“The environment dominates the global risks landscape,” says the World Economic Forum
Climate change is the number two underlying trend
March 22nd 2017
For the last ten years, the World Economic Forum has published an annual Global Risks Report, based on a Global Risks Perception Survey. The survey gathers perceptions from various countries and sectors of society, including governments, business, academia, and non-governmental organisations. Respondents to the survey are asked to assess the likelihood and impact of a number of individual risks on a scale of 1 to 7, 1 representing a risk that is not likely to happen, and 7 a risk that is very likely to happen. Similarly, 1 represents a risk that is considered to be of little impact, and 7 a risk that will have a devastating impact. Respondents are also asked for their views on how these risks may be interconnected and to identify the trends that are likely to shape global development over the next ten years.
Global Risks: The changing landscape
The World Economic Forum (WEF) says that a cluster of interconnected environment-related risks – including extreme weather events, climate change, and water crises – has consistently featured among the top-ranked global risks for the past seven editions of the Global Risks Report.  The 2015 report, based on perceptions gathered in 2014, noted a “radical departure” from previous years with economic risks featuring only marginally in the top five. As a previous article explained, the WEF reported that changing perceptions indicated “a shift over past years away from economic risks in general to environmental risks – ranging from climate change to water crises… While this highlights a recognition of the importance of these slow-burning issues, strikingly little progress has been made to address them in light of their far-reaching and detrimental consequences for this and future generations.”
Last year’s Global Risks Report, published in January 2016 and based on perceptions gathered in 2015, saw a further change, with the failure of climate change adaptation and mitigation moving to top spot in the risks considered to have the most devastating impact. Biodiversity loss and ecosystem collapse also featured in the top ten, rated at number six in terms of impact. In terms of likelihood, extreme weather events were considered the second most likely event to occur, with the failure of climate change adaptation and mitigation rated as the third, and natural disasters rated as the fifth. The most likely risk was considered to be large-scale involuntary migration, while interstate conflict featured at number four. 
The Paris Agreement, December 2015
The adoption of the Paris Agreement by 195 governments on December 12th 2015 gave grounds for a more optimistic view of measures taken with regard to climate change, noted in the 2016 report but too late in the year to modify perceptions. As the WEF summarised, the Paris Agreement was “a major turning point in the global fight against climate change. The world’s nations agreed to limit global average temperature rise to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” 
The WEF reported that, by January 2016, nearly 190 governments had submitted their climate action plans, covering over 95% of total global emissions, but pointed out that “these efforts alone will not suffice, as even the most optimistic estimates suggest that these pledges taken together would contain warming only to 2.7°C above pre-industrial levels.” However, the report went on to say that cost-competitive renewables were now available and would also help in the fight against climate change: “In 2014, renewables made up over half of total energy investment, while the cost of solar panels has fallen by 75% and that of batteries for electric vehicles by 50% since 2009. Wind-generated electricity in over 50 countries is now at grid parity – when the customer of electricity pays the same to buy wind energy as to buy traditional technologies.”
2017: ‘Extreme weather events’ emerges as the single most prominent global risk
These grounds for optimism are reflected in the 2017 report, based on a survey of perceptions gathered in 2016. The risk of failure of climate change adaptation and mitigation does not feature in the top ten of the most likely to occur, and drops from first place to fifth place in the top ten of the most devastating impact. However, extreme weather events takes top spot in terms of the most likely, with natural disasters at number three, and man-made environmental disasters at number eight. In terms of the most impact, extreme weather events features at number two, water crises at number three, and natural disasters at number four. In short, environmental risks still dominate the top five risks considered to have the most devastating impact. Weapons of mass destruction now takes the top spot, while terrorist attacks, data fraud or theft, and cyber attacks all feature in the top ten of the most likely.
Climate change was the number two underlying trend in the 2016 Global Risks Perception Survey
The 2017 report highlights the electoral surprises of 2016 and the trends that were identified in the perception survey. These include the social trends of rising income and wealth disparity, increasing social polarisation, and intensifying national sentiment, giving rise to three key challenges the world now faces. Technological change, including concerns over robotics and artificial intelligence, and the need to strengthen global cooperation are also highlighted. But in a Press Release, the WEF says that climate change was the number two underlying trend identified in the survey: “Economic inequality, societal polarization and intensifying environmental dangers are the top three trends that will shape global developments over the next 10 years. Collaborative action by world leaders will be urgently needed to avert further hardship and volatility in the coming decade.”
On those environmental dangers, the report explains how a number of risks are related, with climate change having an impact on agriculture, food sources, social conflict and migration. The far-reaching consequences of climate change means there is an even greater need for global cooperation: “Further challenges requiring global cooperation are found in the environmental category, which this year stands out in the Global Risks Perception Survey… Environmental concerns are more prominent than ever, with all five risks in this category assessed as being above average for both impact and likelihood.” As regards the changing landscape, this was the first time that all five environmental risks have been assessed as highly likely and having high impact. 
Renewables: Reasons to be cheerful?
In Part One of the Global Risks Report 2017, the WEF assesses the current state of progress in the measures taken to tackle climate change. There is some good news on renewables. The WEF says that 2016 saw “positive empirical evidence that the transition to a low-carbon economy is underway.” It cites a report by Bloomberg New Energy Finance which records that global investment in renewable energy capacity in 2015 was $266 billion, “more than double the allocations to new coal and gas capacity.”  A report by the International Energy Agency is also cited, which says that that “the total generation capacity of renewable energy now exceeds coal-fired power plants for the first time, and for the past two years greenhouse gas emissions have been de-coupled from economic growth.” 
A quote from Al Gore of Generation Investment Management provides even more grounds for optimism:
“In many parts of the world, renewable energy is already cheaper than that of fossil fuels. In some developing regions of the world, renewable energy is leapfrogging fossil fuels altogether… Sixteen years ago, projections said that by 2010 the world would be able to install 30 gigawatts of wind capacity. In 2015, we installed 14.5 times that amount. Solar energy’s price decrease is even steeper and more exciting. Fourteen years ago, projections said that the solar energy market would grow 1 gigawatt per year by 2010 – that goal was exceeded by 17 times over. In 2015, we beat that mark by 58 times and 2016 was on pace to beat that mark 68 times over. In fact, the cost of solar energy has come down 10% per year for 30 years.”
Tackling Climate Change: “The pace of change is not yet fast enough”
As regards national government initiatives and commitments, the WEF says that further progress was made during 2016 in addressing climate change and related environmental risks, “reflecting firm international resolve on the transition to a low-carbon global economy and on building resilience to climate change.” The Paris Agreement on climate change, which came into force on November 4th 2016, has now been ratified by 110 countries, whilst later that month “a strong signal of support for implementing the Agreement was made by 196 governments, including China, at the Marrakesh Climate Conference.”  The report also mentions an agreement by the International Civil Aviation Organisation on a measure to ensure no net growth in aviation emissions after 2020, and an agreement by parties to the Montreal Protocol on ozone-depleting substances aimed at reducing the use of hydrofluorocarbons, which are known to possess a high global warming potential. 
However, the WEF says, “the pace of change is not yet fast enough.” In support of this argument, it cites a body of evidence concerning CO2 emissions and global warming:
- Despite the acceleration of investment in green technology, with the parallel suggestion that CO2 emissions from industrial end energy sources may have reached a peak, global greenhouse gas emissions are currently increasing by the equivalent of 52 billion tonnes of CO2 per annum, according to The Emissions Gap Report 2016 from the United Nations Environment Programme. 
- Provisional analysis by the World Meteorological Organisation suggests that 2016 is set to be the first time the global average temperature was 1°C or more above the 1880–1999 average. 
- Figures from the National Oceanic and Atmospheric Administration show that each of the eight months from January to August 2016 were warmer than equivalent periods in the whole 137-year record. 
- Reports from the IPCC (Intergovernmental Panel on Climate Change) suggest that, to keep global warming within 2°C, beyond which the risks associated with climate change are considered to be dangerous, the world will need to reduce emissions by 40–70% by 2050 and eliminate them altogether by 2100. The IPCC notes that more than 50% of global emissions are generated collectively by the USA, the EU, China and India, but says that all countries will need to accelerate their action in order to limit warming to 2°C. 
The impact of climate change on the natural environment and on communities across the globe is already being felt. The Global Risks Report 2017 notes a number of examples, including:
- Scientists have recorded a record melt of sea ice in the Arctic in 2016, whilst the Great Barrier Reef “had an unprecedented coral bleaching event, affecting over 700 kilometres of the northern reef.” 
- The UN Office for Disaster Risk Reduction reports that close to 1 billion people were affected by natural disasters in 2015. 
- The threat from rising sea levels has led a village community in Fiji to relocate elsewhere , whilst a village in Alaska and the entire Kiribati nation (an island community in the Pacific Ocean) are reportedly planning to relocate because of potential flooding or even submersion of their lands.  
Last year’s Global Risks Report also included a detailed analysis of the impact of climate change on agricultural production and the risks to food security, including the disruption to food systems and transport infrastructure caused by extreme weather. Summarising the interconnectedness of these risks, the WEF says in its latest report: “The confluence of risks around water scarcity, climate change, extreme weather events and involuntary migration remains a potent cocktail and a ‘risk multiplier,’ especially in the world economy’s more fragile environmental and political contexts.”
Looking Ahead: One step forward, two steps back?
Looking ahead, the WEF delivers a note of caution. Noting that the world has seen “significant progress in the area of climate change in 2016, with a number of countries, including the US and China, ratifying the Paris Agreement,” its press release adds the warning that “political change in Europe and North America puts this progress at risk.”
Margaretta Drzeniek-Hanouz, Head of Global Competitiveness and Risks at the WEF, reiterates the need for global cooperation in this context: “Urgent action is needed among leaders to identify ways to overcome political or ideological differences and work together to solve critical challenges. The momentum of 2016 towards addressing climate change shows this is possible, and offers hope that collective action at the international level aimed at resetting other risks could also be achieved,” she said.
Whether political leaders will do more than take note of these words remains to be seen.
 WEF (World Economic Forum). The Global Risks Report 2017. 12th edition. Available as a PDF from http://www3.weforum.org/docs/GRR17_Report_web.pdf.
 The World Economic Forum defines these risks as follows:
• Extreme weather events (e.g. floods, storms, etc.): Major property, infrastructure and environmental damage as well as human loss caused by extreme weather events.
• Failure of climate-change mitigation and adaptation: Governments and businesses fail to enforce or enact effective measures to mitigate climate change, protect populations and help businesses impacted by climate change to adapt.
• Major biodiversity loss and ecosystem collapse (land or ocean): Irreversible consequences for the environment, resulting in severely depleted resources for humankind as well as industries.
 WEF (World Economic Forum). The Global Risks Report 2016. 11th edition. Available as a PDF from http://www3.weforum.org/docs/Media/TheGlobalRisksReport2016.pdf.
 WEF (World Economic Forum). The Global Risks Report 2017, Executive Summary. http://reports.weforum.org/global-risks-2017/executive-summary/.
 Frankfurt School-UNEP (United Nations Environment Programme) Centre and BNEF (Bloomberg New Energy Finance). Global Trends in Renewable Energy Investment 2016. Frankfurt am Main: Frankfurt School-UNEP Centre/BNEF. Available as a PDF from http://fs-unep-centre.org/sites/default/files/publications/globaltrendsinrenewableenergyinvestment2016lowres_0.pdf.
 IEA (International Energy Agency). World Energy Investment 2016. “Global energy investment down 8% in 2015 with flows signalling move towards cleaner energy.” Press Release, September 2016. https://www.iea.org/investment/.
 United Nations Framework Convention on Climate Change, Marrakech Action Proclamation For Our Climate and Sustainable Development, November 2016. Available as a a PDF from https://unfccc.int/files/meetings/marrakech_nov_2016/application/pdf/marrakech_action_proclamation.pdf.
 UNEP (United Nations Environment Programme). 2016. “Reducing Hydrofluorocarbons via the Montreal Protocol is the most significant climate action the world can take this year.” UNEP News Centre Press Release, 22 July 2016. http://www.unep.org/newscentre/reducing-hydrofluorocarbons-montreal-protocol-most-significant-climate-action-world-can-take-year.
 UNEP (United Nations Environment Programme). 2016. The Emissions Gap Report 2016. A UNEP Synthesis Report. Nairobi: UNEP. http://www.unep.org/emissionsgap/resources.
 WMO (World Meteorological Organisation), Provisional WMO Statement on the Status of the Global Climate in 2016, 14 November 2016. http://public.wmo.int/en/media/press-release/provisional-wmo-statement-status-of-global-climate-2016.
 NOAA (National Oceanic and Atmospheric Administration). 2016. “August marks ongoing trend of record-breaking heat for the globe.” 20 September 2016. http://www.noaa.gov/news/august-marks-ongoing-trend-of-record-breaking-heat-for-globe.
 IPCC (Intergovernmental Panel on Climate Change). 2014. Climate Change 2014 Synthesis Report: Summary for Policymakers. Available as a PDF from https://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf.
 Coral Reef Studies. 2016. “Scientists assess bleaching damage on Great Barrier Reef.” Media Release, 26 October 2016. https://www.coralcoe.org.au/media-releases/scientists-assess-bleaching-damage-on-great-barrier-reef.
 CRED (Centre for Research on the Epidemiology of Disasters). 2016. “2015 disasters in numbers.” January 2016. Available as a PDF from http://cred.be/sites/default/files/2015_DisastersInNumbers.pdf.
 Climate Home. 2014. “Fiji village relocated under climate change programme.” Climate Home News, 17 January 2014. http://www.climatechangenews.com/2014/01/17/fiji-village-relocated-under-climate-change-programme/.
 Malo, S. 2016. “U.S. village in Alaska votes to relocate due to climate change.” Thomson Reuters Foundation News, 18 August 2016. http://news.trust.org/item/20160818170210-noope/.
 Chapman, P. 2012. “Entire nation of Kiribati to be relocated over rising sea level threat.” The Telegraph, 7 March 2012. http://www.telegraph.co.uk/news/worldnews/australiaandthepacific/kiribati/9127576/Entire-nation-of-Kiribati-to-be-relocated-overrising-sea-level-threat.html.
Graphic © The World Economic Forum. Reproduced with kind permission.