Global risk picture is complicated by climate change: WEF

The global risk picture is a complicated one that has been made more complex by the ongoing issue of climate change, according to the latest report by the World Economic Forum (WEF).

Speaking on January 15 at the launch of the report, the 15th of its kind, titled “Global Risks Report 2020”, Børge Brende, president of the WEF, said that the global risk picture is “worrisome”.

“We are seeing risks that are increasing and we really have to deal with,” said Brende. “If we look at the report it is a fact that the last five years have been the hottest ever on our planet. We are seeing that climate change and environmental risks, over the long term, are increasing in this survey.

“For the first time in the 15 years of our risk report, when you look at the 10-year outlook climate change and environmental risks are rated five out of five when it comes to their likelihood, and are four out of five when it comes to impact.

“Climate change, loss of biodiversity, and water scarcity are the major long-term risks. The planet is heating up, the ice is melting and we have to change our approach. The cost of inaction today far exceeds the cost of action. That’s why we now have to implement the necessary policies to deal with climate change.”

The report goes into more detail, saying: “Climate change is striking harder and more rapidly than many expected. 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 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.”

Nat cat stresses

The report states that worldwide economic stress and damage from natural disasters in 2018 totalled $165 billion, and 50 percent of that total was uninsured. A 20018 National Climate Assessment report suggests that, in the US alone, climate-related economic damage could reach 10 percent of gross domestic product (GDP) by the end of the century. According to the WEF, more than 200 of the world’s largest firms have estimated that climate change would cost them a combined total of nearly $1 trillion in the case of nonaction.

The WEF added that there is broad recognition among these same firms that there are significant economic opportunities, provided the right strategies are put in place. Countries will experience losses unequally, with the highest economic costs being felt by large economies, while risk of exposure, death and non-economic costs is higher in smaller, poorer economies.

Cyberattacks are another area that is highlighted by the WEF report. It points out that the digital nature of what has been described as Fourth Industrial Revolution (4IR) technologies [the previous three were steam, mass production/electricity and electronics] makes them intrinsically vulnerable to cyberattacks that can take a multitude of forms—from data theft and ransomware to the overtaking of systems with potentially large-scale harmful consequences.

The WEF report says that operational technologies are at increased risk because cyberattacks could cause more traditional, kinetic impacts as technology is being extended into the physical world, creating a cyber-physical system. However, using “security by design” principles to integrate cybersecurity features into new products is still secondary to some insurers to getting products quickly out into the market.

Cyber worries

According to the WEF report: “Cyberattacks on critical infrastructure—rated the fifth top risk in 2020 by our expert network—have become the new normal across sectors such as energy, healthcare, and transportation. Such attacks have even affected entire cities. Public and private sectors alike are at risk of being held hostage.

“Organised cybercrime entities are joining forces and their likelihood of detection and prosecution is estimated to be as low as 0.05 percent in the US. ‘Cybercrime-as-a-service’ is also a growing business model, as the increasing sophistication of tools on the Dark Net makes malicious services more affordable and easily accessible for anyone.”

The importance of technology is stressed by the report, which points out that more than 50 percent of the world’s population are now online, that approximately one million people go online for the first time each day, and that two-thirds of the global population now own a mobile device. While digital technology is bringing tremendous economic and societal benefits to much of the global population, issues such as unequal access to the internet, the lack of a global technology governance framework and cyber insecurity all pose significant risk.

Geopolitical and geo-economic uncertainty—including the possibility of fragmented cyberspace—also threaten to prevent the full potential of next-generation technologies being realised.

Respondents to the WEF survey rated “information infrastructure breakdown” as the sixth most impactful risk in the years to 2030.

A copy of the WEF report can be obtained here: https://www.weforum.org/reports/the-global-risks-report-2020