GENEVA – Failure to adapt to climate change, persistent extreme weather, and major systemic financial failure are just three of 50 major risks monitored every year in the World Economic Forum’s Global Risks Report. It seems natural to draw connections among them, especially after a “superstorm” shut down Wall Street this past October. Indeed, the report reminds us of the many ways in which systems inevitably affect one another in our interdependent world.
More important, the report warns of the dangers of multiple systems failing. Two of the world’s most fundamental systems, for example, are the economy and the environment; their interplay underpins the first of three case studies of risk in this year’s report.
The 1,000 experts who responded to the WEF’s annual Global Risks Perception Survey, on which the report is based, ranked climate-change adaptation as their top environmental concern in the coming decade. This reflects a wider shift in thinking about the climate, with growing acceptance that we are now locked in to some degree of global temperature change and need to adapt locally – for example, by strengthening our critical infrastructure systems in order to boost their resilience to extreme weather events.
But we face these environmental challenges at a time of persistent economic weakness. Global growth remains slow; and, with monetary and fiscal policies having a limited impact on economic recovery, governments have neither the resources nor the courage to push for major projects. Not surprisingly, our survey group ranked chronic fiscal imbalances second among 50 global risks that are most likely to manifest themselves over the next ten years.