Climate Change: the Leading Risk of 2020?

    Stockholm (NordSIP) – For the first time since the World Economic Forum (WEF) started conducting its Global Risks Perception Survey in 15 years ago, climate-related threats rank as the top risks for 2020.

    Past Performance

    The Global Risks Perception Survey polls a sample of 800 members of the WEF from across several regions to inquire about the risks they perceive to be most likely and most impactful on the world in the coming year. In the past, the report was able to spot the risk of a financial crisis ahead of 2008. Discreetly, it also highlighted the risks of a migration crisis in Europe due to the Syrian conflict in 2015, noting that.

    The survey’s record on the issue of international conflict is not particularly good, unsurprisingly. It missed the August 2008 Russo-Georgian war in Abkhasia as well as the Russo-Ukrainian War in 2014. It also missed the start of Eurozone sovereign debt crisis of 2010, not making a single reference to the dangers in Greece, despite revelations of Greek fiscal problems at the end of 2009. Although the 2010 risk report had highlighted the financial risk of asset price collapse and of fiscal crises, the onus won the USA and the UK, the most prominent victims of the financial crisis of 2007-09.

    2020 Risks

    “Climate change is striking harder and more rapidly than many expected,” the report explains. “The last five years are on track to be the warmest on record, natural disasters are becoming more intense and more frequent, and last year witnessed unprecedented extreme weather throughout the world.”

    “Alarmingly, global temperatures are on track to increase by at least 3°C towards the end of the century—twice what climate experts have warned is the limit to avoid the most severe economic, social and environmental consequences”, the report proceeds. “The near-term impacts of climate change add up to a planetary emergency that will include loss of life, social and geopolitical tensions and negative economic impacts.”

    The top 5 risks identified as most likely to take place were “Extreme Weather”, “Climate Action Failure”, “Natural disasters”, “Biodiversity Loss”, “Human-made Environmental Disasters”.

    In terms of impact, the risks were not as homogenously climate-related. Concerns about “Weapons of Mass Destruction” were prominent enough to rank in at number 2, while the societal risk of “Water Crises” ranked at number 5. “Climate Action Failure”, “Biodiversity Loss” and “Extreme Weather” ranked at numbers 1, 3 and 4, respectively.

    “The global economy is faced with a ‘synchronised slowdown’, the past five years have been the warmest on record, and cyberattacks are expected to increase this year—all while citizens protest the political and economic conditions in their countries and voice concerns about systems that exacerbate inequality,” warned Børge Brende, President of the WEF, in the preface to the report.

    The full report is available here.

    Image by FelixMittermeier from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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