Revamping government regulation and market structures in a short time – to meet ambitious net-zero carbon targets such as Britain’s 2050 goal – could potentially disrupt business, society and the economy.
“If you have to try to make 20 years of progress in 10 years, or 50 years of progress in 20 years, it certainly makes it that much harder and more of a severe policy change,” Mr Drzik said.
“You could see that type of challenge, given that there hasn’t been sufficient progress on some of these issues to date.”
There’s also trouble on the home front. Popular discontent with politicians could bind leaders’ hands if the “darkening economic outlook” deteriorates further, the report warned.
“Disapproval of how governments are addressing profound economic and social issues has sparked protests throughout the world, potentially weakening the ability of governments to take decisive action should a downturn occur,” the report said.
“Countries could lack the financial resources, fiscal margin, political capital or social support needed to confront key global risks.”
In an unprecedented finding, the top five risks for the next decade by likelihood – as ranked by the business leaders, senior bureaucrats, academics and NGO executives who responded to the survey – were all environmental.
These were: extreme and damaging weather events; failure of governments and businesses to mitigate and adapt to climate change; human-made environmental disasters; biodiversity loss and ecosystem collapse; and major natural disasters.
For the immediate year ahead, more than three-quarters of respondents viewed it as likely that there’d be increased risk of economic confrontation, domestic political polarisation, extreme heatwaves, ecosystem destruction and cyber attacks.
Davos hots up
The report typically forms a curtain-raiser to the WEF’s annual convocation of the global business and political elite in the Swiss ski resort of Davos, a week-long jamboree that starts next Tuesday.
Donald Trump will return to Davos after skipping the 2019 event. AP
The WEF has a theme of “cohesion and sustainability” in pursuit of solutions to global challenges such as climate change, industrial transformation, technological evolution and demographic shifts.
“The political landscape is polarised, sea levels are rising and climate fires are burning,” said WEF president Borge Brende.
“This is the year when world leaders must work with all sectors of society to repair and reinvigorate our systems of cooperation, not just for short-term benefit but for tackling our deep-rooted risks.”
The focus will inevitably be on that most polarising of leaders, US President Donald Trump, who is scheduled to attend the Davos summit this year along with his Treasury Secretary Steve Mnuchin, Trade Representative Robert Lighthizer and family advisers Ivanka Trump and Jared Kushner.
John Drzik, chairman of Marsh & McLennan Insights.
Swedish climate activist Greta Thunberg will also return to Davos, and Australia’s bushfire crisis will likely feature heavily in discussions on climate change. The Australian government will be represented by Finance Minister Matthias Cormann.
The report, compiled for the WEF by two global insurance giants – brokerage Marsh & McLennan, and insurer Zurich – also fretted about the impact of geopolitical rivalries on technology governance, as the world lurches towards a Balkanised internet.
“You have the US-China decoupling in terms of greater restrictions on investment in sensitive tech sectors,” Mr Drzik said. “That creates these two blocs and takes what would be a global architecture in some areas, bifurcating or separating that into regional architectures which create their own inefficiencies and risks.”