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Climate risks jostle with pandemic as fractured world struggles to respond, WEF says

Over the coming decade, the next major problem the world faces after COVID-19 remains climate change, said the World Economic Forum. Image of a flooded town in Isabela, Philippines, via PHILSTAR/MICHAEL VARCAS

LONDON — Failure to stem climate change poses as serious a global risk as the coronavirus disease 2019 (COVID-19) pandemic, in both the scale of impact and level of threat, top business and other leaders warned on Tuesday.

In addition, worsening political polarization, inequality, and loss of social cohesion could undermine recovery from the pandemic and action to tackle global warming, they said.

Those pressures “will bring long-term consequences”, noted Borge Brende, president of the World Economic Forum (WEF), which released its annual global risk survey on Tuesday.

“Even if you see some light at the end of the tunnel (with the pandemic), there are still huge risks connected to the polarized and fractured world,” he told an online event just two weeks after armed protesters stormed the US Capitol.

The WEF survey of business, political, and other global leaders found that COVID-19, a jobs crisis, and extreme weather are expected to be the most serious risks facing the world in the next two years, followed by cybersecurity threats and digital inequality.

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The top risks for the next 5-10 years included state collapse, the failure of social security systems, technology advances–such as biological tools that could be used to alter pathogens or planetary geoengineering to curb climate change–and environmental stresses like biodiversity loss.

The findings show a clear need for a new economic model that is more inclusive, greener, and offers better social safety nets, said Saadia Zahidi, a managing director at the WEF.

Over the coming decade, the next major problem the world faces after COVID-19 remains climate change, she noted.

“There is no vaccine for this,” she said. “There are only the actions today we can take to build more sustainable economies.”

The global economy is seeing one of its biggest peacetime slumps as a result of the novel coronavirus, with 150 million people expected to fall into extreme poverty–the first rise in two decades, Mr. Brende said.

About $12 trillion in announced pandemic stimulus spending around the globe–the most since World War II–aims to halt the economic slide, he said.

But it is unlikely to make a lasting difference unless the money is spent on building future resilience, including through measures to develop green, low-carbon economies and broaden digital access, he added.

Peter Giger, chief risk officer for Zurich Insurance Group and a contributor to the report, said improving resilience to both expected and unexpected threats would require rethinking economies optimized for maximum profit in stable conditions.

The current approach is “very short-sighted,” suggesting investments in more robust systems would easily pay for themselves, he said.

“It’s always cheaper to build the dam than pay for the flood,” he said.

Carolina Klint, who focuses on risks in Europe for global insurance broker Marsh, said companies needed to overcome fears that spending on resilience was inefficient or too expensive.

“2020 left us with a renewed appreciation of risk”–and how threats once thought unlikely or distant can quickly become an immediate problem, she noted.

The next big global challenge “won’t be a pandemic–it will be something else.” she warned. — Laurie Goering/Reuters

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