Climate risks are a product of rising greenhouse-gas emissions caused by our dependence on fossil fuels, with these risks distributed unequally at a local level. What is local becomes a burden borne by those who face the greatest threats, often without access to a global safety net.

Those who have the privilege of improving their living standards have externalised and socialised many of the risks on to countries and populations that are the least resourced.

While extreme weather impacts on everyone – rich or poor – it disproportionately affects the most vulnerable, often pushing them further behind. Climate risks are as much about events as they are about the distribution of risks.

As climate risks increase, so too do insurance costs. Frequent events within the same geographic areas are making these places, people and assets uninsurable. While the overall costs of climate risks can be seen in aggregate terms, the individual costs remain obscured from public view.

This is the hidden law of climate risks: the cause is collective behaviour but the burden of harm falls on the voiceless individuals or households who are often unseen or unheard of. In most cases, they are mere statistics, victims whose struggles remain largely invisible. But we are beginning to see the contours of this reality in political discourse, especially in the aftermath of recent floods in Spain and Hurricane Helene and Hurricane Milton in the US.

Citizens are starting to ask whether enough is being done.

Even for a wealthy country such as the US, the impacts are disruptive – in terms of damage to homes and infrastructure as well as to lives and communities, let alone economic costs.

Insuring against risks is not just about reacting to events – it is also about the degree to which one can be proactive. Despite advances in AI, we are still not able to predict with absolute certainty.

In general, the unequal distribution of resilience capacity will influence both the ability to absorb risk and the capacity to recover. Resilience capacity is influenced by factors such as social cohesion, networks and the quality of available resources to address the immediate crisis and post-crisis recovery. These factors are deeply tied to local politics, resource allocation and governance.

Some communities are weakened by poor governance and corruption, which limit access by the public to State resources. Additionally, some countries face onerous debt burdens or sanctions that diminish the ability of the State and non-State actors to respond effectively. In these instances, fiscal health plays a significant role in determining a country’s ability to act on climate challenges.

Another type of climate-induced risk looms, one not related to extreme weather events but to people’s reaction to uncertainty and disruption. This risk emerges as we attempt to engineer large-scale, rapid technoeconomic shifts necessary to reduce emissions, raising questions about how society will cope with the scale and speed of these transformations.

This theme of transition risks is one that cannot be easily ignored and requires careful political management.

This is the paradox of climate risks: society is disrupted and harmed by climate effects, which in turn generate social and political momentum to take action, unless one subscribes to fatalism or climate denialism. However, taking action also means that society must absorb the pain of transitioning to a new energy system. This pain can be severe and, if it occurs at the wrong moment or without a cushion, it will not be widely embraced.

The response to such challenges can lead to negative social sentiment and tensions between different interest groups, which, in turn, influences political outcomes. These dynamics are further complicated when global aspirations are imposed on local populations and economies without their consent.

The reactions to such interventions can be severe, and negative sentiment can become contagious. This is what happened in South Africa when global and national elites proposed decommissioning coal plants, such as the Komati coal-fired power plant, which has been scheduled for decommissioning and repurposing since 2020.

The decommissioning of the coal-fired power plant became mired in tension as local communities opposed the approach, given how deeply intertwined social and economic life is with coal plants. The communities were not convinced that the proposed alternatives would provide the same stable jobs.

Unplugging a coal plant without a proper alternative being put in place is akin to unplugging a whole community and its way of life – especially if the alternative is precarious and does not offer a reliable source of income.

In the case of the Komati power plant, there is a clear need to go back to the drawing board and start the whole process afresh.

Creating a net-zero future and shifting to a different energy civilisation through the engineering of a technoeconomic shifts cannot account for all possible reactions to change. We are only beginning to understand the implications of these transactions as countries attempt to implement them through green deals and national platforms.

Global benefits from coal-free zones are not always perceived as local benefits. Global targets create ethical dilemmas and trade-offs at the local level, the costs of which, without global support, are borne by local economies.

These challenges unfold amid a broader poly-crisis of disease, poverty, inflation, wars, debt and other pressing issues.

This is why just transition propositions sometimes exist in a vacuum, disconnected from the broader context of the issues that nations, businesses and households face.

If we could find one solution that addresses multiple challenges simultaneously, it would be a miracle policy and economic instrument. But this, in reality, is an idealistic proposition.