US security agencies have released their first comprehensive public-facing intelligence assessments on the impacts of climate change on US national security—three months after the due date set out in President Joe Biden’s January executive order on climate and security, but just in time for COP26 in Glasgow.

The release of these documents is a reminder that the US is attempting to reorganise its national security mission around the climate crisis. It also highlights that Australia urgently needs a national and regional assessment of its own economic and strategic risks in a heating climate as a necessary first step in building a credible national roadmap for emission reductions and resilience after COP.

The most comprehensive of these assessments, the national intelligence estimate (NIE) on climate change and national security attempts to aggregate the collective wisdom of all US national security agencies. It assumes that the COP process will fail to contain temperature rises and that the continued wrangling to reach political agreement on emissions will exacerbate geopolitical tensions.

It goes on to say that this is because the world’s top fossil-fuel-producing nations, which include Australia, Russia and Saudi Arabia, will resist transition, fearing the short-term economic and strategic costs more than they fear the near- and long-term damage of climate change.

This key judgement should give Australia pause. The US intelligence community has essentially pointed out that Canberra is at odds with Washington and its NATO partners on this central national and global security priority—which is probably not a sustainable position. Prime Minister Scott Morrison’s commitment to net-zero emissions by 2050, announced last week without an intelligible roadmap, is unlikely to change this assessment.

However, is the NIE assessment right about the success of fossil-fuel producers in stymying the energy transition? The transition could happen more quickly than anticipated. The momentum of global financial markets on renewables has gathered real pace over the past year. This includes a major COP agenda item, the UN-backed Glasgow Financial Alliance for Net Zero, which was launched in April and now has over US$100 trillion in assets under management.

This also means that a lot more data and analysis on climate risk is entering the financial system. The real pricing in of climate risk into the US market, as recommended by October’s US Treasury Financial Stability Oversight Council report, is beginning in earnest.

The fate of the ambitious infrastructure package currently in front of the US Congress is also relevant here. If it’s passed with some of the climate provisions in place, that will also accelerate the mobilisation of capital towards the energy transition and climate resilience.

How much power will fossil-fuel producers still have to stand against the increasing flows of capital into clean energy? Not much if demand and investment fade out and national revenues suffer precipitous declines. At the same time, the EU and US will want fossil-fuel producers and big emitters to make deep cuts in their domestic emissions and will probably use big levers like emissions tariffs to pressure them do so. As an example, the EU and US have just done a sideline deal at the G20 to restrict market access to dirty steel, a move primarily aimed at China.

Some quick thinking needs to be done about how to handle the geopolitical pushes and pulls of this energy interregnum.

Steep declines in national revenues could make fossil-fuel producers turn to agricultural sources of income that accelerate deforestation and therefore emissions—palm oil in Indonesia, or more cattle in the Amazon.

And does anyone want to live next door to a Russia that has lost a third of its national revenue? Or thought about the impact that tanking major economies could have on global economic stability?

Other underestimations in the NIE judgements are especially relevant to Australia’s climate and security context.

Both the NIE and Department of Defense assessments may be underplaying the effects of climate in Southeast Asia, particularly Indonesia.

The NIE names 11 ‘countries of concern’, including Afghanistan, South Sudan and Columbia, that the US intelligence community believes are the most vulnerable to warming temperatures on land and sea, extreme weather and sea-level rises.

Further, it points to central Africa and the Pacific islands as regional arcs of vulnerability, more prone to political instability and unable, because of poverty and poor governance, to adapt, and suggests that countries there are most likely to succumb first to climate-induced state failure.

There’s no doubt that these nations are highly vulnerable. But evidence suggests that Southeast Asia and Indonesia in particular will be more affected by a dangerous constellation of climate hazards.

Indonesia has a unique exposure to El Niño and La Niña climate patterns that means it will experience more severe and extreme weather events, more population exposure to sea-level rises than anywhere in the world and higher sea temperatures that will decimate the fisheries from which its people get half of their protein.

And Indonesia’s responsiveness to cascading, compounding climate events will be limited by high levels of inequality, high population density and  fragile governance, particularly in poor and underdeveloped parts of the country. By 2030, the archipelago will be home to 300 million people.

The global stakes for Indonesia’s success or failure on climate change are high. It is Asia’s third largest economy. And Indonesia will be the sixth biggest emitter by 2030, according to the NIE climate report, which means it will crash the global carbon budget if it’s unable to change course.

One more important underestimation in the NIE’s conclusions is the assessment that, while the US and developed countries might experience some pain and costly adjustments, they’ll be able to adapt to warming of 2°C and beyond.

It even argues that states in higher latitudes such as Russia, Canada and the Scandinavian countries might actually benefit from climate change because warmer temperatures will allow more agriculture. But as the past 12 months have shown in northern Europe, warming doesn’t mean stable weather, not to mention the accelerating loss of pollinators, which could cancel out any agricultural gains.

All this also seems to assume that developed countries are not already contending with multiple interrelated systemic crises, that the global economy will keep growing, that pandemic disease won’t return, that potential climate-induced catastrophes won’t affect global food systems, that people movements can be managed without enflaming authoritarian movements in democracies, and that global information systems aren’t flooded with disinformation, propaganda and conspiracy theories.

Some of the most ineffective responses to Covid-19, wildfires, storms and floods over the past two years have been in developed nations with the most economic capacity. The problem has been political failure and institutional weakness. The next round of climate change national security assessments will need to figure out how to engage with these risks in rich nations.

In the meantime, Australia, itself highly exposed to climate risk and situated in a similarly vulnerable region of nearly 700 million people, has yet to even commence its own climate and security risk assessment. That’s a policy failure that urgently needs to be addressed.