What happens when a nation takes the wrong course on risk and resilience, and its subsidies, energy, and infrastructure are designed to follow obsolete standards, and its public institutions stop preparing for the real-world threats facing its people? The first thing is its fiscal resilience outlook suffers. Fiscal resilience is a multidimensional metric tracking overlapping and compounding forces that create or destroy value.
A nation that reduces its investment in future-proof technologies, industries, and infrastructure, also increases the costs that will flow from shock events and complicated disruptions. This mathematical reality cannot be altered or erased by ideological restrictions on free flow of ideas or access to scientific information. In fact, those actions only exacerbate the problem of complex, hidden cost, that will eventually overwhelm such a society.
In the decade 1980-1989, the United States spent about $220 billion on disasters costing $1 billion or more, in today’s money. From September 2024 through January 2025, the United States experienced two disasters—Hurricane Helene and the Los Angeles fires—that are estimated to cost $250 billion each, over time. If we treat those two disasters as the cost of one year, and exclude all other disasters, then the rate of disaster-related spending has gone from $22 billion to $500 billion per year—a 23-fold increase in just four decades. If we add in other disasters, then the annual disaster expenditure from extreme events in 2024 and 2025 will be 40 times what it was in the 1980s.
Hard as it may be to imagine, this will only get worse. $500 billion is more than 1.5% of all US economic output. That money needs to be pulled from elsewhere to fund disaster response. Fiscal resilience questions hinge on the fact that unplanned excess spending reduces resources for future investment, which reduces both preparedness and opportunity, and degrades the efficiency of all economic activity going forward.
What does getting worse look like? It’s not just about raw numbers. Insurers are having a harder time finding profitable ways to provide certain kinds of coverage in areas vulnerable to climate impacts. California’s fire and drought-prone areas, for instance, or low-lying areas prone to flooding in Texas and Florida. As insurers pull back from issing policies, everyday business activities suffer. It gets harder to run small businesses, harder to sell homes, harder to raise property taxes and fund local services.
Insurers are signaling, with their complex predictive math, that things are going to get much more challenging than we are prepared for. If we were prepared, they would find a way to thread the needle and offer policies that make economic sense. When they can’t, it is because the risk of catastrophic losses is greater than the ability of the policy, economic, and financial systems to respond.
This is where we have to think seriously about nonlinear, compounding risks. Increasingly, nature loss, global heating, and related effects, like the depletion of fresh water resources or disruption of precipitation patterns, is putting the long-term sustainability of our food system at risk. Relatively small changes in food prices (just 3% to 5%) can cause massive disruption of local economies and of national political dynamics. The popular revolutions of the Arab Spring started because of food price spikes.
But we are not just talking about prices. Food system failure is not a question of food becoming more expensive; it is a question of it becoming scarce. As rich as it is, the United States has not adequately solved the problem of chronic endemic poverty in some regions that it would not experience major disruptions, and possibly civil unrest or even armed conflict, if food supplies became inaccessible to millions of people.
To eliminate climate data, for the temporary perceived legal or market convenience of a few overexposed companies, is to undermine the nation’s ability to plan efficiently and invest effectively for a better future. To eliminate programs that specifically address climate resilience challenges—both in urban environments and across agricultural lands—is to undermine the nation’s ability to achieve active climate resilience in everyday activities.
The COVID-19 pandemic could have been a non-event, had international cooperation worked as intended. Authorities in the first affected countries would have immediately reported the danger and coordinated containment and suppression efforts would have stopped the spread within a few weeks, and most of the world would never have had contact with the virus. Once it spread globally, it became necessary for all countries and localities to take the actions necessary to prevent the onset of a multi-year pandemic. With that much room for error, there was little hope of truly containing the virus.
In the case of COVID-19, tens of millions of lives were spared both by efforts that slowed the spread and by vaccines that made it possible to suppress the virus and greatly reduce the incidence of severe cases and death. The experience is an important one, however, for thinking through what it means to be climate resilient.
The communities that have experienced shock climate impacts know it can take years, or even decades to recover. 20 years after Hurricane Katrina, much of the population of New Orleans has never returned. When your choice is between staying somewhere that is barely functional, where rebuilding could take years, or leaving to start a new life somewhere else, you cannot avoid disruption. The event has imposed its full force on your life, and your opportunities are narrowed to those that allow you to either stand strong in the place you want to be or to leave in search of something better.
A national or regional food system failure would subject more than 10% of the population to catastrophic disruption and emergency conditions. Emergency meaning: Just a few days without help could lead to death and chaos. The circle of impact will then grow beyond the 10-20% of the population directly impacted and needing emergency assistance.
10% of the U.S. population is 35 million people. Only one state—California—has a population larger than that. If the circle of impact from a food system failure spreads to 20%, that is 70 million people. Such an emergency would cause deeper and costlier disruption of American life than any before, including COVID.
If a nation stops trying to develop sustainably and achieve active climate resilience, such deep disruptions will happen, and fiscal resources will be depleted. That will affect all other areas of public investment, including infrastructure, services, pensions, and national defense. As reported by the Commodity Futures Trading Commission in 2020 and the Financial Stability Oversight Council in 2021, the financial and banking system could collapse in such a circumstance.
So, there is no sound economic path to avoiding climate responsibility. There is no sound geopolitical path to make climate isolationism a strategy for future security or prosperity. When a nation stops trying to achieve sustainable human development and active climate resilience, it starts a perilous slide into preventable cost and potentially intractable decline.
To avoid that decline, all nations should increase production of climate data and mainstream the application of climate resilience insights, while shifting subsidies to support the climate resilient economy of the future and investing to reduce risk and build resilience.
