delusion of the quadratic damage function and face the uncomfortable reality of the Green Scorpion.

The choice is no longer between "growth" and "green." It is between "Planetary Solvency"—a difficult, urgent transformation of our entire material relationship with the Earth—and "Planetary Insolvency," a default from which there is no bail-out. The parasol is lost. The storm is here. It is time to look at the sky, not the model.

Table 1: The Great Divergence - Mainstream Economic Models vs. Actuarial & Physical Science Reality

Feature	Mainstream Economic Models (IAMs like DICE)	Physical Science & Actuarial View (Parasol Lost/Exeter)
Damage Function	Quadratic: Damages rise smoothly and slowly. Assumes "New York to Florida" analogy (spatial fallacy).	Non-linear/Threshold: Damages jump at tipping points. Assumes "burning down the house" analogy (temporal reality).
3°C Impact	Predicts -2% to -10% loss of Global GDP. Viewed as "manageable."	Predicts potential societal collapse and "Planetary Insolvency." An uninsurable world.
Tipping Points	Largely excluded, averaged out, or treated as low probability tail risks.	Central to risk. AMOC collapse, Ice Sheet loss, and Amazon dieback are critical, proximate drivers.
Aerosols	Often ignored or treated as a constant background variable.	Crucial "Mask." Loss of aerosols (IMO 2020) leads to "Termination Shock" and accelerated warming.
Nature	Treated as an "externality" or separate from the core economy.	The foundation of the economy ("Green Scorpion"). Nature loss feeds back to cause >$5 trillion losses.
Risk Approach	Cost-Benefit Analysis: Attempts to "optimize" the level of warming against mitigation costs.	Precautionary Principle / Reverse Stress Testing: Focuses on avoiding "ruin" and ensuring survival.
Outcome	"Optimal" warming might be 3°C or more in some older model calibrations.	3°C is catastrophic; <2°C is a hard physical limit for stability.

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