Stockholm (NordSIP) – The World Economic Forum (WEF) published its Global Risks Report 2023 on January 11th. The report is based on the Geneva based non-profit foundation’s Global Risks Perception Survey (GRPS) of over 1,200 experts from international academia, government, business and civil society, which is complemented by input from the WEF Executive Opinion Survey (EOS) of 12,000 business leaders in 121 countries.
The report was published on the same day that Sultan Ahmed Al Jaber, the CEO of the Abu Dhabi National Oil Company was named President of the upcoming COP28. It is therefore worth highlighting the fact that nine of the Top 10 risks the respondents identified for the coming decade can be directly or indirectly linked to the climate crisis.
Cost of living dominates the short-term
Over the shorter two-year term the cost of living crisis takes the top slot. In a global economy still suffering the after-effects of the COVID-19 crisis and the ongoing war in Ukraine, the WEF survey signals a particularly difficult two-year period to come with governments expected to struggle with the challege of mitigating the effects of the cost of living crisis without causing further inflation, or even stagflation. Longer term, the report also points to increased geoeconomic warfare, with countries potentially seeking to address their vulnerabilities at the expense of others. This phenomenon is also expected to result in less efficient value chains and therefore higher prices. Some of the gloomier predictions are concerned with economic warfare escalating towards full-on military confrontation.
Rapid rise of technology exposes vulnerabilities
The one risk in the Top 10 that is not climate related is countries’ increased dependence on technology across their economies, which exposes them to cybercrime and state-sponsored cyber attacks. Technology is also seen as a factor exacerbating global inequality, as well as a risk to individual digital sovereignty and privacy as ever larger data sets are available for exploitation.
Limp response to the climate crisis
Those seeking encouragement after several underwhelming COP meetings will be disappointed by the negative outlook on the climate crisis that is presented in the WEF report. The respondents consider the world highly unprepared for climate and environmental risks. There is great concern that the ongoing difficult economic circumstances are diverting resources and attention away from the urgency of the crisis facing the natural environment.
Interconnected risks leading to potential polycrises
Many of the risks presented in the report are happening concurrently and can be interlinked. This gives rise to the risk of polycrises, whereby separate phenomena interact to create a compounding effect and a far greater overall risk. For instance, food, water or resource shortages can lead to humanitarian crises such as famine or displacement, as well as knock-on effects in slowing down climate change adaptation and mitigation or potential resource wars. 82% of respondents predict at least “consistent volatility across economies and industries with multiple shocks accentuating divergent trajectories” over the next two years, with 54% sharing that gloomy outlook for the coming decade.
The WEF report is focused on risks, not solutions, and therefore makes difficult reading. However, as the WEF puts it: “some of the risks described in this year’s report are close to a tipping point. This is the moment to act collectively, decisively and with a long-term lens to shape a pathway to a more positive, inclusive and stable world.” Let us hope that Sultan Al Jaber is fully on board with this idea.
