Climate tops risks, complicated by pandemic

Climate action failure tops the World Economic Forum’s Global Risks Report 2022 as the number one long-term threat to the world. The pandemic has added further complication with the resulting divergent economic recovery threatening the collaboration needed on climate and other global challenges.

Respondents to the WEF’s Global Risks Perception Survey rank climate action failure as the risk with potentially the most severe impacts over the next decade.

For the next five years, respondents signal societal and environmental risks as the most concerning. However, over a 10-year horizon, the health of the planet dominates concerns: environmental risks are perceived to be the five most critical long-term threats to the world as well as the most potentially damaging to people and planet, with climate action failure, extreme weather, and biodiversity loss ranking as the top three most severe risks. Respondents also signalled debt crises and geoeconomic confrontations as among the most severe risks over the next 10 years.

Asked to take a view of the past two years, respondents to the GRPS perceive societal risks — in the form of social cohesion erosion, livelihood crises and mental health deterioration — as those that have worsened the most since the pandemic began.

Slower global growth, rising commodity prices, inflation and debt are emerging risks.

The report says that the economic fallout from the pandemic is compounding with labour market imbalances, protectionism, and widening digital, education and skills gaps that risk splitting the world into divergent trajectories. In some countries, rapid vaccine rollout, successful digital transformations and new growth opportunities could mean a return to pre-pandemic trends in the short term and the possibility of a more resilient outlook over a longer horizon. But many other countries will be held back by low rates of vaccination.

Demonstrating the global divergence the report showed that in the poorest 52 countries — home to 20 per cent of the world’s people — only 6 per cent of the population had been vaccinated at the time of writing. And that by 2024, developing economies (excluding China) will have fallen 5.5 per cent below their pre-pandemic expected GDP growth, while advanced economies will have surpassed it by 0.9 per cent —widening the global income gap.

The Global Risks Report takes views from nearly 1,000 risk experts and global leaders in busines, government and civil society.