Photo: World Economic Forum – Global Risks Report 2023

In January the World Economic Forum released the 2023 edition of the Global Risks Report, a must-read for business and government leaders, educators, policymakers, concerned citizens and, hopefully, change-leading youth.  The report defines global risk as “the possibility of the occurrence of an event or condition which, if it occurs, would negatively impact a significant proportion of global GDP, population, or natural resources.”

As always, it was simultaneously educational, disturbing, and highly motivating.  Emergencies can be very effective along those lines.

The report began with a reference to a key warning from last year: the idea that the divergent economic recovery from the global pandemic risked driving deeper divisions between nations at the very time when global collaboration was most needed.

And yet the world has very definitely moved sharply in the opposite direction of collaboration in the past year, epitomized by Russia’s brutal invasion of Ukraine – in turn leading to the weaponization of food and energy, surging inflation, and a cost of living crisis fueling social unrest.  Consequently, as WEF Managing Director Saadia Zahidi stated, the resulting shift in monetary policy to higher interest rates and the end of easy access to cheap debt “will have vast ramifications for companies, governments, and individuals, widening inequality within and between countries.”

And widening inequality is an obvious threat to global security.

The report notes that the world faces the return of a set of “older” risks as we enter 2023 – including “inflation, cost of living crises; trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical confrontation, and the spectre of nuclear warfare.”

At the same time, the above risks are amplified by several newer risks, including “unsustainable levels of debt, a new era of low-growth, low global investment and de-globalization, a decline in human development after decades of progress, rapid and unconstrained development of dual-use (civilian and military) technologies, and the growing pressure of climate change impacts and ambitions in an ever-shrinking window for transition to a 1.5 °C world.”

Not surprisingly, in the short term category – focusing on risks playing out in the next two years – respondents ranked cost of living crises as the top (most severe impact) risk, followed by natural disasters and extreme weather events, geoeconomic confrontation, failure to mitigate climate change, and erosion of social cohesion and societal polarization.

Significantly, five of the top ten risks in the short term category were from the environmental category: natural disasters and extreme weather events, failure to mitigate climate change, large-scale environmental damage incidents, failure of climate change adaptation, and natural resource crises.

And perhaps more significantly, five of the top six global risks in the long term (a ten year horizon) were environmental – with failure to mitigate climate change as the number one risk, followed by failure of climate change adaptation (#2), natural disasters and extreme weather events (#3), biodiversity and ecosystem collapse (#4), and natural resource crises (#6).  It’s also notable that the fifth-ranked risk was large-scale involuntary migration, which of course is a direct result of climate change impacts that increasingly make living conditions across broad regions inhospitable.

So it’s clear that there is solid understanding of the gravity of the impact of environmental risks for the globe in both the short term and long term.  Not surprisingly, the risks conveyed in the report reinforce the warnings presented in other pivotal reports from the IPCC and the WMO. 

The big, and persistent question, of course, is how to transform that understanding into action – especially global collaborative action focused on accelerating sustainable development in order to achieve a shared sustainable future. 

Such collaboration between nations is more important than ever as we are now at the halfway point in the path to the Sustainable Development Goals which come due in 2030 – a path in which we are currently well off track. 

The Risk of Polycrises

Notably, this year’s Global Risks Report also highlighted the threat from simultaneous volatility across multiple sectors – stating that “concurrent shocks, deeply interconnected risks, and eroding resilience are giving rise to the risk of polycrises – where disparate crises interact such that the overall impact far exceeds the sum of each part.”

This is a multiplier effect that the world can ill afford at this critical juncture regarding climate change, food security, biodiversity loss, and many other social and environmental challenges at the heart of the SDGs.

And looking forward, we must not only prevent polycrises, we must also prevent them from becoming permacrises.

Specific to climate issues, the report offered a worrisome outlook, noting that:

  • Climate and environmental risks are the core focus of global risk perceptions over the next decade, yet the risks for which the world seems least prepared to address
  • The lack of deep and concerted progress on climate has highlighted the difference between what is scientifically necessary to achieve net zero emissions and what is politically feasible
  • Growing demands for public and private sector resources from other crises will reduce the speed and scale of climate mitigation efforts over the next two years
  • Related, competing resource demands will threaten progress towards adaptation support for countries bearing the brunt of climate change impacts

Further, the report highlighted the long term threat to natural ecosystems as global resources are diverted to address short term crises.  Citing the linkage between Nature loss and climate change, the authors noted that a failure in either sector will cascade to the other, and that absent significant policy change or investment, “the interplay between climate change impacts, biodiversity loss, food security and natural resource consumption will accelerate ecosystem collapse, threaten food supplies and livelihoods in climate-vulnerable economies, amplify the impacts of natural disasters, and limit further progress on climate mitigation.”

That’s a stark reality check, and of course it’s essential to understand that no nation is immune from such impacts.

Additional Climate Concerns

Also in January, a study (Data-driven predictions of the time remaining until critical global warming thresholds are reached) in The Proceedings of the National Academy of Sciences (PNAS) found that critical global warming thresholds could be reached sooner than previously predicted.   

Leveraging artificial-neural networks, the authors found that global warming was already on the verge of crossing the 1.5°C threshold set forth in the Paris Agreement – predicting that the world will hit that mark between 2033 and 2035 along with a high probability of reaching the 2.0°C mark by mid-century.  Citing the substantial and accelerating risks for natural and human systems at the 1.5°C and 2.0°C levels, the authors noted that their results suggest “a high likelihood of high-impact climate change over the next three decades.”

Also notable was a report from the UK in mid-February, in which researchers warned of the potential of descending into a “doom loop” – where the consequences of the climate and ecological crises and the failure to address them divert resources from addressing the root causes, in turn leading to higher temperatures and greater ecological losses.  

Similar to the Global Risks Report, the authors correctly cited the failure of historical action to address the climate and ecological crises and called for new narratives to “convey the accelerating danger and spur rapid, transformative change.”

Avoiding the Doom Loop

So as we enter 2023, the global risk backdrop is extremely concerning – amplified by the missed opportunity for global collaboration on social and environmental goals in the wake of unprecedented disruption from Covid-19.

There’s a depressing element here; it’s easy for one to question whether nations can truly collaborate meaningfully on critical social and environmental challenges given the failure in the wake of the pandemic – after all, if not now, when? 

Rather than embracing the opportunity in crisis, we’ve seen an acceleration in emissions, increased hunger, increased inequity, and, almost unthinkably, an unprovoked invasion in Europe. 

Nations are now grappling with a broad set of highly disruptive global risk factors as well as the interrelated nature of them. 

And the world is up against tipping points that will “make climate chaos irreversible” as UN Secretary General Guterres noted at COP27 in November.  Going further, he poignantly warned that the world “is on a highway to climate hell with our food still on the accelerator.”

Avoiding the doom loop requires transformative change across key systems – especially food and energy – anchored by a basic level of caring for humanity.

Such transformation cannot occur without substantial collaboration between nations, and yet the current global environment is far from collaborative and is trending in the wrong direction.  One can draw a parallel to global hunger figures, now declining after years of progress.

There’s no doubt that the geopolitical issues that are driving division between nations as opposed to unifying collaborative efforts are enormously complex, fueled by nationalism, security fears, ignorance, arrogance, and narcissism, to name a few.  Overcoming them will be difficult, and yet conceptually the need to do so is simple – because we have no choice but to collaborate on progress for the SDGs.  In that vein, reflecting on myriad takeaways from the Global Risks Report, here are four suggested points on which government leaders should focus:

First, leaders must find a way to bridge the short term and long term risk tradeoff.  The short term cost of living crisis must be addressed without stripping focus and resources from the perceived longer term risks of climate change mitigation, adaptation, biodiversity loss.  The world can no longer afford to continue to kick the climate and sustainability cans down the road.

Second, we cannot overeducate on the concept of (and danger in) tipping points, and we cannot overstate the urgency needed to address them and avoid associated cascading risks.  As the Global Risk Report notes, “a variety of ecosystems are at risk of tipping over into self-perpetuating and irreversible change that will accelerate and compound the impacts of climate change,” and further, continued deforestation, permafrost thaw, and decline in the carbon storage productivity of soils and oceans could turn carbon sinks into carbon sources.  This is an existential issue – it should be leveraged accordingly.

Third, leaders must accept that inaction isn’t an option, it is instead destabilizing.  Climate change, water scarcity, and food insecurity have fueled mass migration that has in turn fueled ultranationalism, threatened democracies, and weakened global security.  Failure to effectively address these challenges guarantees a perpetual negative loop.  Security depends upon sustainability.  Transformational change for sustainability requires global collaboration.

Fourth, and related, the climate and broader sustainability challenge is not a zero-sum game.  The effects of collapsing ecosystems will never be contained to specific borders; for national leaders to act otherwise is the height of irresponsibility.  It is in their self-interest to collaborate.  As former UNSG Ban Ki-moon once noted in the run-up to the Paris Agreement: “Countries must work toward the common interest, beyond narrow national interests.”

There is undoubtedly complexity here, but there is also an element of simplicity.

In his World Food Day message in October, Pope Francis noted that “It will certainly not be possible to address the many crises affecting humanity if we do not work and walk the same path together, leaving no one behind.” 

He added that “This demands, first and foremost, that we see others as our brothers and sisters, as members of the same human family, whose sufferings and needs affect us all, for if one part suffers, all the others suffer with it.”

Despite all of the complexity which currently makes collaboration for climate and sustainability goals seem antithetical, perhaps we can reorient on simplicity.

The simple truth is that there is no choice – nations must go all in on collaboration toward climate and sustainability goals, with urgency. 

As the Global Risk Report notes:  “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.”