WASHINGTON — A range of environmental risks and cybersecurity threats top the list of concerns in the World Economic Forum’s 2018 Global Risk Report, even as economic issues diminish amid continued growth.
While the economy appears to be improving, overall respondents to the Global Risk Perceptions Survey, which is the foundation for the report, expect 2018 to be a potentially volatile year. About 59 percent expected to see risk increasing, and 93 percent said they expected a worsening of “political or economic confrontations/frictions between major powers” this year.
Chief among the global risks is the environment and climate change, according to the report. The survey found that all five risks in the environmental category were ranked higher than average on both likelihood of happening and on impact over the next 10 years.
Those risks range from extreme weather events to biodiversity loss. Given the shocks of the past year, it is no surprise that climate-related risks seem more possible and more likely to cause significant damage than in the past.
“A trend towards nation-state unilateralism may make it more difficult to sustain the long-term, multilateral responses that are required to counter global warming and the degradation of the global environment,” the report wrote.
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Among the threats is that as temperatures continue to rise, agricultural systems will see significant disruption. More than 75 percent of the world’s food comes from just 12 plants and five animal species, making people across the globe vulnerable to what the report calls “catastrophic breakdowns in the food system.” The United Nations’ Food and Agriculture Organization has estimated that there is a one-in-20 chance per decade that heat, drought, and floods will cause a failure of maize production in both the United States and China, which would lead to widespread famine. The impacts of climate-related agricultural challenges are likely to be felt first and more strongly in developing countries.
Finding new ways to tackle air pollution is also a critical challenge, with more than 90 percent of the world’s population living in areas where the air pollution exceeds World Health Organization guidelines.
The report also discusses the growing threats to cybersecurity. Cyber attacks against businesses have more than doubled in five years, from 68 per business in 2012 to 130 per business in 2017. And the costs of those cybersecurity breaches are also on the rise, according to the report.
The report also pointed to automation and rising income and wealth inequality as potential risks, along with an increasing limited ability to respond to crises with policy solutions.
The world continues to fracture, and not just on economic and political lines. According to the report, the gender parity gap across health, education, politics, and the workplace grew for the first time since the report tracked the factor in 2006.
“The world has moved into a new and unsettling geopolitical phase. Multilateral rules-based approaches have been fraying ...There is currently no sign that norms and institutions exist towards which the world’s major powers might converge,” the report says.
Trade risks are likely to increase in 2018, as the World Trade Organization could be severely limited in its ability to resolve trade disputes. The U.S. has blocked appointments to the WTO’s appellate body, which has only four of its seven seats filled, and could cease functioning in 2019.
The report also revisits some past key risks, including antimicrobial resistance, which continues to be a challenge and threat to the global health and the global economy. A World Bank report released in March 2017 estimated that antimicrobial resistance may reduce the gross domestic product by between 1.1 and 3.8 percentage points by 2050. Another report, from the Wellcome Trust and the U.K. government found AMR could cost $100 trillion dollars between now and 2050, and result in 10 million people dying each year during that time.
As the risk grows, there has been some limited action, though there are few new drugs in the pipeline. Efforts have included a commitment from G-20 leaders to develop national action plans and work to ensure the world’s poorest countries, who didn’t contribute to that problem, continue to have access to affordable medications.
Read more Devex coverage on climate change and cybersecurity.
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
