The World Economic Forum has released the 18th edition of its Global Risks Report 2023 based on the latest Global Risks Perception Survey (GRPS) of experts across academia, business, and government, with the purpose of providing insight into the perceptions of short- and long-term risks that will influence policy, investment and management strategies.
Climate change and environmental risks figure significantly in the report. In the short term (two years), out of 10 global risks, respondents rated ‘natural disasters’ second, ‘failure to mitigate climate change’ fourth, ‘large-scale environmental damage incidents’ sixth, ‘failure of climate change adaptation’ seventh, and ‘natural resources crises’ ninth. Looking to the long term (10 years), respondents placed even higher weight on environmental risk, with ‘failure to mitigate climate change’ rated first, replacing the ‘cost of living crisis’, which was rated as the highest short-term risk.
The significance of this annual survey is that it can be seen as an indication of how decision-makers are prioritising adaptation measures in the face of changing global influences. It helps to track perceptions of preparedness and gives insight into prospects for progress on the UN Sustainable Development Goals, highlighting the challenges that must be overcome if success is to be achieved by the 2030 deadline.
Risks to progress
This year’s report emphasises the interconnectedness of international pressures, including the impact of the COVID-19 pandemic, the war in Ukraine, inflation, and the climate change impacts that are increasing international turbulence. With the opportunity shrinking for a low-carbon transition, there is the risk that immediate concerns – such as the growing pressure on public and private sector resources – could set back climate adaptation measures. Political pressures may stymy fiscal support for adaptation, resulting in resources being diverted from medium- to long-term investment proposals.
Action is required urgently
The challenges of the current political and economic climate are converging with consistent reporting of a rapidly changing environment. A recent report by Eurasia Group describes water stress as a ‘global and systemic challenge’. The urgency for climate adaptation is further supported by a recent report by British multinational bank Standard Chartered, which warns that the world is likely to miss the objective of limiting global warming to 1.5°C by 2050 (see ‘News’). In addition, the IPCC has reported that there is a 50% chance of the 1.5°C limit being breached by 2030.
The GRPS found that ‘biodiversity loss and ecosystem collapse’ was not seen as a pressing concern over the short-term. However, this risk rises to fourth place over the 10-year timeframe. The WEF report acknowledges that if temperature limits are exceeded, natural disasters, temperature, and precipitation changes will become the dominant cause of biodiversity loss.
In the context of water, the GRPS highlights that increased water stress will exacerbate the potential for conflict, and dramatic floods, sea level rise and coastal erosion will risk the lives and livelihoods of populations across the globe. This view is supported by UN secretary-general António Guterres, who warned at a meeting of the Security Council on 14 February that seas are rising by triple the average rate in some nations, putting 900 million people globally at risk of becoming climate refugees, affecting people in more than two-thirds of UN member states.
The GRPS highlights concerns that collective global action on climate change is failing to respond effectively to climate risks. A total of 70% of respondents stated that they believed that existing measures to prevent or prepare for climate change are ‘ineffective’ or ‘highly ineffective’, demanding the question of how these esteemed figures will themselves influence the necessary levels of change to combat reckless levels of emissions breaches and environmental degradation.
Urban water management
Noting the priority that cities and local and national governments are placing on water management, the WEF report encourages investment in water-efficient, re-usable solutions, including rainwater harvesting and stormwater runoff. However, it finds that measures to reduce water demand and waste have not kept pace
with the impact that climate change is having on water resources in the most water scarce regions of the world. It states that without adequate intervention, water availability will be a concern in all regions and calls for political cooperation to manage limited resources.
Finding that ‘increased severity and frequency of extreme weather events and other natural disasters are already degrading nature-based solutions, such as wildfires in forests used for carbon offsetting’, the report states that ecosystems are reaching a tipping point, where there is a risk of ‘self-perpetuating and irreversible change that will accelerate and compound the impacts of climate change’.
With the 2023 report painting a grim picture of climatic change and current resilience, it should serve as a wake-up call for urgent, credible, global governance, to combat climate disillusionment and manifest resourceful, dynamic actions to secure future populations. As a barometer of the gravity that business leaders, academia and government are placing on the growing body of evidence of the escalating impacts of climate change, the report demonstrates that climate resilience – or the lack of it – is now focusing minds on the risks of unabated global warming.
By Erika Yarrow-Soden