An increased likelihood for all risks, from the environmental to society, the economy, geopolitics and technology, looks set to shape the global agenda in the coming year, the World Economic Forum’s Global Risks Report 2016 has found.
The Oxford Martin School was an academic advisor on the report, for which 750 experts assessed 29 separate global risks, considering both impact and likelihood over a 10-year time horizon. The risk with the greatest potential impact in 2016 was found to be a failure of climate change mitigation and adaptation. This is the first time since the report was published in 2006 that an environmental risk has topped the ranking. This year, it was considered to have greater potential damage than weapons of mass destruction (2nd), water crises (3rd), large-scale involuntary migration (4th) and severe energy price shock (5th).
The number one risk in 2016 in terms of likelihood, meanwhile, is large-scale involuntary migration, followed by extreme weather events (2nd), failure of climate change mitigation and adaptation (3rd), interstate conflict with regional consequences (4th) and major natural catastrophes (5th). Technological risk, where the highest ranking risk is cyberattack, is in 11th position in both likelihood and impact.
This diverse landscape comes at a time when the toll from global risks would appear to be rising, the WEF says. Warming climate in 2015 is likely to raise the global average surface temperature to the milestone of 1°C above the pre-industrial era for the first time. The number of people forcibly displaced in 2014 stood at 59.5 million according to UNHCR, almost 50% more than in 1940. Data from the report appears to support the increased likelihood of risks across the board, with all 24 of the risks continuously measured since 2014 having increased their likelihood scores in the past three years.
In addition to measuring their likelihood and potential impact, the Global Risks Report 2016 also examines the interconnections among the risks.
“We know climate change is exacerbating other risks such as migration and security, but these are by no means the only interconnections that are rapidly evolving to impact societies, often in unpredictable ways," said Margareta Drzeniek-Hanouz, Head of Global Competitiveness and Risks, World Economic Forum. "Mitigation measures against such risks are important, but adaptation is vital."
The Global Risks Report 2016 was developed with the support of WEF Strategic Partners Marsh & McLennan Companies and Zurich Insurance Group. As well as the Oxford Martin School, the academic advisers included the National University of Singapore, the Wharton Risk Management and Decision Processes Center (University of Pennsylvania).
The report's Advisory Board includes Julian Laird, the Oxford Martin School's Director of Policy and Development, Dr Anders Sandberg, James Martin Fellow on the Oxford Martin Programme on the Impacts of Future Technology, and Pascal Lamy, former Director-General of the World Trade Organization and Chair of the Oxford Martin Commission for Future Generations.