Business on the Edge 2024

2.3 Over 20 other Earth systems could be destabilized The demise of these five Earth systems will have a knock-on effect on over 20 others. For instance, three Earth systems become vulnerable to tipping at 1.5-2.0°C of 10-year average warming: boreal forests, mangroves and seagrass meadows, and the Amazon rainforest.39 Boreal forests Boreal forests form a ring around the North Pole, just south of the Arctic circle. As up to 80% of boreal forests are underlaid with permafrost,40 they are particularly prone to the effects of permafrost thaw, drought and fires. Boreal wildfires are also a driver of permafrost thaw.41 Some fires burn through the year. Known as “zombie fires” they emit carbon from boreal forests in the summer and go underground in winter, thawing permafrost.42 Mangroves and seagrass meadows Mangroves and seagrass meadows are breeding and nursery grounds for sea life. They trap organic matter, preventing its decomposition and allowing for the long-term storage of carbon in the ocean. Their health is compromised by rising ocean temperatures. In some regions, the health of their ecosystems is also dependent on coral reefs.43 Amazon rainforest Risks to Earth systems do not only come from higher temperatures. For example, the savannization of the Amazon rainforest is likely to be triggered by the compound impacts of both global heating and deforestation. As outlined above, the Amazon’s future is also contingent on the positioning of the tropical rain belt which could shift towards the equator due to disruption of the Atlantic Ocean’s circulation systems. 2.4 Economic models fail to encompass the full scope of Earth system tipping point risks Earth systems operate on a planetary scale and their degradation is unfolding at unprecedented rates. This makes it difficult to estimate precisely the full scope of shifts and their reverberating impacts.44 Some scientific models only account for temperature impacts, not volatility of temperatures or reinforcing impacts such as nature loss.45 Most models are not sufficiently able to incorporate the non-linear processes and existential shocks that are characteristic of Earth system tipping points.46 Many do not account for the latest peer-reviewed observational science, which reveals worrying trends that standard models fail to predict.47 Meanwhile, economic models often fail to accurately encompass the full scope of climate risks.48 They tend to focus primarily on the most likely climate scenarios and exclude significant parts of the economy from their estimates, thereby underestimating the potential for systemic shocks.49 This exclusion leads to a disconnect between the models and the real-world economic risks posed by Earth system tipping points.50 Despite the shortcomings in scientific and economic models, it is clear that impacts are likely to accelerate. This places additional responsibility on business leaders to move beyond rapid decarbonization. Successful business leaders will increasingly need to implement appropriate risk management and resilience strategies whilst investing in nature and the foresight tools that enable an evidence-based and real-time response to hazards as they emerge. Those ahead of the game will have a unique and long-lasting comparative advantage. As up to 80% of boreal forests are underlaid with permafrost, they are particularly prone to the effects of permafrost thaw, drought and fires. Many models do not account for the latest peer-reviewed observational science, which reveals worrying trends that standard models fail to predict. Business on the Edge: Building Industry Resilience to Climate Hazards 24