Working with Wellington’s Climate Research Team, our Global Macro Team studies the macro, market, and geopolitical implications of climate change. We see climate change as a complex catastrophe in the making, with the potential to exacerbate geopolitical instability and multiply threats to economic and national security. Governments, including the US, China, and European Union, are beginning to treat climate change as a structural peril. Under the Biden administration, climate change has become integral to domestic and foreign policy narratives. Pentagon spending is shifting, with more contracts dedicated to climate-threatened US military infrastructure globally.
Domestically, the geopolitical downsides of climate inaction are so great that bipartisan policy agreement may be possible. Outside the US, Biden’s climate strategy could lead to cooperation and conflict. The stakes are high. FIGURE 1 shows the US Department of Defense’s (DoD’s) projections for global climate security threats under our current pathway of a 2°C temperature rise. Not given to hyperbole, the DoD identifies “catastrophic” situations in most regions.