The global economy cannot outrun climate change, so neither can our investments

This interview between Rob de Laet and leading illuminem voice Praveen Gupta explores the risks posed by major climate tipping points, the role of ecosystem restoration in stabilising the climate, and how restoring forests, water cycles, and biodiversity could help strengthen the resilience of the Amazon and the wider biosphere.

Rob de Laet is a philosopher, climate activist, and co-author of Cooling the Climate: How to Revive the Biosphere and Cool the Earth Within 20 Years. His work focuses on ecosystem restoration, climate regulation, and the role of natural water cycles in maintaining a stable biosphere.

He is a principal member of the EcoRestoration Alliance and a fellow of the Global Evergreening Alliance. Together with Peter Bunyard and others, he is developing the Cooling the Climate project, which examines how the restoration of forests, water cycles, and other natural systems could contribute to addressing climate change. He is also involved in restoring a degraded area of the Brazilian rainforest, with a particular focus on the Amazon and the biotic pump.

His work places particular emphasis on the risks associated with Amazon rainforest dieback, declining ocean biology, and Arctic sea-ice loss. To support forest protection and regeneration at scale, he has also developed ARARA, a digital-financial platform designed to channel resources towards ecosystem restoration.

Praveen Gupta (PG): Earth's air conditioners are breaking down?

Rob de Laet (RDL): They are, and the phrase is close to literal rather than metaphorical. A large tree in a tropical forest transpires hundreds of litres of water a day, and the cooling that produces is roughly equivalent to several household air conditioners running continuously. Multiply that across a forest and you have a natural cooling mechanism of enormous capacity, running on sunlight and available water.

We have destroyed a large part of that capacity. Our own analysis puts ecosystem degradation at somewhere between 23 and 38 percent of total human forcing on the climate, and there are around two billion hectares of degraded land where that capacity could be rebuilt. More than half of that is in the tropics. Clearing a tropical hectare reduced that cooling capacity dramatically (the cooling goes down by roughly forty watts per square metre).

Set that against the global 2.72 watts per square metre of total human forcing and you see the scale of what is being left out of the accounts. The result shows up as hotter surfaces, disrupted rainfall and expanding heat domes. The tropics hold well over half the restorable land and close to four fifths of the cooling that restoring it would recover. A hectare restored in India or Indonesia or Brazil does roughly ten times the climate work of a hectare restored in Finland.

What makes this more than a nice image is that the loss is both huge and quantifiable. That is not a footnote to the carbon story. It is a comparable term, and it is the only part of the problem that can be reversed upward on a decadal timescale rather than a centennial one, which goes for CO2. So the question is not whether the air conditioning is failing. It is whether we are going to keep pretending the building only has a heating problem through GHGs or also a cooling problem through the breakdown of ecosystems, particularly in the tropics.

PG: Cloud formation, evapotranspiration and biological aerosol production are fast-acting climate levers that carbon accounting simply cannot see. Would you please explain?

RDL: Carbon accounting measures a stock: how many tonnes are stored in wood and soil. However, these three are flows. They are things a living landscape does every day, and a stock-based instrument is structurally incapable of seeing them.

Look at the energy involved. Carbon stored in the biomass of a tropical hectare is worth roughly half a watt per square metre of avoided forcing. The evaporation happening on that same hectare moves about eighty watts per square metre off the surface. The sunlight its canopy and the clouds above it reflect is worth about a hundred. We are pricing the smallest number in the stack, and we are pricing the slowest one.

Each of the three works differently. Evapotranspiration converts heat into water vapour and carries it upward. Some of that heat is released above most of the greenhouse layer and radiates to space, which is a genuine planetary loss rather than a local rearrangement. Satellite data calculations by Ali Bin Shahid this year puts that fraction at between 13 and 21 percent, which is the first observational constraint we have on it.

Biological aerosols are the strangest of the three. Forests emit volatile compounds, spores and bacteria that act as the nuclei clouds condense around. Forests are, in a real sense, seeding their own weather. And clouds are the most powerful shortwave lever on the planet, because a cloud returns sunlight to space before it ever becomes heat.

None of this is exotic physics. It is the standard surface energy balance. It is simply not in the accounts.

PG: Biophysical cooling from ecosystem restoration is at least 3 times carbon sequestration on the critical 10 to 20 year timescale, with restored ground cover delivering 2 to 4 °C of local surface cooling in hot areas or hot months?

RDL: The multiplier is right, and I should say up front that it is our own number. We took the biophysical cooling from restoring two billion hectares, compared it with the carbon those same hectares would store over ten to twenty years, and the cooling came out two to four times larger. The physics is standard. What was new is that nobody had put the two side by side.

Here is the simplest way to see why. Carbon is a bank deposit. A young tree puts a little away each year, and after twenty years there is a useful sum. Cooling is a machine that is running now. The moment the leaves are there, they are pumping water into the air and pushing heat off the surface. Over ten or twenty years, which is the window that actually matters to us, the machine has done far more work than the deposit has accumulated. That is the whole gap.

The 2 to 4 degrees is the difference between a standing tropical forest and the bare ground next to it. It belongs to a canopy that has closed over. Ground cover, mulch and soil work do cool, and they cool within a season, but by less. Peak temperature differences can even be larger.

That distinction matters, and not only to scientists. If you protect forest that is already standing, you keep the full 2 to 4 degrees till you cut it. This is extremely valuable natural climate infrastructure. If you replant you get the effect again after new canopy grows, and that takes ten to twenty years in the tropics and longer in cooler places. That is why we need a 100% moratorium on remaining old growth forests NOW!

Planting matters enormously. It is just the second thing you do, not the first.

PG: The best course of protecting assets from stranding is to upgrade the planet?

RDL: The stranded asset conversation has been almost entirely about coal and oil reserves, and that framing is far too narrow. Every financial asset is ultimately a claim on a functioning biosphere. A mortgage assumes the house stays insurable. A sovereign bond assumes the country can feed itself. A food company's valuation assumes the rain arrives roughly when it used to.

PwC put a number on that in 2023: 55 percent of world GDP, around 58 trillion dollars, is moderately or highly dependent on nature. They also found that more than half the market value of listed companies across nineteen major stock exchanges is exposed to material nature risk. That is not a sector. That is the market.

What makes this concrete rather than theoretical is that the largest investor in the world has now said it in its own disclosures. Norway's sovereign wealth fund publishes a climate and nature report every year. Three things in the 2024 edition are worth knowing.

First, they ran two different models on the same portfolio and got answers ten times apart. Their bottom-up model said physical climate risk would cost their US equities about 2 percent of present value. Their own top-down model said 19 percent, and 27 percent at the tail. They state plainly that they believe the higher number is the more credible one.

Second, and this is the part that matters most to me, they list what neither model includes. Tipping points. Cascading effects. Feedback loops between the climate and the carbon cycle. And, in their own words, climate impacts on natural resources and ecosystem services. The world's largest fund is telling you, in a published document, that the collapse of the systems we are talking about is simply absent from its risk models.

Third, they tested one small piece of it. They modelled what happens if just three ecosystem services fail by 2030: wild pollinators, timber, and marine fisheries. Three, out of dozens. The answer was about 2 percent of global GDP, some 1.7 trillion dollars, and a 4 percent hit to their own equity holdings. Their chief executive summarised the whole thing in one line: the global economy cannot outrun climate change, so neither can our investments.

So the conclusion sounds strange in a finance meeting and is arithmetically ordinary. There is no sector to rotate into. You cannot diversify away from the biosphere, because every position you hold is written against it. Repairing it is not an ethical add-on to a portfolio. It is the cheapest available way to protect the collateral behind everything you already own.

And unlike most climate spending, it is not a pure cost. A restored watershed produces water, food, timber and a cooler working landscape while it is protecting your balance sheet. You are not buying a green asset. You are repairing the ground the whole portfolio stands on.

PG: We need less than one percent of global GDP to repair the planet? The largest investment after AI?

RDL: Our estimate is around half a percent of global gross domestic product, annually, for twenty years. That is roughly 550 billion dollars a year. A key part of what it buys is support for something like five hundred million smallholder and Indigenous families, who between them steward around a billion hectares, to move to regenerative agriculture and to protect and restore forest and other biomes.

They need to be paid to protect and restore. And let me add one more warning here: agriculture is not something you can learn overnight and everywhere the people working the fields are getting old or leaving for the cities. Food does not grow in supermarkets. But let me get back to the question.

Set that half percent against the shortfall the United Nations Environment Programme (UNEP) already reports for nature-based adaptation finance, which is somewhere between 187 and 359 billion dollars a year. This is not a novel category of spending. It is closing a gap everyone already acknowledges, and getting considerably more for it than adaptation alone.

PG: We desperately need to cool down our planet. I must congratulate you for the brilliant work at the EcoRestoration Alliance and your leadership. Looking forward to your first hand insights on India.

This article is also published on The Diversity Blog. illuminem Voices is a democratic space presenting the opinions of leading Sustainability Thought Leaders, their views do not necessarily represent those of illuminem.

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