Climate change again tops ranking of global concerns as pandemic subsides

The climate crisis was already topping the survey prior to the advent of the Covid-19 pandemic in 2020. But with the global economy slowly recovering from the impact of the virus, climate concerns have topped the Global Risks Report once again.

Between 2017 and 2019, weapons of mass destruction were the biggest concern among polled experts as North Korea ramped up its nuclear programme.

The WEF said the most frequently documented risks associated with climate action failure are physical risks, such as an increase in the frequency and severity of severe weather.

But the risks linked to the transition to a net-zero future are also getting more attention. The report claims that a “disorderly transition” would have wide impacts businesses that could cause significant economic volatility and potentially even destabilise the financial system.

The recent COP26 conference in Glasgow saw countries make additional pledges to undertake measures designed to lower their carbon emissions faster than before.

But despite the optimism surrounding the new pledges, they still fall short of the 1.5°C goal set out in the Paris Agreement. The current pledges steer the world towards 2.4°C warming, with even the most optimistic scenarios only achieving 1.8°C.

“The climate crisis remains the biggest long-term threat facing humanity,” said Peter Giger, chief risk officer at Zurich Insurance Group.

“Failure to act on climate change could shrink global GDP by one-sixth and the commitments taken at Cop26 are still not enough to achieve the 1.5C goal.

“It is not too late for governments and businesses to act on the risks they face and to drive an innovative, determined and inclusive transition that protects economies and people.”

The WEF added that unless tangible and effective climate action is taken globally in the next 12-18 months, there will be pressure to rush through actions later in the decade, potentially with a raft of new policies that could prove to have harsh, economy-wide implications to meet the tight deadlines.

The changes will require the introduction of new economic policies and fresh regulations that affect not only supply-side, but also influence demand-destruction for carbon-intensive goods and services.

Demand-destruction measures are likely to include redirecting subsidies away from fossil fuels to low-carbon technologies and rolling out new building regulations that demand the use of low-carbon building materials.

“Health and economic disruptions are compounding social cleavages,” said WEF managing director Saadia Zahidi.

“This is creating tensions at a time when collaboration within societies and among the international community will be fundamental to ensure a more even and rapid global recovery.

“Global leaders must come together and adopt a coordinated multi-stakeholder approach to tackle unrelenting global challenges and build resilience ahead of the next crisis.”