Beyond hazards and sectors: governing systemic climate risks

The report identifies a recurring 'implementation gap' where adaptation policies increasingly use the language of systemic risk—interconnected hazards, cascading impacts, and deep uncertainty—but continue to operate through hazard- and sector-based routines. Through comparative analysis of the EU, ASEAN, and the US, it finds that mandates, funding, and monitoring systems remain fragmented, often ignoring policy trade-offs and distributional inequities. It concludes by proposing a framework based on systemic risk framing, policy interlinkages, and deep uncertainty management to help decision-makers stress-test investments and avoid maladaptation.

• There is a consistent 'implementation gap' across the reviewed regions: while systemic risk language is increasingly present in strategies and assessments, the operational routines—including mandates, budgets, and accountability—remain organized around specific hazards and sectors.
• Adaptation is often 'systematic' (mainstreamed into sectors) rather than 'systemic' (managing interdependencies), which leads to a failure to account for how decisions in one sector can create risks in another, such as irrigation priorities affecting energy and water supply.
• Justice and equity are frequently cited as guiding principles in adaptation framing, but they are rarely embedded as binding criteria in investment decisions or tracked through shared distributional metrics, risking the reinforcement of existing inequalities.
• Deep uncertainty, including low-probability 'tail risks' and climatic tipping points, is acknowledged in high-level assessments but is largely absent from routine planning and appraisal, which typically assume incremental change and stable baselines.
• Policy coherence is a major bottleneck; adaptation goals often collide with competing objectives like short-term fiscal efficiency or economic growth, and post-disaster recovery frequently restores pre-disaster vulnerabilities rather than building back better.
• In Southeast Asia, systemic awareness is emerging—particularly regarding multi-hazard dynamics—but is severely constrained by limited analytical capacity, data gaps, and a reliance on project-based interventions at the subnational level.
• In the United States, federal assessments articulate cascading risks, but state-level operationalization is uneven due to fragmented funding streams and political contestation, with some states like South Carolina showing more advanced systemic recognition than others like Georgia.
• In Europe, while there is a dense regulatory architecture and strong analytical capacity (e.g., the European Climate Risk Assessment), implementation is hindered by sectoral silos and a 'political economy of short-termism' that undervalues long-term resilience.

APA

Mikaelsson, M. A., Crouse, C., Carr, E. R., & Klein, R. J. (2026). Beyond hazards and sectors: governing systemic climate risks. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2026/05/sei-report-may-2026-beyond-hazards-sectors-3.pdf

Chicago

Mikaelsson, Mikael Allan, Cynthia Crouse, Edward R. Carr, and Richard J.T. Klein. Beyond hazards and sectors: governing systemic climate risks. Stockholm Environment Institute, 2026. https://www.sei.org/wp-content/uploads/2026/05/sei-report-may-2026-beyond-hazards-sectors-3.pdf.

Wikipedia

{{cite report |last1=Mikaelsson |first1=Mikael Allan |last2=Crouse |first2=Cynthia |last3=Carr |first3=Edward R. |last4=Klein |first4=Richard J.T. |title=Beyond hazards and sectors: governing systemic climate risks |publisher=Stockholm Environment Institute |date=May 2026 |url=https://www.sei.org/wp-content/uploads/2026/05/sei-report-may-2026-beyond-hazards-sectors-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mikaelsson2026beyond, author = {Mikaelsson, Mikael Allan and Crouse, Cynthia and Carr, Edward R. and Klein, Richard J.T.}, title = {{Beyond hazards and sectors: governing systemic climate risks}}, institution = {Stockholm Environment Institute}, year = {2026}, month = may, url = {https://www.sei.org/wp-content/uploads/2026/05/sei-report-may-2026-beyond-hazards-sectors-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }