Full report
Published: 10 January 2024

Global Risks Report 2024

Responding to global risks

The previous chapters outlined a global landscape where a myriad of vulnerabilities are stretching our capacity to respond to key global challenges. This chapter considers the ways in which we can address global risks, given increasingly complex and non-linear aspects of how they will evolve, against a backdrop of a fragmented geopolitical environment where cooperation may be in short supply.

Managing a volatile risk landscape in a low cooperation world

Some of the challenges we face are risks familiar to human history – pandemics and geopolitical conflicts – while others are new and fast-evolving, such as Earth system changes or the adverse effects of new technologies. Many global risks are inherently interconnected and may have far reaching consequences to human development - eroding resilience and reducing our collective capacity to respond.

While collaborative effort remains the cornerstone of addressing global risks, not all require deep global cooperation as the only viable solution. In an increasingly fragmented world, examining alternative paths with varying degrees of cooperation can provide a broader mental model to support planning and preparation.

Implementing global risk reduction measures is equivalent to providing a global public good.[i] These goods are defined as non-excludable and non-rivalrous, which means that, unlike common goods, use by one country neither prevents access nor reduces availability to others. For example, if a single national government implements a policy that slows the spread of an infectious disease, the entire global community will benefit from it.

As with global public goods, risk reduction efforts tend to suffer from the “free rider problem.” In a world characterized by different and at times competing power centres pursuing their own interests, governments may be incentivized to transfer the burden of prevention or preparedness to others, while reaping the benefits of others’ investments without incurring the costs. Similarly, not all efforts of risk reduction require the same level of cooperation to be implemented, falling along a spectrum ranging from those that require the effort of only one country or stakeholder, to those that demand the collaboration of all.[ii]

Building upon established notions of public goods,[iii] there are four broad categories of approaching global risk reduction, based on the level of cooperation required: localized strategies; breakthrough endeavors; collective actions; and cross-border coordination.

Both the degree of complexity and the speed of the global risks discussed in this report will demand flexible and agile approaches that employ all available levers at our disposal. There are actions that can be taken individually or collectively to implement preparedness measures for the risks we cannot avoid – and to come together to prevent or lessen the likelihood of the risks that we can.

3.1 Localized strategies

Localized strategies that address global risks at a local level require little or no cross-border coordination. They are concerned mainly with increasing a community's preparedness to bear the effects of inevitable global risks, but do not significantly mitigate their impact beyond national borders.

With looming urgency to adapt to avoid the worst impacts of a changing climate, local measures present a relatively agile response to risk, unencumbered by lengthy processes that are common to global agreements. Measures range from instigating more resilient building codes to making investments in wildfire management, flood defenses and heatwave mitigation. Infrastructure investment can also enhance a country’s preparedness to tackle pandemics. When COVID-19 hit, it was the capacity of national health systems – i.e., availability of hospital beds, intensive care units and medical personnel – that largely dictated its local impact. While localized strategies are generally associated with boosting preparedness, there are some cases where they prevent global risks from materializing altogether. Local compliance with vaccine guidance, for example, can eliminate diseases such as polio.

There are several global risk governance approaches highlighted within the GRPS that would fall under local measures: Public awareness and education, Financial instruments and National and local regulations. Public awareness and education initiatives can be effective in reducing the impact of AI-enabled misinformation on local media environments. While it is difficult for single countries to control the diffusion of AI-generated content, it is in their power to include AI-literacy in public education systems and to prioritize the issues of understanding AI’s capabilities and identifying trustworthy sources of information. Financial instruments – including insurance, catastrophe bonds or public-risk pools – can alleviate the effects of natural disasters and geoeconomic shocks, while social safety nets and pensions represent important tools in managing longer-term risks associated with demographic trends and societal polarization.

National and local regulations are identified by the majority of GRPS respondents as key for driving action on a number of economic risks (Figure 3.1). Appropriate fiscal and monetary policies are employed to control Inflation and build resilience against Asset bubble bursts. National governments also have the power to act against Illicit economic activity and reduce their countries’ vulnerability to organized crime. Protection against Biodiversity loss and ecosystem collapse as well as Pollution can also be managed via local or national environmental regulation.

Localized strategies can be enacted independently, and thus face fewer hurdles in terms of cooperation requirements. However, they are not free from challenges. Investment to boost resilience is costly and not all countries or jurisdictions have the same resources, technology and capacity. In an environment of rising costs and narrow approaches to international investment, the capacity and financing for implementing effective local measures tend to be more concentrated in higher-income countries, perpetuating rather than addressing inequality. They may also have unintended spillover effects across borders; for example, economic levers to tackle inflation in one economy can lead to debt concerns in another (Chapter 1.5: Economic uncertainty).

The public and private sectors, alone and in partnership, can play a role in scaling local responses, bringing down costs and expanding risk reduction capabilities to all. Businesses are key developers, testers and early adopters of new technologies, such as foods that rapidly grow in extremely adverse environments or AI tools to spot nascent wildfires.[iv] Likewise, governments have the ability to step in and de-risk investments to help close the gap in economic opportunity and bolster resilience (Chapter 2.5: End of development?). Novel approaches to ownership of local infrastructure, involving regulator intervention and community ownership, can allow projects to become more bankable, feasible and targeted, while local action groups can often mobilize effective disaster response as well as direct funds to prevention.[v]

3.2 Breakthrough endeavors

In some cases, the action of an individual or entity can be enough to provide a “breakthrough” development to address risk or to serve as the positive tipping point to an alternate “safe state.” These breakthrough endeavors are as equally relevant for preventing or mitigating the likelihood of risk as they are for lessening the impact.

Many breakthrough endeavors fall under the approach of Research & development (R&D), encompassing activities such as medical breakthroughs, new technologies or a novel approach to quantifying and governing risk. A prominent example of the latter is the formation of the Intergovernmental Panel on Climate Change (IPCC) by the United Nations Environment Programme and the World Meteorological Association in 1988, endorsed by the UN the same year. There are also examples of industrial transformations that have pivoted based on a single idea or action, such as the targeted effort of eliminating chlorofluorocarbons (CFCs) to protect the ozone layer, resulting in a significant impact on a global problem.

GRPS respondents note that R&D can play a key role in addressing health, environmental and technological risks (Figure 3.2). During the COVID-19 pandemic, the concentrated efforts of a few pharmaceutical companies made a difference for the global community. Supported by significant funding from governments, their innovations to develop a novel vaccine in record time was crucial to lowering death rates, demonstrating the immense potential of scientific breakthroughs on reducing the impact of health-related risks like Infectious diseases.

R&D can boost preparedness for inevitable environmental risks such as Extreme weather events and Non-weather related natural disasters, as well as allowing us to reduce the likelihood of Critical changes to Earth systems and Natural resources shortages. A significant leap forward in research leading to viable nuclear fusion power generation for example, could represent a turning point, providing clean energy and accelerating the transition to Net Zero, at the same time as reducing the risk of Pollution.[vi] As discussed in Chapter 2.3 A 3oC world, however, the unilateral application of climate mitigation technologies also carry risks.

There are other hurdles to overcome. Despite potentially being on the precipice of a “golden age” of scientific discovery, the strategic importance of emerging technologies, such as AI and quantum computing, is resulting in a fragmentation of R&D initiatives, with some opting for political isolationism to safeguard technological advancements. The formation of a new body equivalent to the IPCC to synthesize key perspectives relating to AI risk has been mooted; to be effective, it would need to overcome the challenges of ensuring balance of representation and of being nimble enough to address rapidly emerging scientific developments. And while R&D can result in game-changing solutions, the institutions involved often lack the funds or political might needed to translate into impact. With carbon capture and storage (CCS) for example, the sheer scale of the costs associated with deployment act as barriers, alongside limited confidence in the success of the outcomes.

Technology is seen as both a source of risk and as part of the solution. Adverse outcomes of AI technologies is viewed as a top risk that can be addressed by R&D. However, AI may also prove to be the key to unlocking a multitude of the world’s problems. Recent research, for example, suggests that it could revolutionize materials science, allowing us to make leaps forward in terms of batteries, solar panels, computer chips and other vital technologies that will be required in efforts to address a multitude of risks.[vii]

Strengthening global research networks that connect researchers, institutions and industries worldwide can facilitate communication and the sharing of resources. Public-sector support remains crucial. Healthcare companies alone would not have been able to roll out an effective vaccine for COVID-19 in such a short time frame had they not been co-funded, and this model of governments de-risking liability to fast-track deployment could be extended to other challenges, potentially coupled with enhanced conditionalities to ensure returns are more equally shared. Fiscal incentives can be deployed to encourage further innovation within the private sector, while acceptance of new technologies and approaches would be bolstered by governance and oversight. The role of philanthropy should also not be overlooked as a key source of funding for ambitious projects to eradicate disease and boost climate resilience, for example.[viii]

Policy-makers need to adopt a dual vision, harnessing the power of innovation to address present challenges, while keeping an eye on the future. Investing in breakthrough endeavors is often a long-term bet, involving some degree of risk-taking and failure, but coupled with wins that boost our ability to mitigate or adapt in the face of global risks.

3.3 Collective actions

When the sum of individual actions are directed towards a common goal, change can be effected on a global scale. Collective action is not the result of collaboration, but of the aggregate and independent effort of single citizens, companies and countries.

Examples include expanding the adoption of a vegetarian diet or reducing combustion-engine cars and air travel to slash carbon emissions. These changes in lifestyle or consumption patterns are insignificant when pursued by a single individual. But if a material number of people take such actions concurrently, such aggregate efforts have the power to alter market dynamics and move the dial on climate-change mitigation. The same is true for business actions. If a critical number of companies commit to building ethical supply chains, respect for human rights and labour standards will improve worldwide.

Collective action can also play a role in terms of preparing for global risks. Japan’s Community-Based Disaster Risk Management[ix] and Bangladesh’s Cyclone Preparedness Program[x] both demonstrate the power of collective preparedness to address inevitable environmental risks and how communities can be mobilized to mitigate their impacts. Borne out of the necessity to prepare for environmental risks in one of the most seismically active regions in the world, a core component of Japan’s preparedness strategy centres on building momentum for a nationwide movement from local preparedness and resilience measures. Likewise, ensuring rapid dissemination of official cyclone warning signals across communities encourages collective preparedness measures to be implemented along Bangladesh’s coast. Technology can act as an enabler for collective action. Information and communication technologies, including social media, have transformed the speed and the way in which information is shared, and while there are risks associated with this (Chapter 1.3: False information), there are also benefits in terms of mass mobilization for public good.

There are several risk governance approaches identified within the GRPS that would fall under collective action: Public awareness and education, Multistakeholder engagement, and Corporate strategies. Public awareness and education campaigns amplify (grassroot) initiatives that have yet to reach a critical mass in order to make an impact. In some cases, governments have established specific units to effect change through encouraging collective behaviours, such as those to prevent the spread of disease.[xi] Multistakeholder engagement platforms favour knowledge and best practice sharing to support and guide individual efforts towards a common goal.

GRPS respondents recognize Corporate strategies as having the most potential to reduce economic risks relating to financial and labour markets (Figure 3.3). If companies adopt responsible business practices and investment decisions, they will reap reputational and performance benefits[xii] while making the wider economic and financial system more resilient and prepared to face the risk of Economic downturn. Businesses can also contribute to shoring up the labour market, both locally and globally, by addressing Labour shortages and Unemployment risks through investing in skills development, upholding workers’ rights and granting contract security.

In order for collective action to be sufficiently effective, there must be some degree of consensus on the nature and urgency of the risk, the type of action required to address it and the intended outcome. This is no small feat in a world increasingly subject to societal polarization and where short-term cost-of-living pressures continue to bite.

It is crucial therefore to build platforms that set standards and favour knowledge-sharing, channeling individual efforts towards a common goal. Tax incentives can strengthen collective action by business and individuals. Policy-makers can also strengthen regulation on environmental, social and corporate governance (ESG) reporting to ensure transparency on corporate social responsibility strategies. This contributes to creating a positive cycle where investors can recognize and reward the businesses that act, which in turns incentivizes more and more companies to align.

3.4 Cross-border coordination

Cooperation may be constrained in an increasingly fragmented world, but it remains imperative to solve the biggest, most existential risks. Cross-border coordination for risk reduction takes many forms and is typically centred on mitigating likelihood. It ranges from mutual restraint (agreement between two or more parties that possess dangerous capabilities to refrain from using them), to addressing the weakest link in a system (enforcing commitment to minimum standards and guardrails or by investing in a country that has the potential to destabilize others), to international agreements (such as those that aim to limit global warming, maintain security and ensure free trade).

Pressing risks requiring mutual restraint often involve the proliferation and malign use of advanced and potentially destructive technologies. Restraining the use of weapons of mass destruction or restricting the incorporation of AI into lethal weapons and nuclear decision-making systems are needed to avoid the risk of inadvertent conflict escalation (Chapter 2.4: AI in charge).

When it comes to global risks such as terrorism or pandemic outbreaks, it is often the weakest link that dictates the risk. Technological advances in AI mean that bio-engineered pathogens have become a reality, and a security breach of a high-containment bio-laboratory or bio-foundry, for example, is a global concern.

GRPS respondents highlight Minilateral treaties and agreements and Global treaties and agreements as risk governance approaches within the category of cross-border coordination. Minilateral treaties – or agreements involving a smaller number of parties and often backed by regional financing – represent a feasible solution to many global risks faced by a fragmented world, where it is difficult to have a large number of countries endorsing the same cause.

Global treaties and agreements, the result of constructive dialogue, negotiation and compromise, are fundamental to mitigating and preparing for many global risks. They enable involved parties to identify common ground and cooperate towards shared objectives. GRPS respondents recognize such treaties as the most appropriate lever to manage key geopolitical risks such as Interstate armed conflict; Geoeconomic confrontation; and Biological, chemical or nuclear hazards; as well as inherently globalized environmental risks such as Critical changes to Earth systems (Figure 3.4).

Amid growing geopolitical rifts, global treaties and agreements face numerous challenges. Agreements regarding global trade and financial integration are under pressure from trade conflicts between China and the United States, Brexit and national post-COVID-19 economic recovery efforts. While there is emerging consensus on the need for a universal regulatory framework for AI to address concerns surrounding ethical standards, data privacy and potential misuse, the first steps in this arena seem to be faltering, with the EU’s landmark AI Act coming under pressure from governments[xiii] and technology companies[xiv] alike. Striking a balance between fostering innovation and addressing ethical concerns within an international framework is proving complicated, given varying perspectives and economic interests.

Yet cross-border coordination remains a necessary – and, in some cases, the only – path to address the global risks that threaten human prosperity and security. Minilateral treaties and agreements may be increasingly appropriate to resolve conflict and ensure economic prosperity at a regional level; but they are unlikely to replace wider agreements in maintaining global security.

Progress has been made through international collaboration in addressing climate change; but action needs to be deepened, widened and, most crucially, sped up. National representatives that attended the 2023 United Nations Climate Change Conference (COP28) approved for the first time a roadmap for “transitioning away from fossil fuels” – but the deal stopped short of a long-demanded call for a “phaseout” of oil, coal and gas.[xv] “Climate Clubs”, or coalitions of the willing,[xvi] represent a practical path for progress given the challenges of traditional multilateralism. These coalitions of countries commit to ambitious climate goals and adopt measures to enforce compliance, while offering incentives for membership.

When it comes to security, much momentum is with the private sector, where applications with dual use potential are being developed.[xvii] As technology evolves faster than regulation, private producers must take responsibility to not only be transparent, but to show restraint when releasing new frontier models.

3.5 Conclusion

The world is undergoing multiple long-term structural transformations: the rise of AI, climate change, a shift in the geopolitical distribution of power, and demographic transitions. These structural forces are global, pervasive and charged with momentum. Against this backdrop, known and newly emerging risks need preparation and mitigation (see Figure 3.5 for the full picture of GRPS responses regarding drivers of risk reduction and preparedness).

Localized strategies, breakthrough endeavours, collective actions and cross-border coordination all play a part in addressing these risks.

Localized strategies, leveraging investment and regulation, are critical for reducing the impact of global risks, and both the public and private sector can play a key role in extending benefits to all. Through prioritizing the future and focusing on breakthrough research and development, the efforts of single entities can make the world a safer place. The actions of individual citizens, companies and countries – while perhaps insignificant on their own – can move the needle on global risk reduction if they reach a critical mass. Finally, cross-border coordination remains the only viable pathway for the most critical risks to human security and prosperity.

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