Understanding critical ecosystems as earth system tipping points

The report defines ecosystem tipping points (ETPs) as critical thresholds beyond which ecosystems undergo rapid, self-amplifying and largely irreversible change. These dynamics are characterised by non-linearity, abruptness and deep uncertainty, making timing and impacts difficult to predict. Climate change is a key driver, but land use change, pollution, overexploitation and invasive species compound risks. Ecosystems can collapse faster than cryosphere or ocean systems, with permanent consequences for economic activity and climate regulation.

Ecosystem tipping points requiring prioritisation by policymakers

The report identifies several ecosystems with at least medium scientific confidence of large-scale tipping risk: the Amazon rainforest, tropical peatlands, boreal forests, coral reefs and mangroves. These systems provide globally significant ecosystem services and host substantial biodiversity. Tropical ecosystems with tipping risks currently store around 220 gigatonnes of carbon, equivalent to roughly 20 years of global CO₂ emissions at current rates. Crossing thresholds could destabilise these carbon stocks within decades or faster. Threshold estimates are highly uncertain; for example, partial Amazon dieback is associated with 2–6°C of global warming or 20–40% forest loss. Many drivers are already approaching lower-bound estimates, increasing the urgency of intervention.

Threats to financial and price stability from ecosystem tipping points

ETPs threaten economic stability through abrupt losses of provisioning, regulating and cultural ecosystem services. Impacts include reduced agricultural yields, impaired hydropower generation, loss of flood and storm protection, health effects and infrastructure damage. For example, Amazon forest loss could reduce hydropower capacity in Amazon countries by up to 75%, while coral reef and mangrove degradation currently expose at least US$400 billion in coastal assets to higher storm damage. Economic losses transmit through value chains, contributing to inflationary pressures in food, energy and water markets. By weakening household, corporate and sovereign balance sheets, ETPs can generate credit, market, underwriting and liquidity risks, with potential for systemic financial contagion. The report highlights that physical risks from ETPs may materialise faster than conventional climate risk assumptions.

Quantifying the risks of ecosystem tipping points

The report finds that existing integrated assessment models and scenario analyses substantially underestimate ETP risks. Tipping points are often excluded or represented as smooth, low-probability events, with unrealistic assumptions about substitutability between ecosystem services and other inputs. Studies allowing high substitution show limited GDP impacts even under extreme ecosystem loss, which conflicts with Earth system science evidence. When models incorporate non-linearity, irreversibility and interacting tipping points, estimated damages rise sharply; including multiple interacting tipping points can increase the social cost of carbon by up to 800%. The report concludes that current quantitative tools are better suited to risk exploration than risk management.

Policy and research considerations

The report argues that ETPs pose potentially systemic risks to price and financial stability, warranting prioritisation by central banks, financial supervisors and ministries of finance. It recommends broadening modelling approaches to better capture non-linear dynamics, limited substitutability and cascading effects, including multi-regional input-output and production network models. Given fundamental uncertainty, policymakers should also adopt qualitative and precautionary approaches, such as mapping financial flows to activities driving ecosystems towards tipping points and applying a double materiality perspective. Effective risk management requires coordination across monetary, prudential, fiscal, environmental and industrial policy, with governments leading efforts to prevent thresholds being crossed ex ante.