Expedite green energy and nature efforts in face of cost-of-living crisis, WEF implores leaders

The report warns that the present economic downturn could hinder environmental action, storing up more risk for the future

Published ahead of its annual summit convening world leaders and businesses in Davos, Switzerland, next week, the WEF’s 2023 global risks report details 1,200+ experts’ views on the biggest issues facing the world at present and those on the horizon.

The report names the cost-of-living crisis as the most severe global risk for the coming two-year period. Severity is measured in terms of likelihood and predicted depth of impact.

The report makes clear the intersections between environmental risks and social and geopolitical risks, with environmental issues accounting for half of the top 10 risks for the near-term named n the report.

Second to the rising cost of living is the increased frequency and severity of natural disasters. 2022 will doubtless be remembered for extreme weather in all parts of the world, from flooding in Pakistan that impacted more than 33 million people; to unseasonably warm and dry weather in India that resulted in a wheat export ban; to summer drought in Europe, Mexico and China; to Typhoon Noru in the Philippines and Typhoon Nanmadol in Japan; to the recent “historic lake-effect snowstorm” in New York, US.

Research published this week by the US National Oceanic and Atmospheric Administration (Noaa) concluded that many of these events were made more likely and more severe by rising global temperatures and associated changing weather patterns. In some cases, the researchers found, they would have been near impossible with no man-made global warming.

The WEF deemed extreme weather risks the top short-term global risk in its 2022 edition of the global risks report.

Climate risks on the horizon

As several editions of the report have stated previously, the new 2023 edition reiterates that risks related to the climate and nature crises, plus the over-exploitation of natural resources, are the most likely over the coming decade.

When the experts were asked to rank the likelihood and likely severity of a range of risks over this time period, the failure to mitigate climate change came out on top. The UN stated in the build-up to COP27 last year that emissions reduction and removal plans from nations, if delivered in full, would result in 2.5C of warming by 2100, breaching the Paris Agreement. Pledges have never been delivered in full so far, so a greater degree of warming is likely.

Four of the top five risks named for the 10-year period are related to the environment. In second place is a failure to deliver adequate climate adaptation.

Third on the WEF’s 10-year list this time around are natural disasters and extreme weather events, followed by biodiversity loss and the collapse of ecosystems. The 2022 Living Planet report confirmed that the average population size decline for wildlife globally has been 69% since 1970, excluding insects.

The fifth issue, large-scale involuntary migration, is classed as societal but has an environmental link. There are few instances of migration so far in which climate change has been the sole factor, but this is likely to change as physical impacts worsen. Moreover, it can be a contributing factor, along with factors like conflict and economic downturn – which, themselves, can result from environmental issues.

Also included in the WEF’s top ten for the 10-year list are natural resource crises (sixth) and large-scale environmental damage incidents (tenth).

“The interplay between climate change impacts, biodiversity loss, food security and natural resource consumption is a dangerous cocktail,” said Zurich Insurance Group’s head of sustainability risk John Scott, a contributor to the report.

“Without significant policy change or investments, this mix will accelerate ecosystem collapse, threaten food supplies, amplify the impacts of natural disasters and limit further climate mitigation progress.”

Investing in joined-up solutions now

The WEF is warning that the “compounding effect of other risks – including pandemic-related issues, the conflict in Europe, energy security threats and inflation and economic headwinds – may hinder climate mitigation progress in the near term and over the coming decade, leading to biodiversity loss and environmental breakdowns”.

It added: “Already, short-term geo-economic risks are putting net-zero commitments to the test and have exposed a gap between what is scientifically necessary and politically palatable.”

To ensure that climate mitigation and adaptation progress continues, accelerates and scales, the WEF is calling on nations and on the private sector to bring forward increased investment in environmental sustainability. It names the energy transition (energy efficiency, energy access, clean and affordable energy) as a key focus area for the near-term. This presents an opportunity for social benefits also, including reduced fuel poverty.

While investment in clean energy has been scaling up, the WEF states, with governments and private bodies increasing commitments against a backdrop of high gas prices, the report summarises that the energy transition is not currently happening rapidly enough globally.

For medium and long-term climate and environmental risks, the WEF is recommending that leaders put in more groundwork now to avoid risks in the coming decade and beyond. Its report states that investment in climate adaptation, including nature conservation and restoration, need to be scaled up now rather than later. It recommends public-private cooperation on these issues as scientific understanding improves and as physical impacts worsen.

“Climate and human development must be at the core of concerns of global leaders to boost resilience against future shocks,” summarised the WEF’s managing director Saadia Zahidi.

The WEF’s Davos conference is scheduled to begin on Monday (16 January) and conclude on Friday (20 January). Follow edie next week for all the key sustainable business news from the conference.