Risks of climate change should be assessed in the same way as risks to national security, financial stability or public health, according to the Foreign Commonwealth Office (FCO).
Its report Climate Change: A risk assessment, which was sponsored by the IFoA, outlined the principles of risk assessment used in finance and national security to understand the risks of climate change.
These principles include: assessing risks in relation to objectives or interests; identifying the biggest risks, meaning worst-case scenarios; considering the full range of probabilities; assessing systemic risks as well as direct risks and being explicit about valuation of risks.
To understand climate change risks, it argued decision makers should take into account countries' plans and policies, understand the science of how the climate may change and consider how this could affect "the complex systems of the global economy and international security".
Foreign Office minister Baroness Anelay said: "When we think about keeping our country safe, we always consider the worst-case scenarios. That is what guides our policies on nuclear non-proliferation, counter-terrorism, and conflict prevention. We have to think about climate change the same way.
"Unlike those more familiar risks, the risks of climate change will increase continually over time - until we have entirely eliminated their cause. To manage these risks successfully, it is essential that we take a long-term view, and that we act in the present, with urgency."
The IFoA, who also provided actuarial advice to the FCO, said risk assessment in the actuarial profession was based on understanding scenarios that could have the greatest impact, even if the probability is low.
David Hare, past president of the IFoA, said: "Climate change is primarily a risk management problem - one of the most important goals of climate change policy should be to limit the probability of a very bad outcome to an acceptably small value."
Fiona Morrison, president of the IFoA, said: "As the report shows, adapting to, and mitigating the risk of, climate change is of vital importance for governments.
"One of the most important goals of climate change policy should be to recognise the possibility of very bad outcomes and a full risk assessment of all possibilities is the best way to achieve this. As actuaries, we see good decisions as being based on exploring difficult scenarios and using this information to mitigate risk."
