The Global Risks
Report 2020

Insight Report

15th Edition

In partnership with Marsh & McLennan and Zurich Insurance GroupFailed andfailing states

Oil price shock

Chronic
diseases

Oil price shock

China hardlanding

Blow up in
asset prices

2nd

4th

5th

China hardlanding

Oil price shock

Interstateand civil wars

Pandemics

Pandemics

Deglobalization(developed)

Deglobalization

Oil price shock

Blow up in
asset prices

Blow up in
asset prices

2008

Fiscal crises

Chronic
diseases

Oil and gas
price spike

Deglobalization(developed)

Asset pricecollapse2009

Deglobalization(emerging)

Globalgovernance
gaps

Chronic
diseases

China economic
slowdown

2010

2011

Asset pricecollapse

Energyprice volatility

Chronic
diseaseFiscal crises

Economic

Geopoliticalconflict

Climate change

Fiscal crises

2011

Oil price spikes

Deglobalization(developed)

Asset pricecollapse

2010

Climate change

Biodiversity loss

Fiscal crises

Globalgovernancegaps

Corruption

Flooding

Storms andcyclones

Chronic
diseaseChina economic
slowdown

Asset pricecollapse

2012

2013

Environmental

Energyprice volatility

Fiscalimbalances

Food crises

Water crises

Financial failure

2012

Water crises

2014

Infrastructure
breakdown

Unemployment

Water crises

Climate action
failureFiscal crises

2014

Cyberattacks

Climate action
failureUnemployment

Extremeweather

Incomedisparity

Geopolitical

Climate action
failureWeapons ofmass
destruction

Fiscalimbalances

Water crises

Financial failure

2013

Population
ageingWater crises

Greenhousegas emissions

Greenhouse gas
emissions

Cyberattacks

Fiscalimbalances

Income disparity

Fiscalimbalances

Income disparity

2015

Societal

Climate action
failureInterstate
conflict

Weapons ofmass
destruction

Infectious
diseases

Water crises

2015

Unemployment

State collapse
or crisis

Failure ofnational
governance

ExtremeweatherInterstate
conflict

2016

2017

Technological

Energy priceshock

Involuntary
migration

Water crises

Weapons ofmass
destruction

Climate action
failure2016

Naturalcatastrophes

Climate action
failureNaturaldisasters

Water crises

Extremeweather

Weapons ofmass
destruction

2017

Data fraud
or theft

Terroristattacks

Naturaldisasters

Climate action
failureInterstate
conflict

Involuntary
migration

Extremeweather

Extremeweather

Involuntary
migration

2018

Naturaldisasters

Water crises

Climate action
failureWater crises

Extremeweather

Climate action
failureWeapons ofmass
destruction

2019

Cyberattacks

Data fraud
or theft

Naturaldisasters

Water crises

Extremeweather

Biodiversity loss

Weapons ofmass
destruction

Climate action
failure2020

Human-madeenvironmental
disasters

Biodiversity loss

Naturaldisasters

Climate action
failureClimate action
failure2020
Extremeweather

2019
Extremeweather

Naturaldisasters

Extremeweather

Weapons ofmass
destruction

2018

Climate action
failureData fraud
or theft

Cyberattacks

Naturaldisasters

Extremeweather

Source: World Economic Forum 2007-2020, Global Risks Reports.
Note: Global risks may not be strictly comparable across years, as definitions and the set of global risks have evolved with new issues emerging on the 10-year horizon. For example, cyberattacks, income disparity and unemployment entered the set of global risks in 2012.
Some global risks have been reclassified: water crises and income disparity were recategorized as societal risks in the 2015 and 2014 Global Risks Reports, respectively.

5th

4th

3rd

2nd

1st

2007

2009

Asset pricecollapse

Top 5 Global Risks in Terms of Impact

3rd

Middle Eastinstability

Chronic
diseases

1st

2008

Blow up in
asset prices

Infrastructure
breakdown

2007

Top 5 Global Risks in Terms of Likelihood

Figure I: The Evolving Risks Landscape, 2007–2020

The Global Risks Landscape 2020

Figure II: The Global Risks Landscape 2020

4.0

ClimateC
limate aactionction
ffailure
ailureWeaponsWeapons o
off m
mass
ass
destruction
destruction

Biodiversity lloss
Biodiversity
ossExtreme weather
Extremeweather

Water cWater
crisesrises

Information
Information
iinfrastructurenfrastructure
breakdownb
reakdown

Human-madeHuman-madeenvironmental
disasters
environmental disaster

Infectious d
Infectious
diseasesiseasesGlobalG
lobal ggovernanceovernance
failurefailureInterstate
Interstate
conflictconfl
fliictFood cFoodcrisesrises

3.5

Natural disasters
Naturaldisasters

Cyberattacks
Cyberattacks

F
Financial
inancial ffailurea i lu r e

3.47
averageF
Fiscaliscal crises
crisesUnemployment
U n e mp l o y me n t

State ccollapseStateollapseAsset bubbles
Assetb u b b leSocialSocial instability
instability

CriticalCritical infrastructure
infrastructure
ffailurea ilu reTerrorist
Terrorist attacks
attacks

Involuntary m
Involuntary
migration
igration

2.5

Data fraud
Data
fraud oorr ttheft
heft

NationalNationalgovernancegovernance
failurefailureAdverseAdverse technological
technologicaladvances
advances

EnergyEnergy priceprice shocks h oc k

Unmanageable inflation
Unmanageable
infl
fla
ation

3.0

ImpactFailure ofurban planning

Deflation
IllicitIllicit ttrade
ra d e

2.5

3.0

3.5
3.31
average

Likelihood
Top 10 risks in terms ofLikelihood

Top 10 risks in terms of

Impact1

Extreme weather

1

Climate action failure

2

Climate action failure

2

Weapons of mass destruction

3

Natural disasters

3

Biodiversity loss

4

Biodiversity loss

4

Extreme weather

5

Human-made environmental disasters

5

Water crises

6

Data fraud or theft

6

Information infrastructure breakdown

7

Cyberattacks

7

Natural disasters

8

Water crises

8

Cyberattacks

9

Global governance failure

9

Human-made environmental disasters

10

Asset bubbles

10

Infectious diseases

Source: World Economic Forum Global Risks
Source: World
Perception
Survey Economic
2019–2020.Forum Global Risks

Perception Survey 2019–2020.

4.0
5.0

plotted
area

1.0

5.0

Categories
Economic
Environmental
GeopoliticalSocietalTechnologicalNote: Survey respondents were asked to assess the likelihood of the individual global risk on a scale ofNote: Survey respondents were asked to assess the likelihood of the individual global risk on a scale of 1 to 5, 1
1representing
to 5, 1 representing
a risk that is very unlikely to happen and 5 a risk that is very likely to occur. Theya risk that is very unlikely to happen and 5 a risk that is very likely to occur. They also assess the impact
also
assessed
theonimpact
each
globalriskimpact,
on a scale
ofimpact,
1 to 5,3:1moderate
representing
minimalimpactandand 5 aon eachglobal riska scale ofof 1
to 5 (1:minimal
2: minor
impact,a 4:
severe impact
catastrophic
legibility,
thedetails.
names
the legibility,
global risks
are abbreviated;
seeareAppendix A for
5: catastrophicimpact.
impact). To
Seeensure
Appendix
B for more
To ofensurethe namesof the global risks
abbreviated;
Appendix
A for the full name and description.
thefull namesee
anddescription.

The Global Shapers Risks Landscape 2020

Figure III: The Global Shapers Risk Landscape 2020

Economic

Environmental
Biodiversity
loss

Climateaction failure

Extremeweather

Human-madeenvironmental
disasters

4.0
Financial
failureUnmanageableinflation

Criticalinfrastructure
failure

3.5

4.0

4.

Unemployment
Fiscal crises
Asset bubbles

3.5

Energy price shock
Deflation

Natural disasters

Illicit trade

3.0

Impact

3.0

2.5

3.0

Likelihood

3.5

4.0

2.5

3.0

Geopolitical

3.5

Societal
Water crises

Weapons ofmass destruction
Infectious
diseases

4.0
TerroristattacksStatecollapse

4.0

4.0Interstate
conflict
Global governance failure
National
governance
failure

3.5

3.

Food
crises3.5

Social instability

3.0

Impact3.0

Failure ofurban planning

Involuntary
migration

2.5

Likelihood

3.0

3.5

4.0

Information
infrastructure
breakdown

3.0

3.5

4.0

Respondents

Technological

4.0

2.5

Cyberattacks

Multistakeholder

Data fraud or theft

3.5
Adversetechnologicaladvances

ShapersThe
Global Shapers
Shapers Community
Communityisisthe
theWorld
World
The Global
Economic
Forum’s network
networkof
ofyoung
youngpeople
peopleEconomic Forum’s
driving
dialogue, action
actionandandchange.
change.
driving dialogue,

Source: World Economic Forum Global Risks Perception Survey 2019–2020.
Note: We applied the same completion thresholds to survey responses from the
Global Shapers as to the multi-stakeholder sample (see Appendix B: Global Risks

3.0

ImpactNote:
We applied the same completion thresholds to survey responses from thePerception Survey and Methodology).
Global Shapers as to the multistakeholder sample (see Appendix B: Global Risks
Perception
Surveyand Methodology).
We received 236
responses
for Part 1 “The World in 2020” and 190 for Part 2“Assessment of Global Risks”. The data for Part 3 “Global Risk Interconnections”

2.5

Likelihood

3.0

3.5

4.0

was received
not used. 236 responses for Part 1 “The World in 2020” and 190 for Part 2
We“Assessment of Global Risks”. The data for Part 3 “Global Risk Interconnections”
were not used.

3.

Figure IV: The Global Risks Interconnections Map 2020

The Global Risks Interconnections Map 2020

Natural dNaturaldisasters
isasters.0E
Extremextreme w
weathereatherHuman-madeHuman-madeenvironmental disasterenvironmental
disasters

Infectious diseases
Infectious
diseases

Food cFoodcrisesrises

B
Biodiversity
iodiversity lloss
ossF
Failureailure o
off
u
urban
rban planningplanning

Water cWater
crisesrises.5

Average

ClimateC
limate action
actionfailurefailureCriticalCritical infrastructure
infrastructure
failurefailure3.47

Involuntary
Involuntary migration
migration

IInformation
nformation
iinfrastructurenfrastructure
breakdown
breakdownG
lobal
Globalggovernanceovernance
ffailure
ailureCyberattacks
Cyberattacks

WeaponsWeapons ofof massmassddestruction
estruction

IInterstatenterstatecconflictonfl
fliictNational
National
governancegovernance
failurefailureIllicitIllicit trade
trade

SocialSocial instability
instability

Terrorist attacks
Terroristattacks

State
State collapse
collapseD
Data
ata fraudfraudo
orr theft
theft

A
Adversedverse ttechnologicalechnologicalaadvances
dvances

Energy price
Energyprice shock
shock

Unemployment
Unemployment

Fiscal crises
FiscalcrisesF
Financial
inancial failure
failure.0

U
Unmanageable
nmanageable iinflationnfla
flationDeflation
Defl
fla
ation

Asset
Assetbubbles
bubble2.5

3.0

Likelihood
Economic
Risks

Average
3.32

Geopolitical
Risks
Environmental
Risks

Source: World Economic Forum Global Risks

Source:PerceptionWorld
SurveyEconomic
2019–2020.Forum Global Risks
Perception Survey 2019–2020.

3.5

Technological
Risks

Societal
Risks

4.0

Number and strengthof connections(“weighted degree”)

Note: Survey respondents were asked to select up to six pairs of global risks they believe to be mostNote: Survey respondents were asked to select up to six pairs of global risks they believe to be most interconnected.
interconnected.
Seedetails.
Appendix
B oflegibility,
the fullthe
reportforofmoredetails.
legibility,
the names
See
Appendix B for more
To ensurenames
the global
risks Toare ensure
abbreviated;
see Appendix
A for of theare abbreviated; see Appendix A for the full name and description.
fullglobal
names risks
and descriptions.

The Global Risks
Report 2020
15th Edition

Strategic Partners
Marsh & McLennan
Zurich Insurance Group

Academic Advisers
National University of Singapore
Oxford Martin School, University of Oxford
Wharton Risk Management and Decision Processes Center, University of Pennsylvania

Contents
PrefaceBy Børge Brende

Executive
Summary

4

6

A Decade Left

False Positive

Confronting Runaway
Climate Threat

Health Systems under
New Pressures

In collaboration with the Platform
for Global Public Goods

28

8

The Fraying
Fundamentals

Appendix B: Global Risks Perception
Survey and Methodology

44

Wild Wide Web
Consequences ofDigital Fragmentation
In collaboration with the Platform
for the Fourth Industrial Revolution
and the Platform for Cybersecurity
and Digital Trust

84

Acknowledgements 92

CHAPTER 5

18

72

Appendix A: Descriptions of
Global Risks 2020

Dangers of Accelerated
Biodiversity Loss
In collaboration with the Platform
for Global Public Goods

In collaboration with the Platform
on Health and Healthcare

Appendices

Save the Axolotl

CHAPTER 2

Risks to Economic Stability
and Social Cohesion

CHAPTER 6

CHAPTER 4

CHAPTER 1

Global Risks 2020:
An Unsettled WorldCHAPTER 3

60

Preface
The 15th edition of the World Economic
Forum’s Global Risks Report comes as
long-mounting, interconnected risks arebeing felt. The global economy is facedwith a “synchronized slowdown”, the past
five years have been the warmest on
record, and cyberattacks are expected toincrease this year—all while citizens protest
the political and economic conditions intheir countries and voice concerns aboutsystems that exacerbate inequality. Indeed,
the growing palpability of shared economic,
environmental and societal risks signals thatthe horizon has shortened for preventing—or even mitigating—some of the direst
consequences of global risks. It is soberingthat in the face of this development, when
the challenges before us demand immediatecollective action, fractures within the global
community appear to only be widening.
Global commerce has historically been a pillar
and engine of growth—and a key tool for
lifting economies out of downturns—but as
we warn, significant restrictions were placedon global trade last year. This comes as G20
4Prefaceeconomies hold record high levels of debt
and exhibit relatively low levels of growth.
Ammunition to fight a potential recessionis lacking, and there is a possibility of an
extended low-growth period, akin to the1970s, if lack of coordinated action continues.
In addition, a potential decoupling of theworld’s largest economies, the United States
and China, is cause for further concern. The
question for stakeholders—one that cannot
be answered in the affirmative—is whether
in the face of a prolonged global slowdown
we are positioned in a way that will foster
resiliency and prosperity.
On the environment, we note with grave
concern the consequences of continued
environmental degradation, including
the record pace of species decline.
Respondents to our Global Risks Perception
Survey are also sounding the alarm, ranking
climate change and related environmental
issues as the top five risks in terms oflikelihood—the first time in the survey’s
history that one category has occupied all
five of the top spots. But despite the need tobe more ambitious when it comes to climate
action, the UN has warned that countries
have veered off course when it comes tomeeting their commitments under the Paris
Agreement on climate change.
And on global health and technology, we
caution that international systems havenot kept up to date with the challenges ofthese domains. The global community is
ill-positioned to address vulnerabilities thathave come alongside the advancementsof the 20th century, whether they be thewidening application of artificial intelligenceor the widespread use of antibiotics.
Today’s risk landscape is being shapedin significant measure by an unsettled
geopolitical environment—one in which
new centres of power and influence areforming—as old alliance structures andglobal institutions are being tested. Whilethese changes can create openings for new
partnership structures, in the immediate
term, they are putting stress on systems of
coordination and challenging norms aroundshared responsibility. Unless stakeholders
adapt multilateral mechanisms for thisturbulent period, the risks that were once
on the horizon will continue to arrive.
The good news is that the window for action isstill open, if not for much longer. And, despite
global divisions, we continue to see membersof the business community signal theircommitment to looking beyond their balance
sheets and towards the urgent priorities ahead.

The Global Risks Initiative
It is fitting that this year’s report, whichmakes clear the need for a multistakeholder
approach to mitigating risk, coincides
with the Forum’s 50th anniversary. As theinternational organization for public-private
cooperation, the Forum brings together
leaders from the business, government andnon-profit communities for action-oriented
deliberations and uses the conclusions of
this report to inform its multistakeholder
initiatives throughout the year.
Indeed, the Global Risks Report is itself theresult of a multistakeholder process. I am
grateful for the long-standing relationshipwith our strategic partners, Marsh &McLennan and Zurich Insurance Group,
who offered invaluable input to produce
this publication. I am also grateful to ouracademic partners: the National Universityof Singapore, the Oxford Martin School of
the University of Oxford, and the Wharton
Risk Management and Decision Processes
Center at the University of Pennsylvania.
Over the course of developing the report,
the Forum benefited from a committed
Advisory Board, who shaped the directionof early drafts and provided beneficial
comments and insight throughout thewriting process. The Forum also hosted arange of representatives from the public andprivate sectors in September and Octoberfor discussions in Geneva, New York andWashington, DC, insights from which canbe found in these pages.
The foundation of the report is ourannual Global Risks Perception Survey,
completed by approximately 800 membersof the Forum’s diverse communities. I am
particularly proud that for the first time weare also featuring the results from morethan 200 members of our Global Shapers
Community—a generation of emerging
global social entrepreneurs and leaders.
This younger generation is increasingly
using its digital savviness—and its feet—to
spotlight issues, particularly relating toclimate change, that it sees as existential
risks not only to its generation but to thewider global community.
The Global Risks Report is part of an
expanded Global Risks Initiative launchedby the Forum this past year that includes
sustained analysis at the global, regional
and industry levels. It is this qualitative andquantitative study of global risks, conductedin partnership with members of the business,academic and public-sector communities,
that we hope will help bring stakeholders
together in developing sustainable,
integrated solutions to the world’s mostpressing challenges.

Børge Brende
President, World Economic ForumThe Global Risks Report 2020

5

Executive Summary
The world cannot wait for the fog ofgeopolitical and geo-economic uncertainty
to lift. Opting to ride out the current period
in the hope that the global system will
“snap back” runs the risk of missing crucial
windows to address pressing challenges.
On key issues such as the economy, theenvironment, technology and public health,stakeholders must find ways to act quickly
and with purpose within an unsettled global
landscape. This is the context in which theWorld Economic Forum publishes the 15thedition of the Global Risks Report.

An unsettled world

increasing the risk of economic stagnation.
Low trade barriers, fiscal prudence andstrong global investment—once seen as
fundamentals for economic growth—are
fraying as leaders advance nationalist
policies. The margins for monetary andfiscal stimuli are also narrower than
before the 2008–2009 financial crisis,
creating uncertainty about how wellcountercyclical policies will work. A
challenging economic climate may
persist this year: according to the Global
Risks Perception Survey, members of themultistakeholder community see “economic
confrontations” and “domestic politicalpolarization” as the top risks in 2020.

Powerful economic, demographic andtechnological forces are shaping a newbalance of power. The result is an unsettled
geopolitical landscape—one in whichstates are increasingly viewing opportunities
and challenges through unilateral lenses.
What were once givens regarding alliancestructures and multilateral systems nolonger hold as states question the valueof long-standing frameworks, adopt
more nationalist postures in pursuitof individual agendas and weigh thepotential geopolitical consequences of
economic decoupling.

Amid this darkening economic outlook,citizens’ discontent has hardened withsystems that have failed to promoteadvancement. Disapproval of how
governments are addressing profoundeconomic and social issues has sparked
protests throughout the world, potentiallyweakening the ability of governments totake decisive action should a downturn
occur. Without economic and social
stability, countries could lack the financial
resources, fiscal margin, political capitalor social support needed to confront key
global risks.

Beyond the risk of conflict, if stakeholders
concentrate on immediate geostrategic
advantage and fail to reimagine or adapt
mechanisms for coordination during thisunsettled period, opportunities for action
on key priorities may slip away.

Risks to economic stability
and social cohesion
Recent editions of the Global Risks Reportwarned of downward pressure on the
global economy from macroeconomic
fragilities and financial inequality. These
pressures continued to intensify in 2019,6

Executive Summary

Climate threats andaccelerated biodiversity loss
Climate change is striking harder andmore rapidly than many expected. The
last five years are on track to be thewarmest on record, natural disasters are
becoming more intense and more frequent,and last year witnessed unprecedented
extreme weather throughout the world.
Alarmingly, global temperatures are on
track to increase by at least 3°C towards
the end of the century—twice what climate
experts have warned is the limit to avoid
the most severe economic, social andenvironmental consequences. The nearterm impacts of climate change add up toa planetary emergency that will include lossof life, social and geopolitical tensions andnegative economic impacts.
For the first time in the history of the Global
Risks Perception Survey, environmental
concerns dominate the top long-termrisks by likelihood among members of theWorld Economic Forum’s multistakeholder
community; three of the top five risks byimpact are also environmental (see Figure I,
The Evolving Risks Landscape 2007–2020).
“Failure of climate change mitigation andadaption” is the number one risk by impact
and number two by likelihood over the next
10 years, according to our survey. Membersof the Global Shapers Community—the
Forum’s younger constituents—showeven more concern, ranking environmental
issues as the top risks in both the shortand long terms.

technology governance framework andcyber insecurity all pose significant risk.
Geopolitical and geo-economic uncertainty—
including the possibility of fragmented
cyberspace—also threaten to prevent thefull potential of next generation technologies
from being realized. Respondents to oursurvey rated “information infrastructure
breakdown” as the sixth most impactful riskin the years until 2030.

Health systems under
new pressures

Consequences ofdigital fragmentation

Health systems around the world are at
risk of becoming unfit for purpose. New
vulnerabilities resulting from changing
societal, environmental, demographic andtechnological patterns threaten to undo thedramatic gains in wellness and prosperity
that health systems have supported over thelast century. Non-communicable diseases—
such as cardiovascular diseases and mental
illness—have replaced infectious diseases as
the leading cause of death, while increases
in longevity and the economic and societal
costs of managing chronic diseases have
put healthcare systems in many countries
under stress. Progress against pandemics is
also being undermined by vaccine hesitancy
and drug resistance, making it increasingly
difficult to land the final blow against someof humanity’s biggest killers. As existing
health risks resurge and new ones emerge,
humanity’s past successes in overcoming
health challenges are no guarantee of
future results.

More than 50% of the world’s population is
now online, approximately one million people
go online for their first time each day, andtwo-thirds of the global population own amobile device. While digital technology isbringing tremendous economic andsocietal benefits to much of the global
population, issues such as unequal
access to the internet, the lack of a global

There is still scope for stakeholders toaddress these risks, but the windowof opportunity is closing. Coordinated,
multistakeholder action is needed quickly
to mitigate against the worst outcomes
and build resiliency across communities
and businesses.

The Forum’s multistakeholder network
rate “biodiversity loss” as the second mostimpactful and third most likely risk for the
next decade. The current rate of extinction
is tens to hundreds of times higher than the
average over the past 10 million years—and
it is accelerating. Biodiversity loss has critical
implications for humanity, from the collapseof food and health systems to the disruptionof entire supply chains.

The Global Risks Report 2020

7

GlobalRisks 2020:
An Unsettled
World

OLASER/GETTY IMAGES

The world cannot wait for the fog ofgeopolitical and geo-economic uncertainty tolift. Opting to ride out the current period in thehope that the global system will “snap back”
runs the risk of missing crucial windows toaddress pressing challenges. On key issues
such as the economy, the environment,
technology and public health, stakeholders
must find ways to act quickly and withpurpose within an unsettled global landscape.
9REUTERS/JEAN-PAUL PELISSIER

Powerful economic, demographic andtechnological forces are shaping a newbalance of power. The result is an
unsettled geopolitical landscape—one
in which states are increasingly viewing
opportunities and challenges through aunilateral lens. What were once givens
regarding alliance structures and multilateralsystems no longer hold as states question
the value of longstanding frameworks,
adopt more nationalist postures in pursuitof individual agendas and weigh thepotential geopolitical consequences of
economic decoupling.
Beyond the risk of conflict, if stakeholders
concentrate on immediate geostrategic
advantage and fail to reimagine or adapt
mechanisms for coordination during thisunsettled period, opportunities for action on
key priorities will slip away.

Turbulence: The new normal
For much of the post–Cold War period, all
but a few societies shared the aspirationof stable development in the context offormally agreed (if not universally observed)
rules governed by multilateral institutions.
Geopolitical challenges—from borderconflicts to terrorist attacks—were often
10

Global Risks 2020

addressed through cooperative institutions
and in ways that sought to minimize
interruptions to cooperation for global
economic progress. And some have argued
that greater economic interconnectedness
and interdependence in the last 20 years—
fostered by multilateral institutions—has
acted as a check on great power conflict.1
But new dynamics—in certain cases,
underlying forces that are the result ofprogress over the last three decades—are
causing states to re-evaluate their approachto geopolitics. Today’s emerging economies
are expected to comprise six of the world’s
seven largest economies by 2050.2 Rising
powers are already investing more inprojecting influence around the world.3 Anddigital technologies are redefining what itmeans to exert global power.4 As these trends
are unfolding, a shift in mindset is also taking
place among some stakeholders—from
multilateral to unilateral and from cooperative
to competitive. The resulting geopoliticalturbulence is one of unpredictability about
who is leading, who are allies, and who will
end up the winners and losers.
As states respond to the challenges andopportunities offered by today’s epochal
power-shift, some view multilateral
institutions as obstacles rather thanFIGURE 1.1

Short-Term Risk Outlook
Percentage of respondents expecting risks to increase in 2020

Multistakeholders

Global Shapers

Economic confrontations

78.5%

Extreme heat waves

88.8%

Domestic political polarization

78.4%

Destruction of ecosystems

87.9%

Extreme heat waves

77.1%

Health impacted by pollution

87.0%

Destruction of natural ecosystems

76.2%

Water crises

86.0%

Cyberattacks: infrastructure

76.1%

Uncontrolled fires

79.8%

Protectionism on trade/investment

76.0%

Economic confrontations

78.4%

Populist and nativist agendas

75.7%

Loss of trust in media sources

77.1%

Cyberattacks: theft of money/data

75.0%

Loss of privacy (to companies)

76.2%

Recession in a major economy

72.8%

Loss of privacy (to governments)

76.1%

Uncontrolled fires

70.7%

Domestic political polarization

75.3%

Economic

Environmental

GeopoliticalSocietalTechnologicalNote: The Global Shapers Community is the World Economic Forum’s network of young people driving dialogue, action and change.
Source: World Economic Forum Global Risks Perception Survey 2019-2020. See Appendix B for details.

instruments for promoting their interests.
The challenge to these institutions is rooted
in concern within some societies about
globalized systems and mechanismsof cooperation—what the International
Monetary Fund (IMF) dubs a “trust
recession”.5 According to the 2019 Edelman
Trust Barometer, just one in five people
believe “the system” is working for them.6

What were once givens
regarding alliance structuresand multilateral systems
no longer hold

Expanding geopolitical
frontierspressing economic, environmental andtechnological challenges.

The current period of geopolitical changepresents opportunities—for instance, tore-evaluate frameworks in which somestakeholders have been under-represented.
Yet the turbulence threatens to undermine
the international community’s ability to
mitigate critical global risks by multiplying
the domains in which rivalries can playout and limiting stakeholders’ capacity
to address global challenges. Unlessstakeholders can adapt to the present—
while still preparing for the future—timewill run out to address some of the mostThe economic frontier
The global economy is showing signs ofvulnerability (see Chapter 2, The Fraying
Fundamentals). At the time of writing,the IMF expected growth to be 3.0% in
2019—the lowest rate since the economiccrisis of 2008-2009.7 At a time when global
coordination in the form of more efficient
trade could help boost growth, trade has
instead been turned into an instrument forrivalry. The World Trade Organization (WTO)
projected that growth in merchandise trade
will slow to 1.2% in 2019 from 3.0% in 2018.8
The Global Risks Report 2020

11FIGURE 1.2

Long-Term Risk Outlook
Top 10 risks by likelihood and impact overthe next 10 years

Multistakeholders
Likelihood

ImpactExtreme weather

Climate action failure

Climate action failure

Weapons of mass
destruction

Natural disaster

Biodiversity loss

Biodiversity loss

Extreme weather

Human-madeenvironmental disasters

Water crises

Data fraud or theft

Information infrastructure
breakdown

Cyberattacks

Natural disasters

Water crises

Cyberattacks

Global governance failure

Human-madeenvironmental disasters

Asset bubble

Infectious diseases

Global Shapers
Likelihood

ImpactExtreme weather

Biodiversity loss

Biodiversity loss

Climate action failure

Climate action failure

Water crises

Natural disasters

Human-madeenvironmental disasters

Human-madeenvironmental disasters

Extreme weather

Water crises

Weapons of mass
destruction

Data fraud or theft

Natural disasters

Involuntary migration

Food crises

Social instability

Infectious diseases

Cyberattacks

Cyberattacks

Economic

Environmental

SocietalTechnological

Geopolitical

Source: World Economic Forum Global Risks Perception Survey 2019-2020. 
See Appendix B for details.

12

Global Risks 2020

While there was progress late last year
towards a “Phase One” US-China tradedeal,9 tensions between the two haveharmed the economies of both countries
and the global economic outlook as
well: the tensions could cost US$700
billion in lost output in 202010—almost
the amount of GDP lost by the entire
European Union due to the financial
crisis (US$757 billion between 2008 and2009).11 The Organisation for Economic
Co-operation and Development (OECD)
warns, “Escalating trade conflicts aretaking an increasing toll on confidence andinvestment, adding to policy uncertainty,
aggravating risks in financial markets
and endangering already weak growthprospects worldwide.”12 Respondents to
the Global Risks Perception Survey do
not expect overall economic tensions
to cease—over 78% of them see“economic confrontations” increasing
in 2020 (see Figure 1.1).

The environmental frontier
In late 2019, UN Secretary-General António
Guterres warned that a “point of no-return”
on climate change is “in sight and hurtling
toward us”.13 Respondents to the Forum’s
Global Risks Perception Survey also aresounding the alarm. For the first time in
the history of the survey, climate-related
issues dominated all of the top-five longterm risks by likelihood among membersof the Forum’s multistakeholder community(see Figure 1.2). And members of the
Global Shapers Community—the Forum’s
younger constituents—show even moreconcern, ranking environmental issues as
the top risks in both the short and longterms (see Figure III, The Global Shapers
Risk Landscape).
Yet, although immediate multilateral andmultistakeholder coordination is needed toaddress global warming (see Chapter 3,
A Decade Left, and Chapter 4, Save the
Axolotl), global fracture—most recently
exhibited at the 2019 UN Climate Change
Conference COP25 in Madrid—and a
growth in nationalist policies risk preventing
meaningful action.14
States are adapting to one of the mostdramatic effects of climate change—themelting of Arctic ice—not by redoubling
efforts to prevent further environmental

REUTERS/DAMIR SAGOLJClimate-related issues dominated allof the top-five long-term risks in termsof likelihood
degradation, but by exploiting the region forgeostrategic advantage. The Arctic Council,
which for more than 20 years has served
as an important multilateral mechanism
for collaboration among the eight Arctic
States, is under stress. A new cold war isdeveloping as countries—including China,
Norway, Russia and the United States—
compete for fish, gas and other natural
resources; for the use of new shipping lanes;
and to establish a strategic footprint in theregion.15 Russia and China have prioritizeddeveloping the Northern Sea Route, withthe latter dubbing its initiative the “Polar Silk
Road”.16 The U.S. Department of Defense
released its Arctic strategy in July; that
document did not mention climate change

but did present a strategy in which the“end-state for the Arctic is a secure andstable region in which U.S. national security
interests are safeguarded.”17

The digital frontier
Both sets of respondents to the Global Risks
Perception Survey—the multistakeholder
community and the Global Shapers—identify
cyber-related issues, such as cyberattacks
and data fraud or theft, within the list of top
10 long-term risks (see Figure 1.2). Indeed,
while the growth of digitalization offers
opportunities that can best be captured
through coordinated approaches among
stakeholders, it also creates areas in needof coordinated solutions.
The Global Risks Report 202013

One such area is artificial intelligence (AI).
According to the UN’s International
Telecommunication Union, it will take“massive interdisciplinary collaboration”
to unlock AI’s potential.18 But because
AI can also bring significant risk,
multilateral cooperation is needed toaddress challenges such as security,
verification, “deepfake” videos, mass
surveillance and advanced weaponry.

78%

Respondents
expecting “economic
confrontations” toincrease in 2020

Despite the need for a common set ofglobal protocols, AI has become a newfrontier for competitive geopolitics. In
2017, Russian President Vladimir Putin
said, “Whoever becomes the leader inthis sphere will become the ruler of theworld.”19 China has strongly encouraged
companies to invest in AI, making it anational security priority;20 AI is a pillarof its current five-year plan (2016–2020)
for science and technology development
and its “made in China 2025” industrial
plan.21 In the United States, the Defense
Department’s Joint Artificial Intelligence
Center recently requested that its budget
be tripled to US$268 million,22 citing the
rapid development of AI capabilities by
China and Russia as a reason for urgency.
There is some progress. Already,stakeholders are coming together todesign shared protocols for AI. The World
Economic Forum’s Centre for the Fourth
Industrial Revolution has worked with thegovernment of the United Kingdom toformulate guidelines for more ethical andefficient procurement of AI. These guidelines
will be piloted in countries across Europe,
the Middle East and Latin America. And, in
May 2019, the OECD’s 36 member states
adopted Principles on AI—the first common
set of principles that governments haveadopted—to promote AI “that is innovative
and trustworthy and that respects humanrights and democratic values.”23 However,
14

Global Risks 2020

challenges remain. Eleonore Pauwels of
the United Nations University Centre for
Policy Research warns that “the resurgenceof nationalist agendas across the world
may point to a dwindling capacity of themultilateral system to play a meaningful rolein the global governance of AI.”24

A coming decoupling?
Geopolitical turbulence related to tradetensions and technological rivalries is partof a larger risk for the global community—
the risk of the United States and China
decoupling. Together, these two countries
account for over 40% of global GDP,25 andthey are the world’s leading innovators.26
They are also the world’s top two emittersof greenhouse gases.27 Expanding the
global economy, addressing climatechange and realizing the full benefits oftechnology, therefore, depend on theirability to coordinate as part of a common
global system that is capable of including
other stakeholders.

and security have functioned over the
past three decades. Countries would
need to decide which economic system
to be part of—something many havealready said they do not want to do—
and businesses would have to develop
separate protocols.32
The decline of economic integration would
also remove what many see as a checkagainst outright conflict.

A need for adaptive
geopolitics

REUTERS/MAXIM SHEMETOV

However, the trend today is not one in whichthese two countries are just competing
across common domains but one in which
each is looking to design its own systems—
its own supply chains, 5G networks andglobal investment institutions. Alreadyinvestment flows between the two have
dropped,28 each has moved to restrict
technology from the other,29 and someanalysts predict China will look to reduce
its dependence on the US dollar by holding
more foreign currencies.30
Even if the current trade tensions cool,
we risk heading towards an era in which
the two countries disentangle theireconomies and create barriers between
one another. While leaders in Beijing andWashington have expressed disapprovalof an economic decoupling, the policy
measures being put in place are paving aroad towards that destination.31
A return to a kind of cold war or iron curtain
economic landscape would fundamentallychange the way in which global business

As the outlines of the next geopolitical era
start to emerge, there is still uncertainty
about where the distribution of power
will settle and from where influence will
emanate, but a snap back to the old orderappears unlikely. If stakeholders attempt tobide their time, waiting for the old system
to return, they will be ill-prepared for whatlies ahead and may miss the point at
which key challenges—economic, societal,
technological or environmental—can beaddressed. Instead, longstanding institutions
must adapt to the present and be upgradedor reimagined for the future.
There are signs of adaptation in thecreation of new institutions designed
to function in this turbulent geopoliticalclimate. One example is the Franco-German“Alliance for Multilateralism”, a group ofnations working to boost international
cooperation in areas such as disarmament,
digitalization and climate change.33 Anotheris the African Continental Free Trade
Agreement, which will bring together the
55 member states of the African Union toform the largest free trade area since theformation of the WTO.34 Narrower, issuespecific, ad-hoc “coalitions of the willing”
are proliferating—including Asian regional
trade and investment instruments, the“Quad” (consultation among Australia,
India, Japan and the United States), and
the Global Coalition against Daesh. Whileaiming to address collective priorities,
however, such adaptive approaches run
the risk of being less effective because
they lack the legitimacy of broad-based
multilateral institutions. Still, they point to
the need for continued coordination andpartnership during an unsettled time.
The Global Risks Report 202015

Notes16

Global Risks 2020

1

Tanious, M. E. 2019. “The Impact of
Economic Interdependence on the
Probability of Conflict between States: The
Case of ‘American–Chinese Relationshipon Taiwan Since 1995’”. 14 January 2019.
Review of Economics and Political Science.
https://www.emerald.com/insight/content/
doi/10.1108/REPS-10-2018-010/full/html

2

PwC Global. “The World in 2050: The Long
View: How Will the Global Economic Order
Change by 2050?” PWC. https://www.pwc.
com/gx/en/issues/economy/the-worldin-2050.html

3

BBC News. “China Now Has More
Diplomatic Posts Than Any Other Country”.
27 November 2019. BBC. https://www.bbc.
com/news/world-asia-china-50569237

4

Engelke, P. 2018. “Three Ways the Fourth
Industrial Revolution Is Shaping Geopolitics”.
24 August 2018. https://www.weforum.org/
agenda/2018/08/three-ways-the-fourthindustrial-revolution-is-shaping-geopolitics/

5

Lipton, D. 2018 “Trust and the Future ofMultilateralism”. Introductory Remarks for theEurofi High Level Seminar, IMF First Deputy
Managing Director David Lipton, 30 April
2018. International Monetary Fund. https://www.imf.org/en/News/Articles/2018/04/30/
sp042618-trust-and-the-future-ofmultilateralism

6

Edelman. 2019. “2019 Edelman Trust
Barometer”. 20 January 2019. Edelman.
https://www.edelman.com/trust-barometer7

IMF (International Monetary Fund). 2019.
World Economic Outlook, October 2019:
Global Manufacturing Downturn, Rising
Trade Barriers. Washington, DC: IMF.
https://www.imf.org/en/Publications/WEO/
Issues/2019/10/01/world-economic-outlookoctober-2019

8

WTO (World Trade Organization). 2019.
“Global Trade Growth Loses Momentum as
Trade Tensions Persist”. Press Release, 2
April 2019. World Trade Organization. https://www.wto.org/english/news_e/pres19_e/
pr837_e.htm; “WTO lowers trade forecast
as tensions unsettle global economy”. Press
Release, 1 October 2019. https://www.wto.
org/english/news_e/pres19_e/pr840_e.htm

9Reuters. 2019. “Factbox: What Is Actually in
the U.S.-China ‘Phase One’ Trade Deal?” 16
December 2019. Reuters Business News.
https://www.reuters.com/article/us-usatrade-china-details-factbox/factbox-what-isactually-in-the-us-china-phase-one-tradedeal-idUSKBN1YK1QT

10 Georgieva, K. 2019. “Transcript ofInternational Monetary Fund Managing
Director Kristalina Georgieva’s Opening
Press Conference, 2019 Annual Meetings”.
17 October 2019. International Monetary
Fund. https://www.imf.org/en/News/
Articles/2019/10/17/tr101719-transcriptmanaging-director-kristalina-georgievapress-conference-2019-annual-meetings
11 World Bank Open Data. “GDP (constant2010 US$) - European Union, 2007–2018”. The World Bank. https://data.
worldbank.org/indicator/NY.GDP.MKTP.
KD?end=2018&locations=EU&start=2007
12 OECD (Organisation for Economic Cooperation and Development). 2019. “OECD
Sees Rising Trade Tensions and Policy
Uncertainty Further Weakening Global
Growth”. 19 September 2019. Organisation
for Economic Cooperation and Development.
https://www.oecd.org/economy/oecd-seesrising-trade-tensions-and-policy-uncertaintyfurther-weakening-global-growth.htm
13 Manzanaro, S. S. 2019. “COP25 in Madrid:
UN Secretary-General Guterres Says Planet
Is ‘Close to a Point of No Return.’” Euronews.
3 December 2019. https://www.euronews.
com/2019/12/02/live-un-leaders-anddelegates-arrive-in-madrid-for-the-climatechange-summit
14 Temko, N. 2018. “COP24: Nationalism andthe Challenge of Climate Change”. The
Christian Science Monitor. 27 November
2018. https://www.csmonitor.com/
World/2018/1127/COP24-Nationalism-andthe-challenge-of-climate-change
15 Shea, N. 2019. “Scenes from the New
Cold War Unfolding at the Top of theWorld”. National Geographic. 8 May 2019.
https://www.nationalgeographic.com/
environment/2018/10/new-cold-war-brewsas-arctic-ice-melts/
16 Reuters. 2019. “Maersk Explores Arctic
Shipping Route with Russia”. Reuters
Business News. 14 June 2019. https://www.reuters.com/article/us-arcticshipping-maersk/maersk-exploresarctic-shipping-route-with-russiaidUSKCN1TF0WW#targetText=Russia%20
has%20made%20developing%20
the,route%20the%20northern%20Suez%20Canal
17 Office of the Under Secretary of Defense
for Policy. 2019. Report to Congress:
Department of Defense Arctic Strategy”.
June 2019. https://media.defense.gov/2019/
Jun/06/2002141657/-1/-1/1/2019-DODARCTIC-STRATEGY.PDF

18 ITU (International Telecommunication Union).
2017. AI for Good Global Summit: Report.
June 2017. International Telecommunication
Union. https://www.itu.int/en/ITU-T/AI/
Documents/Report/AI_for_Good_Global_
Summit_Report_2017.pdf
19 Maggio, E. 2017. “Putin Believes that
Whatever Country Has the Best AI WillBe ‘the Ruler of the World’”. Business
Insider. 4 September 2017. https://www.
businessinsider.com/putin-believes-countrywith-best-ai-ruler-of-the-world-20179?r=US&IR=T
20 Allen, G. C. 2019. Understanding China’s AI
Strategy: Clues to Chinese Strategic Thinking
on Artificial Intelligence and National Security.
Washington, DC: Center for a New American
Security. https://s3.amazonaws.com/files.
cnas.org/documents/CNAS-UnderstandingChinas-AI-Strategy-Gregory-C.-AllenFINAL-2.15.19.pdf?mtime=20190215104041
21 Dai, S. and A. Shen. 2018. “‘Made in China
2025’: China Has a Competitive AI Game
Plan But Success Will Need Cooperation”.
South China Morning Post. 1 October 2018.
https://www.scmp.com/tech/article/2166177/
made-china-2025-china-has-competitive-aigame-plan-success-will-need
22 Ashizuka, T. 2019. “Pentagon Seeks to
Triple AI Warfare Budget to Meet China’s
Rise”. Nikkei Asian Review. 4 October 2019.
https://asia.nikkei.com/Business/AerospaceDefense/Pentagon-seeks-to-triple-AIwarfare-budget-to-meet-China-s-rise
23 OECD (Organisation for Economic Cooperation and Development). “OECD
Principles on AI”. Organisation for Economic
Co-operation and Development Going Digital
Project. http://www.oecd.org/going-digital/ai/
principles/
24 Pauwels, E. 2018. “The New Geopolitics ofArtificial Intelligence”. 15 October 2018. World
Economic Forum. https://www.weforum.org/
agenda/2018/10/artificial-intelligence-ai-newgeopolitics-un/
25 IMF (International Monetary Fund). “GDP,Current Prices”. IMF Data Mapper.
International Monetary Fund. https://www.
imf.org/external/datamapper/NGDPD@WEO/
OEMDC/ADVEC/WEOWORLD

26 Schoff, J. L. and A. Ito. 2019. “Competingwith China on Technology and Innovation“.
10 October 2019. Carnegie Endowment
for International Peace. https://carnegieendowment.org/2019/10/10/
competing-with-china-on-technology-andinnovation-pub-80010
27 Friedrich, J., M. Ge and A. Pickens.2017.
“This Interactive Chart Explains World’s Top
10 Emitters, and How They’ve Changed”. 11
April 2017. World Resources Institute. https://www.wri.org/blog/2017/04/interactive-chartexplains-worlds-top-10-emitters-and-howtheyve-changed
28 Congressional Research Service. 2019.
“U.S.-China Investment Ties: Overview andIssues for Congress”. In Focus. 28 August
2019. https://fas.org/sgp/crs/row/IF11283.pdf
29 Yang, Y. and N. Liu. 2019. “Beijing Orders
State Offices to Replace Foreign PCs andSoftware”. Financial Times. 8 December
2019. https://www.ft.com/content/b55fc6ee1787-11ea-8d73-6303645ac406
30 Khan, Y. 2019. “China Aims to Reduce Its
Dependence on America by ‘Decoupling’
from the Dollar, ANZ Bank Says”. Market
Insider. 18 November 2019. https://markets.
businessinsider.com/news/stocks/chinadiversifying-away-from-dollar-reserves-dueto-trade-war-anz-2019-11-1028695801
31 Wang, O. “Chinese Economists Warn Beijing
to Prepare for Decoupling from US”. South
China Morning Post. 7 July 2019. https://www.scmp.com/news/china/article/3017550/
chinese-economists-warn-beijing-preparedecoupling-us
32 Stromseth, J. 2019. Don’t Make Us Choose:Southeast Asia in the Throes of US-China
Rivalry. Foreign Policy at Brookings.
https://www.brookings.edu/wp-content/
uploads/2019/10/FP_20191009_dont_make_us_choose.pdf
33 DW (Deutsche Welle). 2019. “Germany
Launches Alliance for Multilateralism”.
DW News. 26 September 2019. https://p.
dw.com/p/3QJOO
34 TRALAC. 2019. “African Continental Free
Trade Area (AfCFTA) Legal Texts and Policy
Documents”. Resources. TRALAC Trade
Law Centre NPC. https://www.tralac.org/
resources/by-region/cfta.html

The Global Risks Report 2020

17

The Fraying
Fundamentals
Risks to Economic Stability andSocial Cohesion
REUTERS/STRINGER

REUTERS/STRINGER

Recent editions of the Global Risks Report
have warned of downward pressure on the
global economy from macroeconomic
fragilities and financial inequality. These
pressures continued to intensify in 2019,
increasing the risk of economic stagnation.
Low trade barriers, fiscal prudence andstrong global investment—once seen as
fundamentals for economic growth—are being

challenged as leaders advance nationalist
policies and citizens’ discontent hardens withsystems that have failed to promote economic
advancement for all. A challenging economic
climate may persist: according to the Global
Risks Perception Survey, members of themultistakeholder community see “economic
confrontations” and “domestic politicalpolarization” as the top risks in 2020.
19

The global economy is at risk of stagnation.
Rising trade barriers, lower investment andhigh debt are straining economies aroundthe world. The margins for monetary andfiscal stimuli are narrower than before
the 2008–2009 financial crisis, creating
uncertainty about how well countercyclicalpolicies will work. This uncertainty is
exacerbated by a tense geo-economic
and geopolitical landscape (see Chapter
1, Global Risks 2020), as well as bydomestic challenges. Profound citizen
discontent—born of disapproval of the way
governments are addressing economic andsocial challenges—has sparked protests
throughout the world, potentially weakening
the ability of governments to take decisive
action should a downturn occur.

Economic risk factors arecompounding withwidespread domestic
discontent towards
economic systems
Macroeconomic risk factors
During the last decade, moderate but
stable growth has given way to what theInternational Monetary Fund (IMF) has called a“synchronized slowdown”—weakened growthamong the world’s economies.1 We cautionedin last year’s Global Risks Report that a gradualdeceleration was underway, and the evidence
suggests that, since then, the slowdown of theworld economy has further materialized. By thethird quarter of 2019, six of the world’s largest
seven economies (Japan is the exception),
which together represent more than half ofglobal production, had decelerated. The outlook
is also precarious for other G20 economies.
Except for Indonesia and South Korea, these
economies are growing at a rate below 2%—
with Argentina and Mexico contracting in thethird quarter of 2019.2 These trends likely explain
why our multistakeholder community rated“recession in a major economy” as the ninth
risk most likely to increase in 2020 (see Figure
1.1 in Chapter 1, Global Risks 2020).
20

The Fraying Fundamentals

Going forward, rising trade tensions, lower
investment, weak confidence and high debt
risk a prolonged slowdown of the world
economy. At the time of writing this report,
the IMF had lowered its last five estimatesof world output for 2019 and expected a
growth rate of 3.0%—a sharp decline from
3.6% in 2018 and the slowest since the 1.7%
contraction in 2009.3 For 2020, the IMF had
also downgraded its forecast from 3.7% to3.4% (see Figure 2.1).

Trade tensions“Economic confrontations between major
powers” is the most concerning risk for
2020, according to members of the Forum’s
multistakeholder community; this is thesame risk our multistakeholder network
rated as the top risk last year. It is clear why
short-term economic risks ranked high in
the Global Risks Perception Survey: global
trade, which for decades has been an
engine for growth, is slowing down. World
Trade Organization (WTO) data for the first
three quarters of 2019 shows that total
world merchandise trade decreased 2.9%
from the previous year (see Figure 2.2)—it
decreased in the world’s top ten traders.4
Reduced trade volumes are largely the
result of what the WTO has called“historically high levels of trade restrictions”.5
The potential result, according to the IMF,
could be global growth slowing by 0.8
percentage points in 2020, should theUnited States and China uphold existing
tariffs or implement new ones.6 While
progress was made in late 2019 between
the United States and China towards a
trade agreement, the effects of having
turned trade from an instrument ofcooperation to a weapon of rivalry
may persist.

Lower investment
Investment is indispensable for boostingproductivity. Globally, investment has been
affected by low expected returns, uncertainty
about economic policy in major economies,
and ongoing and emerging geopoliticaltensions (see Chapter 1, Global Risks 2020).
In our survey, “protectionism regarding tradeand investment” and “populist and nativist
agendas”—two major obstacles to the freeflow of foreign direct investment (FDI)—wererated as the fifth and sixth risks most likely toincrease through 2020.

FIGURE 2.1

FIGURE 2.3

IMF World Output Projections

Foreign Direct Investment Net Inflows

Forecast 2020

US$ billions

Forecast 2019800
3.9% 3.9% 3.9%

700
600

3.7%

500

3.6% 3.6%
3.5%

400
3.4%

3.5%

300
200

3.3%

100

3.2%

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

3.0%
Jan

Apr

Jul

Oct

Jan

2018

Apr

Jul

Oct
Euro Area

2019

Source: IMF. 2018 and 2019. World Economic Outlooks andquarterly updates.

United States

China

Source: World BankOpen Data, https://data.worldbank.org/indicator/BX.KLT.DINV.
CD.WD?end=2018&locations=CN-XC-US&start=2009&view=chart, accessed 15
December 2019.

FIGURE 2.2

Change in Trade: Q1-Q3 (2018) to Q1-Q3 (2019)
-0.6%
-1.4%
-2.6%

-2.4%

-2.4%

Netherlands

France

China

-2.9%
World total

-3.3%
-4.7%

-7.5%

-4.4%

-7.4%

Hong Kong S. Korea
SAR

Germany

Italy

Japan

UnitedKingdom

UnitedStates

Source: World Economic Forum estimates from WTO data, https://data.wto.org/, accessed 8 January 2020.

Like global growth, FDI remains lower thanit was before the 2008–2009 crisis. It has
decreased for the last three years. In 2018,
net FDI inflows were down 38% compared
to 2017, and less than half of the level they
were in 2015.7 The sharpest decline has
been in the euro area (see Figure 2.3), where
less appealing yields, lower production anduncertainty surrounding Brexit have led net
FDI inflows to the region to fall to a record
low since the euro was adopted in 1999.8

Weak confidence
Business confidence, a precursor toinvestment, has also deteriorated during 2019.
The Business confidence index—constructedby the Organisation for Economic
Co-operation and Development (OECD) using
production data and business sentiment toanticipate future performance—signals thatthe state of the global economy is expected
to worsen in the short term. At the time ofwriting this report, the index had declined for
The Global Risks Report 202021

14 consecutive months, dropping below the
no-change threshold for the first time since2016 and reaching a 10-year low in Octoberof last year (see Figure 2.4).9

FIGURE 2.4

OECD Business Confidence Index
Index score
102

High debt
Private and public debt has been accumulating
since the crisis. According to the IMF, theglobal ratio of debt-to-GDP increased by
11 percentage points between 2009 and2017. Across G20 economies, public debt is
expected to reach 90% of GDP in 2019—thehighest level on record—and to grow evenmore, to 95% in 2024 (see Figure 2.5).10

101
100
99
98
97
96

Oct

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: OECD Data, Business confidence index, https://data.oecd.org/leadind/business-confidence-index-bci.htm, accessed 3 January 2020.
Note: Numbers above 100 suggest an increased confidence in near future business performance, and numbers below 100 indicate pessimism towards
future performance.

95%

Narrow margins for stimuli

of GDP: expected
G20 debt in 2024

As economic warning signs begin toflash, there is a risk that the tools
previously used to brake economic slides
may no longer be available. Financial
market stress and strained public finances
are creating uncertainty as to whether
conventional monetary and fiscal policy
instruments, which have worked to boost
growth in the past, could be as effectivein the future.

FIGURE 2.5

G20 General Government Gross Debt
% of GDP

Monetary constraints

100%
95%
90%
85%
80%
75%
70%
65%
2001

2019

2024

Source: World Economic Forum estimates with data from IMF DataMapper, https://www.imf.org/external/datamapper/GGXWDG_NGDP@WEO/OEMDC/ADVEC/WEOWORLD, accessed 15 December 2019.

22

The Fraying Fundamentals

Private debt has built up on the basis oflower interest rates—particularly in China andthe United States, where more than 40% of
total private debt is located.11 In the second
quarter of 2019, non-financial corporate
debt reached 156% of GDP in China.12 In the
United States, non-financial corporate debt
reached 47% of GDP in the third quarter—
the highest level ever recorded—according
to Federal Reserve Bank of St. Louis data.13
The IMF has listed “rising corporate debt
burdens” as a key vulnerability in the global
financial system.14

As the IMF has signalled, interest rate cuts
have helped boost growth, but they have also
fostered higher debt and riskier rent-seeking,which affect financial market stability.15 In
2019, monetary policies worldwide saw
profound reversals, with most central banks
persistently cutting interest rates to very—
sometimes historically—low levels.16 In the
United States, after nine consecutive hikes
between 2015 and 2018, the Federal Reserve
lowered its target interest rate from 2.50%
in December 2018 to 1.75% currently.17 The
European Central Bank (ECB) cut its deposit

REUTERS/PRASHANT WAYDANDE

rate to a historic low of -0.50% in September
2019.18 The Bank of Japan’s deposit rate
has remained at -0.10% since February
2016.19 Such low rates raise concerns about
the soundness of banking systems. The
ECB has warned that decreasing profits arechallenging Europe’s banking sector;20 in thesecond quarter of 2019, European banks
yielded an average return-to-equity of 7.0%,21
compared to 12.1% in the United States.22
The role and reach of monetary policies arealso challenged by wider factors such astechnological change, climate change andrising inequality. Christine Lagarde, Presidentof the ECB, for example, announced a“strategic review” of the ECB’s mandate topreserve price stability to “address the majorchanges that have taken place over thecourse of the last 16 years”—when the lastsuch review was conducted.23

Fiscal constraints
The margin for fiscal stimulus in most of theworld’s main economies has narrowed, as
higher spending has reduced budget coffers.
Public debt in 15 of the 20 largest economies

has increased every year since the 2008–2009 crisis.24 Researchers from the ECB
analysed four decades worth of data from
17 European countries and concluded that
fiscal stimuli may not be effective whenpublic debt is high.25
At the same time, tax rates have increased
across G20 economies—their average
maximum income tax rate has risen bymore than two percentage points since2009, to 37.7%.26 Lowering tax rates could
be a potential stimulus measure, but strong
political and social pressure may arise as
these monies are often used for public
services that attempt to combat inequality.
Higher debt and economic stagnation help to
explain why “fiscal crises” are the top-rated
risk for businesses globally over the next
10 years—according to our Executive
Opinion Survey.27 In the current global
context, weak public finances have two
implications: they jeopardize whateverremaining margin governments have toaddress a recession, and they could
aggravate already hard-felt social tensions
The Global Risks Report 202023

(see 2019 Regional Risks for Doing
Business report).28 The world learned
from the European sovereign debt crisis
that drastic fiscal corrections and publicausterity measures can shrink the welfare
state with political and social consequencesthat many governments would be neither
willing nor able to incur. However, if the
combination of a prolonged economic
slowdown and a public finance crisispressures governments into spending toaddress citizens’ immediate needs, they willbe left with little margin for investment toconfront the slowdown.

Vulnerable societies
Compounding the economic risk factors thatare manifesting is a widespread domestic
discontent with current economic systems,
perceived to be rigged and unfair.

Recent social upheaval
Concern about inequality underlies recentsocial unrest on almost every continent,
although it may be sparked by different
tipping points—such as corruption,
constitutional breaches, or the rise in prices
for basic goods and services. Although
global inequality has declined over the past
three decades, domestic income inequality
has risen in many countries—particularly
in advanced economies—and reachedhistorical highs in some.29 The OECD reportsthat “income inequality in OECD countries is
at its highest level for the past half century.”30
Many of those protesting have long been
excluded from their country’s wealth andshare frustration that the elite have captured
gains at the expense of others.
In Chile, for example, a 3% increase
in metro fares triggered violent
demonstrations, forcing the government

REUTERS/DAMIR SAGOLJ

24

The Fraying Fundamentals

Economic growth, political will and social
stability are fundamental for a model of“stakeholder capitalism”
to change its policy. Chile is one of thefastest growing and most stable Latin
American economies, and it is becoming
less unequal: its Gini coefficient—the mostwidely used measure of income inequality—
fell from 0.57 in 1990 to 0.47 in 2017.
Nonetheless, it still has the second highest
Gini coefficient among OECD members,
well above the OECD average of 0.32.31
In Hong Kong, the recent months-longdemonstrations on political issues havealso been aggravated by inequality: at 0.54,
Hong Kong’s Gini coefficient is at its highest
level in 45 years, significantly above thoseof China (0.39) or the United States (0.42).
As Andrew Sheng and Xiao Geng haveargued, “a powerful, but oft-ignored factor
underlying the frustrations of Hong Kong’s
people is inequality.”32
In Lebanon, where the Gini coefficient is
0.51, nation-wide protests were triggeredby the government’s decision to impose
a tax on the popular communication app
WhatsApp. In Iraq, protests began in
October—mostly led by people from thedisenfranchised working class and middleincome groups—over issues of corruption,
unemployment and demands for access tobasic public services.

Economic and political consequences
Inequality hinders growth and damages
macroeconomic fundamentals, as the IMF
has pointed out: it slows down economic
activities and casts doubt on a country’s
stability.33 This damages investor confidence
and undermines political capital—both
fundamental conditions for prosperity,especially in times of economic volatility.
In France, for example, the persistence of
the “gilets jaunes” movement had caused
businesses more than US$11.4 billion inlosses by December 2019 and complicated
the government’s plans for economic revival.
At the time of writing this report, growth inFrance was expected to slow from 1.7% in2018 to 1.3% in 2020.34 The protests in Chile
cost businesses over US$1.4 billion andforced the government to cancel the AsiaPacific Economic Cooperation (APEC) and
COP25 summits scheduled to take place inSantiago.35 Hong Kong’s economy contracted
by 3.2% in the third quarter of 2019, with theGovernment Economist stating that “local
social incidents dealt [it] a very severe blow”.36
The profound political consequences ofinequality can also undermine economic
growth by making a country harder togovern—in ways ranging from legislative
impasses to complete government
paralysis. This risk is accentuated by thedecentralized and spontaneous natureof recent demonstrations: with pop-up
protests, it is difficult for governments tonegotiate with demonstrators and develop
concrete measures to meet their demands.
During 2019, distinctive issues exacerbatedby inequality forced the reshuffling of theentire presidential cabinet in Chile and theresignation of the heads of state in Bolivia,
Iraq and Lebanon.
According to our expert community,“domestic political polarization” is the second
risk most likely to increase in 2020—up fromninth in 2019. Our global business community
also ranked “failure of national governance”
as the sixth most concerning risk for doing
business over the next 10 years.

Stakeholder capitalism
The World Economic Forum has argued
since 1970 for the need to consider social
well-being alongside economic gains.
Unless the global economic system isreformed to be more socially conscious,
the twin risks of prolonged slowdown andstronger defiance towards the current
economic model will continue to exacerbate
each other. Economic growth, political will
and social stability will be fundamental toensure a prompt and smooth transition toa more cohesive and sustainable model of“stakeholder capitalism”.37
The Global Risks Report 202025

Notes1

Gopinath, G. 2019. “The World Economy:
Synchronized Slowdown, Precarious
Outlook”. IMFBlog post. 15 October 2019.
https://blogs.imf.org/2019/10/15/theworld-economy-synchronized-slowdownprecarious-outlook/2

OECD Data. Quarterly GDP – Total, Percent
change same period, previous year. https://data.oecd.org/gdp/quarterly-gdp.htm

3

IMF (International Monetary Fund). 2019.
World Economic Outlook, October 2019:
Global Manufacturing Downturn, Rising
Trade Barriers. Washington, DC: IMF.
https://www.imf.org/en/Publications/WEO/
Issues/2019/10/01/world-economic-outlookoctober-2019

4

WTO (World Trade Organization). WTO
Data Portal: Total merchandise exports andimports – quarterly (Million US dollar). https://data.wto.org/, accessed 07 January 2020.

5

WTO (World Trade Organization). World
Trade Statistical Review 2019. Geneva: WTO.
https://www.wto.org/english/res_e/statis_e/
wts2019_e/wts19_toc_e.htm

6

7

IMF (International Monetary Fund). 2019.
Transcript of International Monetary FundManaging Director Kristalina Georgieva’s
Opening Press Conference, 2019 Annual
Meetings. 17 October 2019. https://www.imf.
org/en/News/Articles/2019/10/17/tr101719transcript-managing-director-kristalinageorgieva-press-conference-2019-annualmeetings
World Bank Open Data. “Foreign
direct investment, net inflows (BoP,
current US$) - Euro area, World, UnitedStates, China, Japan.” https://data.
worldbank.org/indicator/BX.KLT.DINV.
CD.WD?end=2018&locations=XC-1W-USCN-JP&start=2002, accessed 15 December
2019.

8

Ibid.

9

OECD (Organisation for Economic Cooperation and Development). 2019. Business
confidence index (BCI). https://data.oecd.org/
leadind/business-confidence-index-bci.htm,
accessed 03 January 2020.

10 IMF (International Monetary Fund). 2019. IMF
DataMapper Database, “General government
gross debt – Percent of GDP”. https://www.
imf.org/external/datamapper/GGXWDG_
NGDP@WEO/CHN/FRA/DEU/IND/GBR/USA/
JPN/AUS/BRA/CAN/IDN/ITA/KOR/MEX/
RUS/SAU/ESP/CHE/NLD/TUR, accessed 15
December 2019.

26

The Fraying Fundamentals

11 Mbaye, S. and M. Moreno Badia. 2019.
“New Data on Global Debt”. IMFBlog
post. 02 January 2019. https://blogs.imf.
org/2019/01/02/new-data-on-global-debt/
12 Bloomberg. 2019. “China’s Debt Ratio Is
Growing as Its Economy Loses Steam”.
Bloomberg News. 16 July 2019. https://www.
bloomberg.com/news/articles/2019-07-16/
china-s-debt-growth-keeps-marching-on-aseconomy-loses-pace
13 Faria-e-Castro, M. 2019. “Corporate Debt
Since the Great Recession”. On the Economy
blog post. 13 August 2019. Federal Reserve
Bank of St. Louis. https://www.stlouisfed.
org/on-the-economy/2019/august/corporatedebt-great-recession
14 IMF (International Monetary Fund). 2019.
Global Financial Stability Report: Lower forLonger. October 2019. https://www.imf.org/
en/Publications/GFSR/Issues/2019/10/01/
global-financial-stability-report-october2019#FullReport
15 Adrian, T. and F. Natalucci. 2019. “Lower forLonger: Rising Vulnerabilities May Put Growthat Risk”. IMFBlog post. 16 October 2019.
https://blogs.imf.org/2019/10/16/lower-forlonger-rising-vulnerabilities-may-put-growthat-risk/
16 Bloomberg. Rates & Bonds. https://www.
bloomberg.com/markets/rates-bonds,
accessed 03 January 2020.
17 Ibid.
18 ECB (European Central Bank). 2019. Interest
rates – Deposit facility. Effective from 18
September 2019. https://www.ecb.europa.
eu/home/html/index.en.html
19 Bank of Japan. 2019. The Bank’s Market
Operations – Interest Rate Applied to theComplementary Deposit Facility. https://www.boj.or.jp/en/index.htm/, accessed 15
December 2019.
20 ECB (European Central Bank). 2019. “EuroArea Banks: The Profitability Challenge”.
Keynote speech by Luis de Guindos, VicePresident of the ECB, at the ABI annual
conference “Banking Union and Basel III – risk
and supervision 2019”. 25 June 2019. https://www.ecb.europa.eu/press/key/date/2019/
html/ecb.sp190625~6d33411cff.en.html
21 EBA (European Banking Authority). 2019.
“Low Profits and High Costs Remain a
Key Challenge for the EU Banking Sector”.
Press Release, 04 October 2019. https://
eba.europa.eu/low-profits-and-high-costsremain-a-key-challenge-for-the-eu-bankingsector

22 Federal Reserve Bank of St. Louis. 2019.
FRED Economic Data – Return on Average
Equity for all U.S. Banks. https://fred.
stlouisfed.org/series/USROE, accessed 15
December 2019.
23 ECB (European Central Bank). 2019. Press
Conference. Christine Lagarde, President of
the ECB, Luis de Guindos, Vice-President of
the ECB. 12 December 2019. https://www.
ecb.europa.eu/press/pressconf/2019/html/
ecb.is191212~c9e1a6ab3e.en.html
24 IMF (International Monetary Fund). 2019.
2019. IMF DataMapper Database, “General
government gross debt – Percent of GDP”.
https://www.imf.org/external/datamapper/
GGXWDG_NGDP@WEO/CHN/FRA/DEU/
IND/GBR/USA/JPN/AUS/BRA/CAN/IDN/ITA/
KOR/MEX/RUS/SAU/ESP/CHE/NLD/TUR,
accessed 15 December 2019.
25 Nickel, C. and A. Tudyka. 2013. “Fiscal
Stimulus in Times of High Debt:
Reconsidering Multipliers and Twin Deficits”.
European Central Bank Working Paper SeriesNo. 1513. February 2013. https://www.ecb.
europa.eu/pub/pdf/scpwps/ecbwp1513.
pdf?5ad1bf48075ff73ccf045eca21f8d413
26 KPMG. 2019. Individual income tax rates
table. https://home.kpmg/xx/en/home/
services/tax/tax-tools-and-resources/taxrates-online/individual-income-tax-ratestable.html

31 The Gini coefficient scores 0 when income
in an economy is equally distributed among
every individual, and 1 when held by justone individual. See World Bank. WorldBank Open Data, “GINI index (World Bank
estimate) – Chile”. https://data.worldbank.
org/indicator/SI.POV.GINI?locations=CL,
accessed 15 December 2019.
32 Sheng, A. and X. Geng. 2019. “HongKong’s Real Problem Is Inequality”. Project
Syndicate. 27 August 2019. https://www.
project-syndicate.org/commentary/hongkong-protests-democracy-inequalityhousing-by-andrew-sheng-and-xiao-geng2019-08?barrier=accesspaylog
33 IMF (International Monetary Fund). IMF
Fiscal Monitor: Tackling Inequality. October
2017. https://www.imf.org/en/publications/fm/issues/2017/10/05/fiscal-monitoroctober-2017
34 Alderman, L. 2018. “Unrest in France Hinders
Macron’s Push to Revive Economy”. The New
York Times. 11 December 2018. https://www.
nytimes.com/2018/12/11/business/franceeconomy-macron.html; IMF (International
Monetary Fund). World Economic Outlook,
October 2019. Global Manufacturing
Downturn, Rising Trade Barriers. Washington,
DC: IMF. https://www.imf.org/en/
Publications/WEO/Issues/2019/10/01/worldeconomic-outlook-october-2019

27 This is the survey that feeds into the Forum’s
annual Global Competitiveness Report. It
was conducted between January and April
2019 and received 12,879 responses.

35 Vergara, E. 2019. “Chile Protests
Resume, Demonstrations Crimp
Economic Growth”. AP News. 05
November 2019. https://apnews.com/
d42ff6fca3c445a19783f59f984cb5a1

28 World Economic Forum, in partnership with
Marsh & McLennan Companies and Zurich
Insurance Group. 2019. Regional Risks for
Doing Business Report 2019. Insight Report.
Geneva: World Economic Forum. https://www.weforum.org/reports/regional-risks-fordoing-business-2019

36 Hong Kong Economy – The Governmentof the Hong Kong Special Administrative
Region. 2019. “Economic Situation in the
Third Quarter of 2019 and Latest GDP andPrice Forecasts for 2019”. Press Release, 15
November 2019. https://www.hkeconomy.
gov.hk/en/pdf/19q3_pr.pdf

29 Gaspar, V. and M. Garcia-Escribano. 2017.
“Inequality: Fiscal Policy Can Make theDifference”. IMFBlog post. 11 October 2017.
https://blogs.imf.org/2017/10/11/inequalityfiscal-policy-can-make-the-difference/

37 Schwab, K. 2019. “What Kind of Capitalism
Do We Want?” Project Syndicate. 2
December 2019. https://www.projectsyndicate.org/commentary/stakeholdercapitalism-new-metrics-by-klausschwab-2019-11

30 OECD (Organisation for Economic Cooperation and Development). 2019. OECD
Home, Social and welfare issues: Inequality.
http://www.oecd.org/social/inequality.htm

The Global Risks Report 2020

27

A
DecadeLeft
Confronting Runaway
Climate Threat
REUTERS/LUCAS JACKSON

Geopolitical and economic strains
discussed in previous chapters could
compromise efforts across many realms,
including and especially one in which we
simply cannot afford failure: climate change.
Indeed, “failure of climate-change mitigation
and adaption” is this year’s number one
long-term risk by impact and number

two by likelihood, according to survey
respondents. This chapter takes stockof the planetary risks of a warming climate
and assesses the capacities of government,
business and societies to face the urgent
and existential challenge of both mitigating
and adapting to climate change in the
coming decade.
29Governments, markets and, in an increasing
number of societies, voters are awakening
to the urgent realities of climate change—it
is striking harder and more rapidly thanmany expected.1 The last five years are on
track to be the warmest on record.2 Climaterelated natural disasters such as hurricanes,
droughts and wildfires are becoming more
intense and more frequent, reportedly now
averaging a disaster a week.3 Polar ice ismelting more quickly than anticipated,4 withdrastic implications for sea levels and coastal
populations.5 Severe weather is worsening:
the last year witnessed unprecedented
wildfires and devasting storms across theglobe,6 sea ice loss in the Arctic and recordbreaking heatwaves in Europe.
Global temperatures today are slightly over
1°C above pre-industrial levels. On the current
trajectory set out in countries’ nationallydetermined contributions (NDCs), which
remain largely unchanged in the wake ofthe most recent UNFCCC Conference ofParties in Madrid in December (COP 25),
that figure will rise to at least 3°C by the endof the century.7 Because each additional
degree of warming will be proportionallymore destructive, the damage will accelerate
and be exponential. To avoid the most
severe economic, social and environmental
consequences, climate experts warn that thetemperature rise must be limited to 1.5°C.8
This equates to a remaining carbon budget ofless than 10 more years of emissions at theircurrent level.9

Climate realities
The near-term consequences of climatechange add up to a “planetary emergency”.10
Implications are catastrophic, wide-ranging
and intersecting. Worse still, the complexityof the climate system means that some
impacts are still unknown. Establishedrisks include:

Loss of life
More and more species are becoming
extinct (see Chapter 4, Save the Axolotl).
Humans, too, will experience loss of life—
but potentially unequally. Women andchildren are 14 times more likely than men
to die during natural disasters, which are
likely to intensify or become more frequentbecause of climate change.11 The elderly
and infirm are also at higher risk.12 Climatechange will also lead to increased healthspillovers, burdening already stretched healthsystems, particularly for the poorest andmost vulnerable, including in many low- andmiddle-income countries,13 as explored in
Chapter 6, False Positive.

REUTERS/DARREN STAPLES30

A Decade Left

Stress on ecosystems
Oceans are getting warmer, stormierand more acidic, impacting the health ofsensitive marine ecosystems such as coral
reefs. As glaciers and ice sheets melt,
low-lying geographies will flood;14 indeed,by 2050, three times more people will be
impacted than previously thought.15 Thisrisk was explored in detail in the 2019
Global Risks Report chapter Fight or
Flight, which examined the intersection of
rapid urbanization and rising sea levels.
Additionally, a scenario in which ice-cap
melt creates disruption to the Gulf Stream
could cause further ecosystem disorder,
as well as major change in the pattern ofsevere weather perils. Another significant
unknown risk relates to the potential thawingof permafrost—frozen soil around the polesthat stores nearly twice as much carbon as
the atmosphere currently holds.16 If the soil
thaws, this carbon could be released with
unprecedented consequences.

Food and water crises
Crop yields will likely drop in many
regions, undermining the ability to double
food production by 2050 to meet risingdemand. Because agriculture, livestock anddeforestation produce nearly a quarter ofglobal emissions, more efficient use of landis critical; it’s also one of the best potential
carbon sequestration options.17 Water
scarcity will increase as well—it alreadyaffects a quarter of the world’s population.18

Increased migration
From 2008 to 2016, over 20 million people
a year have been forced from their homes
by extreme weather such as floods, storms,
wildfires and hotter temperatures.19 Tropical
Cyclone Idai, for example, displaced nearly
150,000 people in March 2019.20 Rising sea
levels will increasingly create refugees as people
flee low-lying areas. Indeed, defence andintelligence agencies are now regularly warningthat climate change could trigger conflicts
severe enough to uproot entire populations.

Exacerbation of geopolitical tensions
Countries will face more potential pointsof contention as climate change reshapes
the security of and access to historiccommon property resources, such as
fishing waters.21 Melting sea ice could
enable new shipping routes through the
Arctic, as well as opportunities for natural

resource extraction,22 all of which could
cause tension between countries alreadyat odds over unresolved maritime and landboundaries (see Chapter 1, Global Risks
2020).23 According to the UN, water wasa major factor in conflict in 45 countries
in 2017; disputes between upstream anddownstream areas will likely intensify.24
And as transition to a more decentralized,
renewable energy economy changes
geopolitical equations and creates newvulnerabilities for certain states and regions,states’ relative position in the international
system will shift as well.25

US$

165 billion

in worldwide economic stress anddamage from natural disasters in 2018

Economic impacts
Worldwide economic stress and damage
from natural disasters in 2018 totalled
US$165 billion, and 50% of that total wasuninsured.26 A report by federal agencies
suggests that, in the United States alone,
climate-related economic damage could
reach 10% of gross domestic product (GDP)by the end of the century.27 Over 200 of theworld’s largest firms estimated that climatechange would cost them a combined totalof nearly US$1 trillion in the case of nonaction. At the same time, there is broad
recognition among these same firms that
there are significant economic opportunities,
provided the right strategies are put inplace.28 Countries will also experience losses
unequally, with the highest economic costs
being felt by large economies, while risk of
exposure, death and non-economic costs ishigher in smaller, poorer economies.29

Capital market risks
Central banks increasingly see climatechange as a systemic risk to the global
capital market and recognize that
The Global Risks Report 202031

BOX 3.1

Transition Risks
Infrastructure materials. Technology is playing arole in developing low-carbon alternatives for iron,steel, glass and cement.

Technological

Mining and metals. The solar industry will
increase demand for aluminium. Copper,
lithium and cobalt demand will increase
multiple times by 2040.

Across many sectors, technological change isalready transformative and, in moving towards
lower carbon technologies, risks could include
stranding assets, reducing investment returns
and reducing market capitalization.

Mobility. The shift from fossil
fuels to hybrid, plug-in hybrid, fully
electric and hydrogen fuel cells isalready well underway.
Energy. The shift from oil
to gas, electrification,
renewables, nuclear andhydrogen will require novel
storing technologies andreforms in the productionof hydrogen.

Societal

Economic

Transition to a low-carbon economy
raises profound issues around thefuture job market, health and safety,
and the broader fate ofcommunities. For both investors
and workers, transitioning quickly,
effectively and equitably will be thisgeneration’s challenge.

A dramatic shift in the price of carbon—broadly seen as necessary to tackle climatechange—implemented in a short time frame without taking into account wider economic andequity issues could be viewed as a politically unpalatable transition risk for many decision-makers.
This is particularly the case given economic vulnerabilities already in place such as high debt,
negative interest rates, rising income inequalities and elevated geopolitical risks. International
initiatives such as the Carbon Pricing Leaders Coalition and national bi-partisan coalitions like the
Climate Leadership Council in the United States are working on practical solutions—such as
reallocating dividends from carbon pricing and adjusting border taxes—to these challenges. Morecomprehensive transition policy packages, which recognize these economic transition risks, suchas the European Green New Deal, are also being explored.

PHOTOS: REUTERS/MARCELO DEL POZO; WORAPUT/GETTY IMAGES; KEVIN YOUNG/UNSPLASH

non-action is not an option.30 More common
extreme weather events could makeinsurance unaffordable or simply unavailable
for individuals and businesses:31 globally,
the “catastrophe protection gap”—whatshould be insured but is not—reached
US$280 billion in 2018.32 The transition
to a low-carbon economy also creates
potential challenges that will need to be
managed. For example, action to reduce
emissions could turn approximately 30% of
32

A Decade Leftcurrent oil reserves, 50% of gas reserves
and 80% of coal reserves into stranded
assets for extractive companies and theirinvestors (see Box 3.1).33 Pension funds may
face catastrophic shortfalls as industries
consolidate and transition.34 Climate risk
may also cause disruption to the mortgage
market, particularly in vulnerable regions
such as Florida where 30-year mortgages
could default en masse if homes become
uninsurable over time.35

Trade, labour and supply
chain disruption
Climate change will affect trade by distorting
prices and disrupting supply chains.36 For
example, with the Artic sea ice melting at
a record pace, a northern route throughonce-impassable waters has “emerged asa potential global shipping artery.”37 Shifts
in seasonable temperature and rainfall willplace particular stress on economies reliant
on agricultural output,38 creating new winners
and losers in the trade sphere.39 The labour
force will experience impacts as well, andnot only in the structural transition to a lowcarbon economy: for example, heat stressresulting from global warming is projected tocause productivity losses equal to 80 million
full-time jobs in 2030.40

At a crossroads
For the future of climate change mitigation,2020 is a critical year: it presents thefirst opportunity for nations to revise
their national plans to tackle climatechange as set out under the 2015 Paris
Climate Agreement, and to close the gap
between what they have pledged andwhat is needed. An increasing number ofgovernments are announcing long-term
net-zero emissions goals and showing
more interest in tackling outstanding
challenges in developing potential lowcarbon solutions. These include creating
a low-carbon hydrogen supply chain atscale; reducing emissions through carbon
capture, use and storage; managing theintermittency of renewables with grid-scalestorage solutions; electrifying domestic
and commercial heating; better recyclingof electric car batteries; and mapping out
the future availability of the raw materials
needed to support the transition.
Nonetheless, achieving significant change
in the near term will depend on greatercommitment from major emitters. Failure to
seize 2020’s opportunity to mitigate climatechange will have three main consequences.
First, transition risks will increase (Box 3.1).
Further delay in reducing emissions will makeit harder to achieve carbon budget goals:
companies and markets will ultimately beforced to adjust more rapidly, which could
lead to higher costs, greater economic

disruptions, or draconian interventions
from panicked policy-makers that imperilmacroeconomic and financial instability.
Communities will also suffer if jobs are lost
without well-thought-through and equitabletransition plans in place.
Over 40 central banks and supervisors are
already examining how climate risks can be
integrated into their economic and financial
activities.41 The Bank of England has warned
that corporations in incumbent “dirty”
industries can expect to go bankrupt if they
fail to understand the risk of their businessmodels becoming obsolete as investment
flees to net-zero-emission alternatives.42
The Financial Stability Board’s Taskforce
on Climate-related Financial Disclosuresannounced recommendations in 2017that have driven boardroom discussions
regarding financial exposures and transition
strategies.43 Now supported by almost 900
companies, assessing financial risk of climatechange is becoming more mainstreamed.44
Governments are also moving towards
mandatory disclosure of climate risks bylisted companies.45 The investor community
is also responding to climate risk, with arecent notable development being the launchof the UN-convened Net Zero Asset Owners
Alliance at the 2019 United Nations Climate
Action Summit.46

Climate change is striking
harder and more rapidly thanmany expected
Second, the risk of unilateral geoengineering
gambles will become more likely. Failure
to implement effective regional or global
climate policies increases the risk thatcountries may decide unilaterally to
implement geoengineering projects suchas ocean fertilization or stratospheric aerosol
injection. This would risk further disruption
to ecosystems: one recent study, forexample, found that stratospheric sulphateaerosols could harm agricultural production,
cancelling out benefits from the reduction
in warming.47
The Global Risks Report 202033

And lastly, and perhaps most vital, is therisk that the specific multilateral process
mandated to address climate change loses
momentum and action on climate stalls.
For example, the recent failure at COP25
to develop a rule book for a new global
carbon market means there is not yet acredible system that would allow countries
to pay each other for projects that reduce
emissions. The risk here is not simply that
we lose an unaffordable five years, butthat the perception of failure drains morepolitical support from the multilateral process
and undermines the prospects for future
progress. However, encouraging steps
are already being taken by various newgeometries of governments, companies,
investors, sub-national entities and civilsociety working together on key areas ofclimate action, such as the energy andindustry transition, the mobilization of financeand agriculture, and nature-based solutions.
These multistakeholder efforts to advanceclimate action, as highlighted at the 2019 UN
Climate Action Summit, are becoming an
increasingly important component of
the international response. They are also

helpful mechanisms to bolster politicalconfidence that climate change can be
successfully tackled.

Can societies deliver?
Climate and corresponding economic risks
threaten a 2008-style systemic collapse,48
unless net human-caused carbon dioxide(CO2) emissions fall by 50% by 2030
relative to 2010, and to net zero by 2050.
Reaching these targets will require serious,interconnected economic and societal
transitions at macro and micro levels
that depend on technological innovationand commitment from governments andbusinesses. So far, however, commitments are
inadequate given the urgency of the challenge
and current trends are not encouraging.
Most critically, demand for energy iscontinuing to increase and much of thisdemand is still being met by fossil fuels.
Global energy demand rose by 2.3% in2018, the fastest pace in a decade.49 China,
the United States and India account fornearly 70% of the rise. Energy demand is
expected to grow even further—by over
25% by 2040—driven by population growth,
increasing incomes and urbanization: indeveloping economies, 1.7 billion people are
expected to move to urban areas in the next
two decades.50
There is a clear tension between calls to green
society and the drive, particularly in emerging
markets, to boost economic growth throughinvestment in carbon-heavy projects suchas roads, dams, energy resources, minesand ports. For example, coal power plants
built in Asia in the last decade accounted fornearly one-third of the total increase in CO2emissions in 2018.51 Global annual subsidies
for fossil fuels are approximately double thosefor renewable power.52
Beyond power generation, shifts in patternsof land use and how we manage our global
food systems are also needed to reducecarbon emissions: agriculture, deforestation
and wetlands development contribute 23%of all human-caused greenhouse gases.53
Many current food and land use investment
portfolios are often not consistent withdelivering even a warming scenario.54
Transitioning our carbon-based global

REUTERS/SEAN GARDNER
34

A Decade Left

agriculture system to practices such as
regenerative farming would require radical
shifts in subsidies and investment. Similarly,
about 10% of global emissions comesfrom the very high heat levels required to
produce commodities—such as cement,
steel and petrochemicals—and, although
low-carbon alternatives do exist, they are
currently costly.55 New public-private initiatives
such as the Mission Possible Platform,
launched at the UN Climate Action Summit in
September 2019, are designed to help heavy
industry sectors achieve net-zero emissions
by mid-century through collaboration withgovernments, international organizations
and investors.
Although there are financing roadmaps forgreen energy, there are serious financing
gaps for overall plans to mitigate and adapt
to climate change. The UN estimates
that, to meet 2030 goals for adaptation,
developing countries will need US$140 to
US$300 billion annually—much higher thancurrently available adaptation financing.56
Moreover, investments in climate-related
activities largely stay within wealthy nations’borders.57 Only 49 developing countries
have quantifiable climate-financing targets,and few of them look further than 2020,
rendering them largely irrelevant to climate
risks beyond this horizon.58
Aside from a number of vanguard firstmover champions, most companies, too,
appear ill-equipped to address climate risk.
Many do not yet quantify physical climate
risks in their direct operations and supply
chains, and those that do are likely to beunderestimating them significantly.59 In theWorld Economic Forum’s survey of businessleaders, none of the top 10 risks globally areenvironmental, suggesting a critical blind
spot.60 On the other hand, those businessleaders who are more exposed to climatechange discussions among their peers
become more aware of climate risks andthus become more likely to act. For example,
industry partners of the World Economic
Forum ranked environmental risks higher
than business leaders surveyed more
broadly.61 This awareness and concern forenvironmental risks is also likely influenced
by other business organizations that focus
on helping their members tackle climate
and other related issues, demonstrating
the importance of these networks andorganizations.62 Overall, lack of consistentawareness-raising among business leaders
may create first-mover advantages for some,but it also potentially demonstrates themuch more concerning overarching risk: thatmany businesses may not be planning forthe physical and financial risks that climatechange may have on their activities andacross their value chains.

2.3%

increase in global
energy demandin 2018

Consequently, businesses may also struggle
to anticipate future shifts in government
policy and customer preferences in timeto align their strategy—for example, therapid rise in consumer demand for nonplastic packaging took companies by
surprise. Increasing pressure to respond isgenerating transition risk at the individualcompany level as each company needs toreassess assets, reconcile trade-offs anddevelop new capabilities to move towards
a more sustainable model. At the sametime, there is growing acknowledgement
among some critical financial-sector playersthat environmental risks could threaten the
broader economic outlook, which could be asign of more positive shifts moving forward.63

A green social contract
Concern about climate change is increasing,64
particularly among young people, andthis could alter the paths societies take in
confronting the challenge. Political winds are
shifting: in 2019 climate change underpinned
the Greens’ surge in the European
Parliament elections;65 it also emerged asa key policy issue in the US Democraticpresidential primaries and in elections inAustralia, Canada and Switzerland.66 Most
recently, the European Commission, led byPresident Ursula von der Leyen, announced
a broad set of plans—the “European Green
Deal”—that is intended to re-evaluate theEuropean economy in light of environmental
risks.67 Climate activism also increased in
2019. The non-violent civil disobedience
The Global Risks Report 2020

35

Alongside the risks, the next decadebrings tremendous opportunity
movement Extinction Rebellion became
more mainstream, with groups forming in
72 countries.68 More remarkably, millionsof schoolchildren participated in organized“climate strikes”.69
In the long term, the mobilization ofyouth could lead to a new green social
contract reordering political and business
life, as today’s striking children gradually
become tomorrow’s voters, workers,
investors and consumers. Politicians willseek to attract them through policies suchas the Green New Deal legislation thathas been proposed in the United States.
As today’s youth demand jobs that arecompatible with their concern about climatechange, workforce climate activism may
become more common,70 and companies
without strong environmental credentials
could struggle for talent.71 Lastly, as
consumers, the new generation of climate

FIGURE 3.1

Share of Renewables, Low-Carbon
Sources and Fossil Fuels in Power
Generation, World 1990–2015% Units
40
35

Coal in power generation30
Low-carbon sources in power generation

25

In the short term, however, many current
voters may be unwilling to support transition
policies: in an age of economic anxiety anduncertainty, there is also concern about the
implications for cost of living, jobs and thecompetitiveness of high-carbon sectors. This
concern may pitch voters against climate
action or make their support for climate
policies ambiguous. For example, polling
before Canada’s election found that many
voters who identified climate change as a
key concern were nevertheless reluctant tobear any cost to tackle it.73 And Australia’s“climate change election”—which took place
before the recent wildfires—resulted in an
unexpected victory for a coalition opposed toaggressive action.74
New political and social dynamics (orevents such as dramatic natural disasters
that can be climate-related) may be making
available the policy space to embark on
the radical trajectory needed to mitigate
drastic warming. But building broadbased support for climate policies thatcan meet the Paris Agreement’s goals
will require convincing voters that a justtransition is possible. Policies that provide
for social protection programmes andjob training could help to limit disruption
and exacerbation of socio-economic
inequalities in the transition to a lowcarbon economy.

Gas in power generation

20

The resilience decade

15
Renewables in power generation

10
5

Oil in power generation

0
1990

1995

2000

2005

Source: IEA. Data and statistics, “Energy Transitions Indicators”,
https://www.iea.org/data-and-statistics

36

crusaders will make more sustainable
lifestyle choices, such as eating plant-based
diets or flying less, and demand more lowcarbon goods.72

A Decade Left

2010

2015

The next 10 years will shape the outlook
for climate risk for the rest of the century.
To avoid the worst consequences, global
emissions need to peak almost immediately
and decline precipitously—by 7.6% eachyear between 2020 and 2030.75 Thisimplies an additional US$460 billion a yearof clean energy investment over the next

decade.76 Far-reaching policies will beneeded to transform industrial
processes, transport, agriculture andland-use, alongside changes in consumer
behaviours to scale the necessary
critical solutions.77
As policies shift and societies transition,
options must be assessed holisticallybecause disorderly transition could
potentially exacerbate impacts with shortsighted responses. For example, materials
needed for low-carbon technologies suchas nickel, copper, cobalt and manganese
could be mined from the seabed—but the
impacts of deep-sea mining on ecosystems
and ocean health could offset its benefits.78
Likewise, the deployment of bioenergy withcarbon capture and storage could require
up to 700 mega hectares (an area twice
the size of India) for bioenergy crops by theend of the century 79—and at a time when
the global population may have reachednearly 11 billion people. Converting suchlarge swaths of land to monocultures has
clear consequences for food production
and nature. Geopolitical relationships will
shift as trade in fossil fuels becomes lesseconomically important.
Alongside the risks, the next decade brings
tremendous opportunity; technologicalbreakthroughs are happening all the time.
For example, most recently, a start-up
announced it had developed a way toharness artificial intelligence and mirrors
reflecting the sun to create the extreme
heat required for industrial processes—apotential game-changer for the source ofaround 10% of global emissions each year.80
Clean energy is increasing (see Figure 3.1)
while also getting cheaper and creatingjobs. The cost per unit of electricity fromonshore wind and photovoltaic solar power
plants has dropped by about 70% and 90%
respectively over the last decade.81 In mostcountries, it is now cheaper to install newwind or solar power stations than new coal
power plants.82 The International Renewable
Energy Agency estimates that shifting to
renewables could grow the world economy
by 1% a year until 2050, a cumulative gainof over US$52 trillion (see Figure 3.1).83
Other industries, such as agriculture
through regenerative growing practices, andfood production through meat alternatives,carry still-untapped potential.

REUTERS/CRACK PALINGGINew political and social dynamics may now
also be creating the policy space available toembark on the radical trajectory needed tomitigate drastic warming. At the same time,
adaptation needs to be given urgent priority,
not only to prepare for the possibility of very
dangerous levels of climate change in the
future, but also to eliminate the resilience
deficit we face today. A series of important
initiatives—such as the report from the
Global Commission for Adaptation, theCoalition for Climate Resilient Investment,
and the Just Rural Transition—were launchedin 2019 at the UN Climate Action Summit
as a package of measures on resilience.84
These initiatives aim to ensure infrastructure
investment, spark innovation on adaptationand set out a principles for a just transition,
among other goals.
The 2020s—the decade of delivery for the
Sustainable Development Goals—needs toalso be the resilience decade for climate.
Concerted action is required not only to
reduce emissions, but also to develop
credible adaptation strategies, including
climate-proofing infrastructure, closing theinsurance protection gap and scaling up
public and private adaptation finance. This
will require governments and businesses
to identify and prioritize risks and develop
metrics and strategies to manage them.85
The Global Risks Report 202037

Notes1

Oreskes, N., M. Oppenheimer and D. Jamieson. 2019. “Scientists Have Been Underestimating the Pace of Climate Change: A
Book Entitled Discerning Experts Explains
Why—and What Can Be Done about It”.
Scientific American. 19 August 2019. https://
blogs.scientificamerican.com/observations/scientists-have-been-underestimating-the-pace-of-climate-change/

2

Schwartz, J. and N. Popovich. 2019. “It’s
Official: 2018 Was the Fourth-Warmest
Year on Record”. The New York Times. 06
February 2019. https://www.nytimes.com/
interactive/2019/02/06/climate/fourth-hottestyear.html; Kaufman, M. 2019. “All the Ways
Climate Change Has Impacted Earth in 2019
(So Far)”. Mashable. 16 March 2019. https://mashable.com/article/climate-change-2019list/

3

Harvey, F. 2019. “One Climate Crisis Disaster Happening Every Week, UN Warns”.
The Guardian. 07 July 2019. https://www.
theguardian.com/environment/2019/jul/07/
one-climate-crisis-disaster-happening-everyweek-un-warns

4

The Economist. 2019. “The Greenland Ice
Sheet Is Melting Unusually Fast”. The Economist. 17 July 2019. https://www.economist.
com/graphic-detail/2019/06/17/the-greenland-ice-sheet-is-melting-unusually-fast?fsrc=gp_en?fsrc=scn/tw/te/bl/ed/thegreenlandicesheetismeltingunusuallyfastdailychart

5

6

Marsh & McLennan. 2019. The Burning Issue:
Managing Wildfire Risk. https://www.mmc.
com/insights/publications/2019/oct/wildfirepaper--oct--2019-.html

7

UNEP (United Nations Environment Programme). 2019. Emissions Gap Report2019. Nairobi: UNEP. https://wedocs.unep.
org/bitstream/handle/20.500.11822/30797/
EGR2019.pdf?sequence=1&isAllowed=y838

A Decade Left

Kulp, S. A. and B. H. Strauss. 2019. “NewElevation Data Triple Estimates of Global
Vulnerability to Sea-Level Rise and Coastal Flooding”. Nature Communications. 10(4844). 29 October 2019. https://www.
nature.com/articles/s41467-019-12808-z;
McGrath, M. 2019. “Climate Change: Global
Impacts ‘Accelerating’ – WMO”. BBC News.
28 March 2019. https://www.bbc.com/news/
science-environment-47723577

IPCC (Intergovernmental Panel on Climate
Change). 2018. Summary for Policymakers.
In Global Warming of 1.5°C: An IPCC Special
Report. Geneva: World Meteorological Organization. https://www.ipcc.ch/site/assets/
uploads/sites/2/2018/07/SR15_SPM_version_stand_alone_LR.pdf; https://www.ipcc.
ch/sr15/

9

In 2018, the IPCC estimated the remaining
carbon budget for a 66% chance of avoiding
1.5°C of temperature rise was 420 gigatonnes of CO2—about 10 times global annual
CO2 emissions from fossil fuels and land-use
change. See McSweeney, R. and R. Pearce.
2017. “Analysis: Just Four Years Left of the
1.5C Carbon Budget”. Carbon Countdown.
Carbon Brief. 05 April 2017. https://www.
carbonbrief.org/analysis-four-years-left-onepoint-five-carbon-budget

10 The Club of Rome. 2019. “Nations Should
Declare a Planetary Emergency Says Clubof Rome”. The Club of Rome. 24 September 2019. https://www.clubofrome.
org/2019/09/24/nations-should-declare-aplanetary-emergency-says-club-of-rome/;
see also Club of Rome. 2019. “Planetary
Emergency Plan”. https://www.clubofrome.
org/2019/09/23/planetary-emergency-plan/
11 UNDP (United Nations Development Programme). 2013. New York: “Gender and Disaster Risk Reduction”. Gender and Climate
Change: Asia and the Pacific Policy Brief 3.
UNDP. https://www.undp.org/content/dam/
undp/library/gender/Gender%20and%20Environment/PB3-AP-Gender-and-disaster-riskreduction.pdf
12 Christensen, J. 2019. “250,000 Deaths
a Year from Climate Change Is a ‘Conservative Estimate,’ Research Says”. CNN
Health. 16 January 2019. https://edition.cnn.
com/2019/01/16/health/climate-changehealth-emergency-study/index.html
13 Ebi, K. L., J. J. Hess and P. Watkiss. 2017.
“Chapter 8: Health Risks and Costs of
Climate Variability and Change”. In Injury
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ncbi.nlm.nih.gov/books/NBK525226/
14 IPCC (Intergovernmental Panel on Climate
Change). 2019. Special Report on the Ocean
and Cryosphere in a Changing Climate.
IPCC. https://www.ipcc.ch/srocc/home/
15 Kulp and Strauss. 2019. Op. cit.
16 Woods Hole Research Center. 2019. “Study:
Winter Carbon Emissions Shifting Permafrost
Region to a Carbon Source”. Post. 21 October 2019. https://whrc.org/study-winter-carbon-emissions-shifting-permafrost-region-toa-carbon-source/

17 IPCC (Intergovernmental Panel on Climate
Change). 2019. Special Report on Climate
Change and Land. IPCC. https://www.ipcc.
ch/report/srccl/; Seddon, N. S. Sengupta,
M. García-Espinosa, I. Hauler, D. Herr and
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18 World Resources Institute. 2019. “RELEASE:
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19 UNHCR (The UN Refugee Agency). 2016.
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25 IRENA (International Renewable Energy
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20 UNHCR (The UN Refugee Agency). 2019.
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29 Ricke, K., L. Drouet, K. Caldeira and M.
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21 Lanteigne, M. 2019. “The Changing Shape ofArctic Security”. NATO Review. 28 June 2019.
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30 Bank of England. 2019. “Open Letter on
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bankofengland.co.uk/news/2019/april/
open-letter-on-climate-related-financial-risks

22 The Economist. 2019. “Why Russia Is Ambivalent about Global Warming”. The Economist.
19 September 2010. https://www.economist.
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31 Nelson, A. 2019. “Climate Change Could
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23 Dellink, R., H. Hwang, E. Lanzi and J. Chateau. 2017. “International Trade Consequences of Climate Change”. OECD Trade andEnvironment Working Papers 2017/01. Paris:
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32 Bevere, L. 2019. Sigma 2/2019: Secondary
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The Global Risks Report 2020

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45 Robinson, N. 2019., “Are We Headed
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41 NGFS (Network for Greening the Financial
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42 Carrington, D. 2019. “Firms Ignoring Climate
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Change. Contribution of Working Group III to
the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Edenhofer, O., R. Pichs-Madruga, Y. Sokona, E.
Farahani, S. Kadner, K. Seyboth, A. Adler, I.
Baum, S. Brunner, P. Eickemeier, B. Kriemann,
J. Savolainen, S. Schlömer, C. von Stechow,
T. Zwickel and J.C. Minx (eds.)]. Cambridge,
UK and New York: Cambridge University
Press. https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_chapter11.pdf
54 FOLU (The Food and Land Use Coalition).
2019. Growing Better: Ten Critical Transitions
to Transform Food and Land Use. FOLU.
https://www.foodandlandusecoalition.org/
global-report/
55 Roberts, D. 2019. “This Climate Problem Is Bigger than Cars and Much
Harder to Solve”. Vox. 10 October 2019.
https://www.vox.com/energy-and-environment/2019/10/10/20904213/
climate-change-steel-cement-industrial-heat-hydrogen-ccs
56 UNEP (United Nations Environment Programme). 2018. The Adaptation Gap Report
2018: Health. UNEP. https://wedocs.unep.
org/bitstream/handle/20.500.11822/27114/
AGR_2018.pdf?sequence=361 Respondents to the Global Risks Perception
Survey were asked about global risks overa 10-year horizon, while respondents to the
Executive Opinion Survey were asked aboutrisks for doing business in their country overthe same horizon. The difference between
the questions may in part explain the varied
outcomes.
62 These organizations include, among others, theWorld Business Council for Sustainable Development (https://www.wbcsd.org/), the We Mean
Business coalition (https://www.wemeanbusinesscoalition.org/) and the UN Global Compact(https://www.unglobalcompact.org/).
63 See, e.g., BlackRock Investment Institute.
2019. Getting Physical: Scenario Analysis
for Assessing Climate Risks. Global Insights.
April 2019. https://www.blackrock.com/us/
individual/literature/whitepaper/bii-physicalclimate-risks-april-2019.pdf; Goldman Sachs
Research. 2019. “Taking the Heat: Making
Cities Resilient to Climate Change”. Goldman
Sachs Insights. 05 September 2019. https://www.goldmansachs.com/insights/pages/
taking-the-heat.html
64 Fagan, M. and C. Huang. 2019. “A Look at
How People around the World View Climate
Change”. Pew Research Center, Fact Tank.
18 April 2019. https://www.pewresearch.org/
fact-tank/2019/04/18/a-look-at-how-peoplearound-the-world-view-climate-change/
65 Henley, J. 2019. “European Elections: Triumphant Greens Demand More Radical Climate
Action”. The Guardian. 27 May 2019. https://www.theguardian.com/environment/2019/
may/28/greens-eu-election-mandate-leverage-climate-policy

59 Goldstein, A., W. R. Turner, J. Gladstone
and D. G. Hole. 2019. “The Private Sector’s
Climate Change Risk and Adaptation Blind
Spots”. Nature Climate Change 9 (2019):
18–25. https://www.nature.com/articles/
s41558-018-0340-5

66 Morton, A. 2019. “How Australia’s Election
Will Decide Its Role in Climate Change”.
Nature. 16 May 2019. https://www.nature.
com/articles/d41586-019-01543-6; Turner,
C. 2019. “The ‘Climate Change Election’ Is
Over. What Happens Now?“ The Globe andMail. 25 October 2019. https://www.theglobeandmail.com/opinion/article-the-climatechange-election-is-over-what-happens-now/;
Henley, J. 2019. “Green Surge Expected in
Swiss Elections as Climate Concern Grows”.
The Guardian. 18 October 2019. https://www.theguardian.com/world/2019/oct/18/
green-surge-expected-in-swiss-elections-asclimate-concern-grows

60 World Economic Forum, in partnership with
Marsh & McLennan Companies and Zurich Insurance Group. 2019. Regional Risks
for Doing Business Report 2019. Insight
Report. Geneva: World Economic Forum.
https://www.weforum.org/reports/regional-risks-for-doing-business-2019

67 Harvey, F., J. Rankin and D. Boffey. 2019.
“European Green Deal Will Change Economy to Solve Climate Crisis, Says EU”. The
Guardian. 11 December 2019. https://www.
theguardian.com/environment/2019/dec/11/
european-green-deal-will-change-economyto-solve-climate-crisis-says-eu

57 Yeo, S. 2019. “Where Climate Cash Is Flowing and Why It’s Not Enough”. Nature. 17
September 2019. https://www.nature.com/
articles/d41586-019-02712-3
58 UNEP. 2018. The Adaptation Gap Report
2018: Health. Op. cit.

The Global Risks Report 2020

41

68 Snaith, E. 2019. “Extinction Rebellion: Who
Are the Climate Activist Group Bringing Cities
to a Standstill and What Are Their Aims?”
Independent. 07 October 2019. https://www.
independent.co.uk/news/uk/home-news/extinction-rebellion-who-why-protests-climatechange-london-arrests-xr-a9143746.html

77 Committee on Climate Change. 2019. Net
Zero: The UK’s Contribution to Stopping
Global Warming. May 2019. London: Committee on Climate Change. https://www.
theccc.org.uk/wp-content/uploads/2019/05/
Net-Zero-The-UKs-contribution-to-stoppingglobal-warming.pdf

69 Barclay, E. and B. Resnick. 2019. “How Big
Was the Global Climate Strike? 4 Million People, Activists Estimate. It Was Likely the Largest Climate Protest in World History”. Vox. 22
September 2019. https://www.vox.com/energy-and-environment/2019/9/20/20876143/
climate-strike-2019-september-20-crowd-estimate

78 Gallagher, M. B. 2019. “Understanding the
Impact of Deep-Sea Mining”. MIT News. 5
December 2019. http://news.mit.edu/2019/
understanding-impact-deep-sea-mining-1206

70 Weise, K. 2019. “Over 4,200 Amazon
Workers Push for Climate Change Action,
Including Cutting Some Ties to Big Oil”. The
New York Times. 10 April 2019. https://www.
nytimes.com/2019/04/10/technology/amazon-climate-change-letter.html
71 Raval, A. and L. Hook. 2019. “Oil and Gas
Advertising Spree Signals Industry’s Dilemma”. Financial Times. 06 March 2019. https://www.ft.com/content/5ab7edb2-3366-11e9bd3a-8b2a211d90d5
72 BBC News. 2019. “‘Flight Shame’ Could
Halve Growth in Air Traffic”. BBC News. 02
October 2019. https://www.bbc.co.uk/news/
business-49890057
73 Connolly, A. 2019. “Canadians Want to Stop
Climate Change—But Half Don’t Want toPay an Extra Cent: Ipsos Poll”. Global News.
26 September 2019. https://globalnews.ca/
news/5948758/canadians-climate-change-ipsos-poll/
74 Rachman, G. 2019. “The Perilous Politics
of Climate Change”. Financial Times. 01
July 2019. https://www.ft.com/content/70f290de-9bd8-11e9-9c06-a4640c9feebb;
Murphy, K. 2019. “Scott Morrison Says
Australia’s Record on Climate Change
Misrepresented by Media”. The Guardian.
25 September 2019. https://www.theguardian.com/australia-news/2019/sep/26/
scott-morrison-says-australias-record-on-climate-change-misrepresented-by-media
75 UNEP. 2019. Op. cit.
76 Timperley, J. 2018. “Clean Energy Investment‘Must Be 50% Higher’ to Limit Warming to
1.5C”. CarbonBrief. 18 June 2018. https://www.carbonbrief.org/clean-energy-investment-must-be-50-per-cent-high-limit-warming-one-point-five42

A Decade Left

79 Smith, P., S. J. Davis, F. Creutzig, S. Fussand C. Yongsung. 2016. “Biophysical andEconomic Limits to Negative CO2 Emissions”. Nature Climate Change 6 (2016):
42–50. https://www.nature.com/articles/nclimate2870
80 Egan, M. 2019. “Secretive Energy Startup
Backed by Bill Gates Achieves Solar Breakthrough”. CNN Business. 19 November 2019.
https://edition.cnn.com/2019/11/19/business/heliogen-solar-energy-bill-gates/index.html
81 Lazard. 2018. “Levelized Cost of Energy andLevelized Cost of Storage 2018”. Insights. 08
November 2018. https://www.lazard.com/
perspective/levelized-cost-of-energy-andlevelized-cost-of-storage-2018/
82 Ellsmoor, J. 2019. “Renewable Energy Is Now
the Cheapest Option—Even without Subsidies”. Forbes. 15 June 2019. https://www.
forbes.com/sites/jamesellsmoor/2019/06/15/
renewable-energy-is-now-the-cheapest-option-even-without-subsidies/#180bcaed5a6b
83 Amin, A. Z. 2018. “A Just and Fair Energy
Transition: An Opportunity to Tackle Climate
Change and Create Prosperity”. IRENA article. 13 December 2018. https://www.irena.
org/newsroom/articles/2018/Dec/An-Opportunity-for-Poland-and-the-World-to-TackleClimate-Change
84 United Nations. 2019. Report of the Secretary-General on the 2019 Climate Action
Summit and The Way Forward in 2020.
Climate Action Summit 2019. https://www.
un.org/en/climatechange/assets/pdf/cas_report_11_dec.pdf
85 Zurich. 2019. Managing the Impacts of Climate Change: Risk Management Responses—Second Edition. Zurich: Zurich Insurance
Company. https://www.zurich.com/en/
knowledge/topics/global-risks/managing-impacts-climate-change-risk-management-responses-second-edition

REUTERS/ERIK DE CASTRO

Save theAxolotl

Dangers of Accelerated Biodiversity Loss
REUTERS/BRUNO KELLY

Human-driven nature and biodiversity loss
is threatening life on our planet. The previous
chapter assessed where the world stands
in 2020 in the face of existential climate risk.
This chapter considers the other side of thesame coin: how destabilizing tipping points innature could exacerbate the socialand economic consequences of climate
risk. At the same time, understanding
nature’s benefits could help societies
leverage opportunities to stem theplanetary emergency.
45

REUTERS/DAVID LOH

The axolotl, arguably one of the world’s most recognizable salamanders, has a unique ability to regenerate severed
limbs, which unlocks medicinal and scientific opportunities for everything from tissue repair to development andcancer. After centuries of inbreeding, captive populations are at risk and scientists could lose the opportunity tolearn vital information about the animal’s biology that could have significant benefits for human health.1

On the loss of species
All species, including humans, depend fortheir survival on the delicate balance of lifein nature.2 Yet biodiversity—the diversity
within species, between species, and within
ecosystems—is declining faster than it has
at any other time in human history.3 The
current rate of extinction is tens to hundredsof times higher than the average over the
past 10 million years—and it is accelerating.4
Although the world’s 7.6 billion people
represent just 0.01% of all living creatures,
humanity has already caused the loss of
83% of all wild mammals and half of plants.5
If low estimates of the number of species
are accurate—around 2 million—between
200 and 2,000 extinctions are occurring
every year. At the upper end of the estimate,between 10,000 and 100,000 species aregoing extinct each year.6 How we grow46

Save the Axolotl

food, produce energy, dispose of waste andconsume resources is destroying nature’s
delicate balance of clean air, water and lifethat all species—including humans—depend
on for survival.7
Human activity endangers biodiversity in atleast five main ways.8 First, agricultural andindustrial expansion has led to the loss ofover 85% of wetlands, altered 75% of land
surface, and impacted 66% of ocean area.
A second powerful threat is in the
exploitation of plants and animals throughharvesting, logging, hunting and fishing.
Third, pollution: habitats are being destroyedby untreated waste; by pollutants fromindustrial, mining and agricultural activities;
and by oil spills and toxic dumping. Marine
plastic pollution alone has increased
tenfold since 1980. A fourth critical driverof biodiversity loss is the introduction ofBiodiversity is declining faster than it has
at any other time in human history
non-indigenous species that edge out
native ones; this has increased by 40%
globally over the same period. Fifth, climatechange exacerbates nature loss, which inturn reduces nature’s resilience to climatechange—a vicious circle.9
Less directly, losses of biodiversity are
driven by population growth, trade,consumption patterns and urbanization.10
By 2030, cities are expected to cover threetimes as much land as they did in 2000, withmany of the expansions occurring in key
biodiversity hotspots.11 Inadequate export
controls have facilitated the spread of invasive
species, pests and diseases, which aggravate
a quarter of plant extinctions and a third ofanimal ones.12 Demand for food will morethan double by 2050; meeting this demand
will require an additional billion hectaresof land—an area the size of Canada13—orincreasing yields on existing land through theuse of fertilizers and pesticides, which also
contribute to biodiversity loss.

Implications for humanity
The dramatic loss of biodiversity brings
serious risks for societies, economies
and the health of the planet. Sir Robert
Watson, chair of the Intergovernmental
Science-Policy Platform on Biodiversity andEcosystem Services (IPBES),14 observes:“Biodiversity and nature’s contributions topeople sound, to many people, academic
and far removed from our daily lives.
. . . Nothing could be further from thetruth—they are the bedrock of our food,clean water and energy.”15 Humans relyon biodiversity in fundamental ways,
from pollinating crops to curing diseases.
Biodiversity loss has also come to threaten
the foundations of our economy: one
attempt to put a monetary value on goods
and services provided by ecosystems
estimates the worth of biodiversity at US$33
trillion per year—close to the GDP of theUnited States and China combined.16 Risks
arising from biodiversity loss include:

Food insecurity
Biodiversity underpins the world’s foodsystem.17 It creates and maintains healthysoils, pollinates plants, purifies water andprotects against extreme weather events,
among other vital services.18 The ongoingloss of diversity in indigenous domesticatedplants and animals is undermining theresilience of agricultural systems against
pests, pathogens and climate change.19
Declining diversity of fish species iscorrelated with lower catches andhigher incidence of stock
collapse.20 A new reportfrom the United Nations’Intergovernmental
Panel on Climate
Change (IPCC) identifies
another risk: increased
carbon-dioxide levels
are lowering thenutritional value offood staples such as
rice and wheat.21

83%

wild mammal
species loss
caused by humanity

Health risks
Well-functioning ecosystems support
human health by providing clean air andwater and a source of medicines.22 An
estimated 50,000–70,000 plant species
are harvested for traditional or modern
medicine,23 and around 50% of modern
drugs were developed from natural
products. Researchers are increasingly“reverting to nature” to look for new
therapeutic options, efforts that are
threatened by biodiversity loss.24 Species
currently endangered by biodiversity loss
include the South American cinchona tree,
the source of the malaria drug quinine.25
In many cases, natural molecules for
medical treatments are so complex thatscientists are not yet able to chemicallysynthesize them, so they must harvest andstore plants and seeds.26 Some threatenedorganisms are critical for medical research:
the Mexican axolotl (described above), forexample, has unique characteristics thatenable instructive comparisons with thehuman genome.27
The Global Risks Report 2020

47

50

%

modern drugs
developed fromnatural products

crisis: these microscopic plants that drift
at the sea surface absorb carbon dioxide
on a scale comparable to the world’s
forests,29 and they are threatened bywarming oceans.30

Business risk
The destruction of nature will inevitably
impact bottom lines—for example,
through reduced fish stocks disrupting
commodity supply chains, economic
losses from disasters such as flooding,and the loss of potential new sourcesof medicine. Extractives, construction,energy, fashion and textiles are among
the sectors especially vulnerable toecological destruction.31 All businesses
should account for ecological risks to theiroperations and reputations, yet few do: arecent study of Fortune 500 companies
found that nearly half mentioned biodiversity
in their sustainability reports, but only fiveset specific, measurable and timeboundtargets.32 Nature-related risks areundervalued in business decision-making.

Exacerbation of climate change
Terrestrial and marine biodiversity together
support the reduction of greenhouse gas
emissions and the conservation of carbon
sinks, sequestering 5.6 gigatonnes ofcarbon per year—the equivalent of 60% of
global human-driven emissions. The healthof ecosystems that sequester carbon candepend on individual species: for example,
endangered forest elephants are vital tothe health of Central Africa’s rainforests.
Collapse of this ecosystem could release
3 billion tons of carbon, the equivalentof France’s emissions for 27 years.28
Phytoplankton provide another exampleof how depletion of species and ecosystems
could exponentially worsen the climate

FIGURE 4.1

Species Decline: Insects
Proportion of species
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1

Decline <30%

Vulnerable

Endangered

Coleoptera(dung beetle)

Trichoptera

Lepidoptera(moths)Coccinelidae

Lepidoptera

Apidae(bees)

Orthoptera

Hymenoptera

Carabidae

OdonataEphemeroptera

Plecoptera

Sirphidae

Cerambycidae

Hemiptera(hoppers)0

Extinct

Data source: Sánchez-Bayo, F. and K. A. G. Wyckhuys. 2019. “ Worldwide Decline of the Entomofauna: A Review of its Drivers”. B
 iological Conservation 232(April 2019): 8–27. https://www.sciencedirect.com/science/article/pii/S0006320718313636

48

Save the Axolotl

Indigenous community livelihoodand culture risks
Indigenous communities often rely on theirdiverse local ecosystems for food and otherresources: for example, 60% of the world’s
indigenous population uses largely plantbased traditional medicines.33 And the rest of
humanity relies on indigenous communities
to be stewards of ecosystems, protecting
and preserving environmental resources.
Indigenous peoples comprise less than 5%of the world’s population but protect 80% of
its biodiversity.34
Beyond these known risks are unknowable
losses—the risk of losing species we have
not yet discovered that could have been
domesticated for crops or given rise to new
medicinal breakthroughs. For example,
the ocean represents a “virtually untappedresource for discovery of novel chemicals
with pharmaceutical potential,”35 and recent
bacterial samples from coastal sediments
grown under saline conditions haveyielded new antibiotic, antitumor and antiinflammatory compounds.36 Another recently
discovered ocean organism, a rare genus
of marine bacteria called Serinicoccus, wasshown to selectively destroy melanoma
cancer cells.37 With continued loss of
biodiversity, we may never know what wehave missed out on.

Imagine if ...
Many and varied ecosystems are in decline
or at risk of destruction from human activity.
While their complexity makes it very hardto predict which losses would be mostconsequential, it is clear the stakes are high.
Here we consider three potential ecosystem
collapses or extinctions that could haveprofound impacts for humanity and the Earth.

Insect decline
A world without insects, according to one
entomologist, would be a “flowerless world
with silent forests, a world of dung and oldleaves and rotting carcasses accumulatingin cities and roadsides.”38 One recent study
estimates that insects have declined by
40% in recent decades (see Figure 4.1),
and a third are endangered.39 It identifies
deforestation, urbanization, pollution andthe widespread use of pesticides incommercial agriculture as the principal

REUTERS/ARND WIEGMANN

causes. Insects are the main food source
for many species higher in the food chain,such as birds, reptiles, amphibians and fish.
As the author of the study points out, “[if] thisfood source is taken away, all these animals
starve to death.” 40
Insects are also the world’s top pollinators:
75% of the 115 top food crops rely on
animal pollination, including nutrient-richfoods like fruit, vegetables, nuts and seeds,
as well as cash crops such as coffee andcocoa.41 Dwindling insect populations will
force farmers to seek alternative means ofpollination,42 or shift to staple crops that
do not rely on pollinators. However, thesecrops—such as rice, corn, wheat, soybeansand potatoes—are often energy-dense,
nutrient-poor and already over-consumed
globally, contributing to an epidemic ofobesity and diet-related disease.43 Increasing
their prevalence in the food supply at theexpense of fruits, nuts, vegetables and seeds
could exacerbate this global health crisis (seeChapter 6, False Positive).
Approximately 1 million insect species havebeen documented, but “untold millions await
discovery.”44 As with the broader communityof species discussed above, it is impossible
to know what humanity could lose from theextinction of insect species that are not yet
known to science.
The Global Risks Report 202049

Nature-related risks are undervalued inbusiness decision-making
REUTERS/ANDY CLARK

Coral reef collapse
Coral reefs are home to some of the planet’s
most biodiverse ecosystems. They are
critical to ocean health: although they makeup less than 1% of the ocean floor, 25% offish species rely on reefs for at least partof their life cycle.45 Ocean reefs contributeto the livelihoods of at least 500 million
people worldwide, mostly in less-developed
economies.46 Coral reefs generate US$36
billion per year for the global tourism industry,
with the Great Barrier Reef in Australia
accounting for more than 15% of that total(US$5.7 billion).47 They provide vital protection
from coastal flooding and storm surges: one
recent study found that losing just the top
layer of coral could result in US$4 billion morein flood damages per year.48
50

Save the Axolotl

Coral reefs are threatened partly by
overfishing, industrial activity and pollution,but even more by the planet’s rapid warming.
When the water surrounding them becomes
too warm, corals expel the algae living within
the tissue of the reef, turning the corals
white—also known as “coral bleaching”.
If corals are bleached for prolonged periods,
they will die. A recent study found thatsevere marine heatwaves can lead not justto bleaching, but also to the immediate
death of reefs.49 If global temperatures
stabilize at an increased 1.5°C, coral reefs
could decline by 70% to 90%; with higher
rises, they would disappear.50
The disappearance of coral reefs could
have dire consequences for life on landas well as in the ocean. Up to 80% of theoxygen humans breathe comes from theocean.51 Without reefs, coastal communities
would be more vulnerable to storms,
and migration away from low-lying
population centres and islands could
increase. As the oceans “become largely
lifeless or at least extremely transformed”,52
the fishing and tourism industries could be
wiped out. In some regions, collapsing fishstocks could increase security risks, suchas piracy and terrorism.53

Disappearance of the Amazon
Around 12 million hectares of tropical forestworldwide were lost in 2018, equivalent to30 football fields per minute.54 The Amazon
alone has lost approximately 17% of its
size over the last 50 years, and rates ofdeforestation have been rising since 2012.55
The Amazon now absorbs around a third
less carbon than it did a decade ago,56 anda recent study found that increasing dryness
in the atmosphere is leaving ecosystems
even more vulnerable to fire and drought.57
The rapid disappearance of more of therainforest could exacerbate the effects ofclimate change: if 20% to 25% of the forest is
lost, scientists warn that the Amazon could
pass a tipping point where a vicious cycleof drought, fire and canopy loss takes holdthat cannot be stopped. This tipping point
could be reached within decades.58 The
destruction of the forests of Borneo offer anominous precedent: mass deforestation andfires there have led to the loss of over 50% of
lowland tropical rainforest.59
Because the Amazon is the world’s mostdiverse ecosystem and home to about 10%of terrestrial species,60 its destruction means
potentially undiscovered cures for disease
would be lost forever. More intense fires
and flooding in the region, as well as moreunpredictable rainfall patterns and droughts,
could also ensue. This would undermine
food production, increase water scarcity
and reduce hydropower generation, witheconomic costs exceeding US$3 trillion.61
Global agricultural markets might suffer
as well,62 since Brazil is one of the world’s
largest agricultural exporters of products
including soybeans, maize and meat. A
significant decline in Brazil’s agricultural
output could increase volatility of foodprices, which history shows can trigger
instability and contribute to long-term

deteriorations in security. Indigenous
communities who rely on the rainforest
would struggle and possibly disappear. The
tourism industry, critical for South American
economies, could be badly affected.

No silver bullet
The UN declared 2010 to be the InternationalYear of Biodiversity. Notwithstanding theappearance of biodiversity as a top risk byboth likelihood and impact on the GRPS (seeFigure II, The Global Risks Landscape 2020),
10 years later, general confusion persists
about what precisely biodiversity is, why
it relates to human prosperity and how to
confront its loss. Achievement of the Aichi
Biodiversity Targets for 2020 has lagged.63
Since the targets were set in 2011, global
production of metals, minerals, fossil fuelsand biomass has increased by more than
20%, while an area larger than Mexico has
been deforested.

80%

oxygen that humans
breathe comesfrom the ocean

Solutions to stemming biodiversity loss
will be as complex as the problem itself.
No longer can nature be protected by either“sparing” (preserving areas of land where
species can thrive away from production)or “sharing” (integrating processes where
nature and food production coexist).64 Bothapproaches are required and both will
involve trade-offs: how should biodiversity
be weighed against social and economic
imperatives such as food production andeconomic development? For example,
organic agriculture avoids the use ofharmful chemicals but might require moreland for comparable yields.65 Similarly, theproduction of biofuels and bioenergy withcarbon capture and storage (BECCS) is apotential game-changer for negative carbon
emissions.66 However, BECCS
also uses large swaths of agriculturalland, with implications for future socioeconomic developments, food security
and biodiversity management.
The Global Risks Report 202051

Bio-economic transitions would create
feedback loops that must also be
considered. For example, developing
climate-resistant crop varieties could
help farming systems adapt to a warming
planet—but deepening our reliance on a
handful of staple crops grown in largescale, intensive monoculture farming
systems could ultimately undermine theresilience of the food system by reducing
genetic diversity and increasing vulnerability
to pests and disease.67 On a smaller scale,urban tree-planting might actually result ina net loss of street-tree carbon storage overtime because of the “unique demographics
of urban ecosystems”.68

70

Inequities in development trajectories thatcharacterize the climate debate are also
inherent in any coordinated response tobiodiversity loss. Certain
countries, for example,
may incur a stiffer penalty
for the protection of theplanet by virtue of theirgeography and natural
resources. However,conservation efforts do
not necessarily require
trade-offs in development
priorities or human rights.69
In fact, efforts to address
declining biodiversity ought
to be inextricably linked
to other social agendas,
such as poverty alleviation,
healthcare, disaster relief and protectionof human rights.70 It is vital to expand
discussion around biodiversity loss to include
researchers from non-empirical disciplines
as well as farmers, indigenous communities,businesses and other stakeholders.

%

agricultural land
use accounted
for by livestock
sector

The new nature economy
While trade-offs may be unavoidable, there
are also potential “win-wins”. Consider diets.
The livestock sector accounts for 70% of
agricultural land use;71 it is also responsible
for about 14% of global greenhouse gas
emissions.72 Reducing meat consumption
would be good for nature and the climate. Ina growing number of countries it would begood for people as well, as overconsumptionof meat could be leading to worse healthoutcomes.73 Another win-win example is the52

Save the Axolotl

circular economy, in which waste is designed
out and materials are kept in use for as longas possible: besides helping to decouple
resource demand from economic growth,
this can contribute to lower emissions andless habitat loss.
There is also a business rationale forpreserving or restoring natural ecosystems.74
On average, the costs of restoration are
outweighed tenfold by its benefits tocommunities.75 Restoring coastal mangroves,for example, can protect land from storm
surges and coastal erosion, develop fisheries
and support ecotourism. Investing in therestoration of wetlands, mangroves andcoral reefs could reduce insurance costs
for businesses in coastal areas vulnerable
to flooding. Likewise, financing ecologicalforestry practices could reduce insurance
costs for businesses, such as power andwater utilities, that are exposed to wildfire
risks.76 According to the Organisation for
Economic Co-operation and Development(OECD), restoring 46% of the world’s
degraded forests could provide up to US$30
in benefits for every dollar spent, boosting
local employment and increasing community
awareness of biodiversity’s importance.77
A critical challenge for the biodiversity
agenda will be finding investment models
that mobilize private finance to capture ashare of this opportunity. New approaches
are emerging, such as resilience-financing
structures through which businesses caninvest in the restoration of ecosystems inreturn for a reduction in insurance premiums
or risk-financing costs. Better data to trackthe effectiveness of investments will be
critical. However, given the sums involved—
one estimate puts the current cost ofprotecting biodiversity at US$100 billion per
year78—public funding will also be needed.
Habitat protection and restoration are highly
beneficial public goods for which government
investment is more than justified. The People’s
Bank of China, for instance, now offers capitalrelief for banks that make green loans.79
The International Union for Conservation of
Nature is developing a species conservation
metric that will help companies, banks andgovernments to quantify their contribution.80
A renewed interest in nature-based solutions
can help combat climate change as well as
mitigate the exacerbating effects of natureloss on the climate.

REUTERS/PAOLO SANTOS

Beyond policy interventions, stemming theimpacts of biodiversity loss may requirea fundamental shift in thinking about theeconomic value of nature. Gross domestic
product (GDP), the primary performanceindicator for economies, fails to account for“natural capital”—the stock of a country’s
ecosystems, natural resources and humancapital.81 Businesses, governments andindividuals would be better served byanother metric—or series of metrics—that
more accurately describes an economy’s
overall health, thus incorporating the costsof ecosystem degradation. The Gaborone
Declaration for Sustainability in Africa, forexample, is encouraging member countries
to use metrics such as “ecosystem valuation”
and “natural capital accounting” in measuring
economic activity and decision-making.82
The most effective solutions may imply
significant disruption or shifts to existing
business models. For example, the fashionindustry could reduce its impacts on
biodiversity by shifting towards transforming
old clothes into new ones and creating
garments that are durable rather thandisposable—an opportunity worth US$560
billion.83 Extractive industries’ negative
impacts on biodiversity could be mitigated
if mining companies were to move to a
resource services model,84 in which thecompanies retain ownership of metals overtheir lifecycle and keep them in use for as
long as possible.

Later in 2020, governments will gather in
Kunming, China, to revisit global targets
on protecting ecosystems and halting
species loss. This is a critical moment: asclimate change exacerbates ecosystem
collapse, we could be causing irreversible
ecosystem damage with serious economic
and social consequences.85 Some of
the most serious impacts will not occur
gradually, but rather suddenly and violently,
as critical thresholds are breached.
Messaging around biodiversity loss andits impacts is key to underscoring themeaning and impact of biodiversity loss
for societies. Consumers also have a roleto play in demanding sustainable policymaking and products.
The rapid degradation of our life support
system means a lot more is needed. As
we find ourselves at the doorstep of the“sixth mass extinction”, both businesses
and regulators have a huge role to playin shifting paradigms about who pays forthe externalities created by business-asusual. The World Economic Forum will
be publishing the New Nature Economy
Report—to be released in three parts during
2020—setting out risks, key transformation
pathways and financing for a naturepositive economy. We have the science andevidence required to pivot in this direction,
but there is an acute need for champions
who can shift systems and prioritize
investment for safeguarding nature.
The Global Risks Report 202053

Notes1

Vance, E. “Biology’s Beloved Amphibian —The Axolotl — Is Racing Towards Extinction”.
Nature. 15 November 2017. https://www.
nature.com/articles/d41586-017-05921-w

2

Borenstein, S. 2019. “UN Report: Humans
Accelerating Extinction of Other Species”. AP
News. 06 May 2019. https://www.apnews.
com/aaf1091c5aae40b0a110daaf04950672

3

54

Save the Axolotl

IPBES (Intergovernmental Science-Policy
Platform on Biodiversity and Ecosystem Services). 2019. Summary for policymakers of
the global assessment report on biodiversity
and ecosystem services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, Unedited
Advance Version, 06 May 2019. See also UN
Convention on Biological Diversity (https://www.cbd.int/, which defines “biodiversity” as“the variability among living organisms fromall sources including, inter alia, terrestrial,
marine and other aquatic ecosystems andthe ecological complexes of which they are
part; this includes diversity within species,
between species and of ecosystems”).

4

IPBES. 2019. Op. cit.

5

Bar-On, Y. M., R. Phillips, and R. Milo. 2018.
“The Biomass Distribution on Earth”. PNAS
115 (25): 6506–11. https://www.pnas.org/
content/115/25/6506

6

WWF (World Wildlife Fund). 2019. “How Many
Species Are We Losing?” Our Work, How
Much Is Being Lost? https://wwf.panda.org/
our_work/biodiversity/biodiversity/

7

Borenstein. 2019. Op. cit.

8

IPBES. 2019. Op. cit.

9

See also IPCC (Intergovernmental Panel on
Climate Change). 2018. Summary for Policymakers. In Global Warming of 1.5°C: An IPCC
Special Report. Geneva: World Meteorological Organization. https://www.ipcc.ch/site/
assets/uploads/sites/2/2018/07/SR15_SPM_
version_stand_alone_LR.pdf; https://www.
ipcc.ch/sr15/

12 Blackburn, T. M., C. Bellard, and A. Ricciardi.
2019. “Alien Versus Native Species as Driversof Recent Extinctions”. Frontiers in Ecology
and the Environment 17 (4): 203–07. https://
esajournals.onlinelibrary.wiley.com/doi/
abs/10.1002/fee.2020
13 Tilman, D., C. Balzer, J. Hill, and B. L. Befort.
2011. “Global Food Demand and the Sustainable Intensification of Agriculture”. PNAS
108 (50): 20260–64. https://www.pnas.org/
content/108/50/20260
14 Based on a review of about 15,000 scientificand government sources and compiled by
145 expert authors from 50 countries, theglobal report (IPBES. 2019. Op. cit.) is the firstcomprehensive look in 15 years at the stateof the planet’s biodiversity.
15 IPBES (Intergovernmental Science-Policy
Platform on Biodiversity and Ecosystem Services). 2018. “Media Release: Biodiversity andNature’s Contributions Continue Dangerous
Decline, Scientists Warn: Human Well-Being at
Risk. Landmark Reports Highlight Options toProtect and Restore Nature and Its Vital Contributions to People”. Media Release. https://www.ipbes.net/news/media-release-biodiversity-nature%E2%80%99s-contributions-continue-%C2%A0dangerous-decline-scientists-warn

10 United Nations. 2019. “UN Report: Nature’s
Dangerous Decline ‘Unprecedented’; Species Extinction Rates ‘Accelerating’”. Sustainable Development Goals. 06 May 2019.
https://www.un.org/sustainabledevelopment/
blog/2019/05/nature-decline-unprecedented-report/

16 Bos, G. 2017. “Tomorrow’s Production
Systems Will Be Closer to Nature”. IUCN
(International Union for Conservation) Blogpost, 09 January 2017. https://www.iucn.
org/news/business-and-biodiversity/201701/
tomorrows-production-systems-will-be-closer-nature. Other estimates have put the monetary value of goods and services provided
by ecosystems at as high as US$125 trillion
per year, or around two-thirds higher thanglobal GDP. See Costanza, R. R. de Groot,
P. Sutton, S. van der Ploeg, S. J. Anderson, I.
Kubiszewski, S. Farber and R. K. Turner. 2014
“Changes in the Global Value of Ecosystem
Services”. Global Environmental Change 26(2014): 152–58. https://community-wealth.
org/sites/clone.community-wealth.org/files/
downloads/article-costanza-et-al.pdf; OECD
(Organisation for Economic Co-operation andDevelopment). 2019. Biodiversity: Finance andthe Economic and Business Case for Action.
Report prepared by the OECD for the French
G7 Presidency and the G7 Environment Ministers’ Meeting, 5–6 May 2019. https://www.
oecd.org/environment/resources/biodiversity/
G7-report-Biodiversity-Finance-and-the-Economic-and-Business-Case-for-Action.pdf

11 Seto, K. C., B. Günerlap, and L. R. Hutyra.
2012. “Global Forecasts of Urban Expansion to 2030 and Direct Impacts on Biodiversity and Carbon Pools”. PNAS 109 (40):16083–88. https://www.pnas.org/content/109/40/16083.short

17 “FAO (Food and Agriculture Organization of
the United Nations).” The Biodiversity That
Is Crucial for our Food and Agriculture Is
Disappearing by the Day. Press Release, 22February 2019. http://www.fao.org/news/story/en/item/1180463/icode/

18 FAO (Food and Agriculture Organization of
the United Nations). 2019. The State of theWorld’s Biodiversity for Food and Agriculture,
J. Bélanger & D. Pilling (eds.). FAO Commission on Genetic Resources for Food andAgriculture Assessments. Rome. http://www.
fao.org/3/CA3129EN/ca3129en.pdf

28 Newer, R. 2019. “The Thick Gray Line:
Forest Elephants Defend Against Climate
Change”. The New York Times. 19 August
2019. https://www.nytimes.com/2019/08/19/
science/elephants-climate-change.html?action=click&module=Discovery&pgtype=Homepage

19 IPBES. 2019. Op. cit.; Roe, D., N. Seddon
and J. Elliott. 2019. “Biodiversity Loss Isa Development Issue: A Rapid Review ofEvidence”. Issue Paper. London: International
Institute for Environment and Development.

29 Morello, L. 2010. “Phytoplankton Population
Drops 40 Percent Since 1950”. Scientific
American. 29 July 2010. https://www.scientificamerican.com/article/phytoplankton-population/; Watts, S. 2017. “Global Warming
Is Putting the Ocean’s Phytoplankton in
Danger”. Pacific Standard. 29 December
2017. https://psmag.com/environment/global-warming-is-putting-phytoplankton-in-danger; University of Leicester. 2015. “Failing
Phytoplankton, Failing Oxygen: Global
Warming Disaster Could Suffocate Life on
Planet Earth”. ScienceDaily. ScienceDaily, 01
December 2015. https://www.sciencedaily.
com/releases/2015/12/151201094120.htm

20 Roe, D. 2019. “Biodiversity Loss—More Thanan Environmental Emergency”. The Lancet
Planetary Health 3 (7): PE287–E289, 01 July
2019. https://www.thelancet.com/journals/
lanplh/article/PIIS2542-5196(19)30113-5/fulltext; Roe, Seddon and Elliott. 2019. Op. cit.
21 IPCC (United Nations’ Intergovernmental
Panel on Climate Change). 2019. Climate
Change and Land. Special Report. https://www.ipcc.ch/srccl/
22 WHO (World Health Organization). 2015.
“Loss of Biodiversity Impacts Human Health”.
https://www.who.int/globalchange/publications/phe-pr.pdf?ua=1
23 IUCN. 2009. “New International Standard
for Sustainable Wild Collection of Medicinal
and Aromatic Plants”. IUCN Support. 26 May
2009. https://www.iucn.org/content/new-international-standard-sustainable-wild-collection-medicinal-and-aromatic-plants
24 Thomford, N. E., D. A. Senthebane, A. Rowe,
D. Munro, P. Seele, A. Maroyi and K. Dzobo.
2018. “Natural Products for Drug Discovery in
the 21st Century: Innovations for Novel Drug
Discovery”. International Journal of Molecular
Sciences 19 (6): 158. https://www.ncbi.nlm.
nih.gov/pmc/articles/PMC6032166/
25 Roe. 2019. Op. cit.; Roe, Seddon and Elliott.
2019. Op. cit.
26 Technical University of Denmark. 2018.
“Scientists to Produce Anti-Cancer Drugs
in Yeast”. Science Daily. 07 December
2018. https://www.sciencedaily.com/releases/2018/12/181207121419.htm
27 Learn, J. R. 2019. “Complete Axolotl Genome Could Reveal the Secret of Regenerating Tissues”. Smithsonian.com. 24
January 2019. https://www.smithsonianmag.
com/science-nature/complete-axolotl-genome-could-reveal-secret-regenerating-tissues-180971335/

30 IPBES. 2019. Op. cit.; Isbell, F., D. Craven, J.
Connolly, M. Loreau, B. Schmid, C. Beierkuhnlein, T. M. Bezemer, C. Bonin, H. Bruelheide,
E. de Luca, A. Ebeling, J. N. Griffin, Q. Guo,
Y. Hautier, A. Hector, A. Jentsch, J. Kreyling,
V. Lanta, P. Manning, S. T. Meyer, A. S. Mori,
S. Naeem, P. A. Niklaus, H. W. Polley, P. B.
Reich, C. Roscher, E. W. Seabloom, M. D.
Smith, M. P. Thakur, D. Tilman, B. F. Tracy, W.
H. van der Putten, J. van Ruijven, A. Weigelt,
W. W. Weisser, B. Wilsey and N. Eisenhaurer.
2015. “Biodiversity Increases the Resistance of Ecosystem Productivity to Climate
Extremes”. Nature 526: 547–77.
31 OECD. 2019. Op. cit.
32 Addison, P. F. E., J. W. Bull, and El J.
Milner-Gulland. 2018. “Using Conservation
Science to Advance Corporate Biodiversity
Accountability”. Conservation Biology. 15 July
2018. https://conbio.onlinelibrary.wiley.com/
doi/10.1111/cobi.13190
33 Roe. 2019. Op. cit.; Roe, Seddon and Elliott.
2019. Op. cit.
34 Raygorodetsky, G. 2018. “Indigenous Peoples Defend Earth’s Biodiversity—But They’rein Danger”. National Geographic. 16 November 2018. https://www.nationalgeographic.
com/environment/2018/11/can-indigenous-land-stewardship-protect-biodiversity-/
35 Kanase, H. R. and K. N. M. Singh.
2018. “Marine Pharmacology: Potential, Challenges, and Future in India”.
Journal of Medical Sciences 38 (2):49–53. http://www.jmedscindmc.com/
article.asp?issn=1011-4564;year=2018;volume=38;issue=2;spage=49;epage=53;aulast=Kanase#ft1

The Global Risks Report 202055

36 Ibid; Newman, T. 2019. “Why Scientists Are
Searching the Ocean for New Drugs”. Medical News Today. 08 June 2019. https://www.
medicalnewstoday.com/articles/325384.php.

46 IUCN (International Union for Conservation).
“Coral Reefs and Climate Change”. IUCN
Issues Brief. https://www.iucn.org/resources/
issues-briefs/coral-reefs-and-climate-change

37 Ibid.

47 Deloitte Access Economics. 2017. At What
Price? The Economic, Social and Icon Valueof the Great Barrier Reef. Brisbane, Australia:
Deloitte Access Economics. https://www2.
deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economicsgreat-barrier-reef-230617.pdf

38 Jarvis, B. 2018. “The Insect Apocalypse
Is Here”. The New York Times Magazine.
27 November 2018. https://www.nytimes.
com/2018/11/27/magazine/insect-apocalypse.html (citing David L. Wagner, an entomologist at the University of Connecticut).
39 Sánchez-Bayo, F. and K. A. G. Wyckhuys.
2019. “Worldwide Decline of the Entomofauna: A Review of Its Drivers”. BiologicalConservation. 232 (April 2019): 8–27. https://www.sciencedirect.com/science/article/pii/
S0006320718313636
40 Carrington, D. 2019. “Plummeting Insect
Numbers ‘Threaten Collapse of Nature’”. The
Guardian. 10 February 2019. https://www.
theguardian.com/environment/2019/feb/10/
plummeting-insect-numbers-threaten-collapse-of-nature
41 Bartomeus, I., S. G. Potts., I. Steffan-Dewenter, B. E. Vaissière, M. Woyciechowski, K.
M. Krewenka, T. Tscheulin, S. P. M. Roberts,
H. Szentgyörgyi, C. Westphal and R. Bommarco. 2014. “Contribution of Insect Pollinators to Crop Yield and Quality Varies with
Agricultural Intensification”. PeerJ. Published
online 27 March 2014. doi: 10.7717/peerj.328.
https://www.ncbi.nlm.nih.gov/pmc/articles/
PMC3976118/
42 Ibid.
43 Benton, T. G. and R. Bailey. 2019. “TheParadox of Productivity: Agricultural Productivity Promotes Food System Inefficiency”.
Global Sustainability. Published online by
Cambridge University Press. 29 April 2019.
https://www.cambridge.org/core/services/aop-cambridge-core/content/view/4D5924AF2AD829EC1719F52B73529CE4/
S2059479819000036a.pdf/paradox_of_productivity_agricultural_productivity_promotes_
food_system_inefficiency.pdf
44 Yong, E. 2019. “Is the Insect Apocalypse
Really Upon Us?” The Atlantic. 19 February
2019. https://www.theatlantic.com/science/archive/2019/02/insect-apocalypse-really-upon-us/583018/
45 Loria, K. 2018. “What Happens If All the
Coral Reefs Die?” World Economic Forum
Global Agenda, published in collaboration
with Business Insider. 20 April 2018. https://www.weforum.org/agenda/2018/04/whathappens-if-all-the-coral-reefs-die

56

Save the Axolotl

48 Berger, M. O. 2018. “Coral Reef Loss Could
Cost Countries Billions”. Pacific Standard. 22
June 2018. https://psmag.com/environment/
the-financial-cost-of-losing-a-reef
49 Leggat, W. P., E. F. Camp, D. J. Suggett, S. F.
Heron, A. J. Fordyce, S. Gardner, L. Deakin,
M. Turner, L. J. Beeching, U. Kuzhiumparambil, C. M. Eakin and T. D. Ainsworth.
2019. “Rapid Coral Decay Is Associated with
Marine Heatwave Mortality Events on Reefs”.
Current Biology 29 (16): 2723–2730.e4.
https://doi.org/10.1016/j.cub.2019.06.077
50 IPCC (Intergovernmental Panel on Climate
Change). 2018. Summary for Policymakers
of IPCC Special Report on Global Warmingof 1.5°C Approved by Governments. IPCC
Newsroom Post. 08 October 2018. https://www.ipcc.ch/2018/10/08/summary-for-policymakers-of-ipcc-special-report-on-globalwarming-of-1-5c-approved-by-governments/
51 Loria. 2018. Op. cit.
52 Loria. 2018. Op. cit.
53 Sow, M. 2017. “Figures of the Week: Piracy and Illegal Fishing in Somalia”. Africa in
Focus. Brookings. 12 April 2018. https://www.brookings.edu/blog/africa-in-focus/2017/04/12/figures-of-the-week-piracyand-illegal-fishing-in-somalia/; Farquhar, S.
2017. “When Overfishing Leads to Terrorism: The Case of Somalia”. World Affairs
Journal of International Issues. 21: 68–77.
https://www.researchgate.net/publication/319680762_When_Overfishing_Leads_
To_Terrorism_The_Case_of_Somalia
54 McGrath, M. 2019. “Deforestation: Tropical
Tree Losses Persist at High Levels”. BBC
News. 25 April 2019. https://www.bbc.com/
news/science-environment-48037913
55 The Economist. 2019. “The Amazon Is Approaching an Irreversible Tipping Point”. The
Economist. 01 August 2019. https://www.
economist.com/briefing/2019/08/01/the-amazon-is-approaching-an-irreversible-tipping-point56 McSweeney, R. 2015. “Amazon Rainforest
Is Taking Up a Third Less Carbon Than a
Decade Ago”. Plants and Forests. 18 March2015. https://www.carbonbrief.org/amazonrainforest-is-taking-up-a-third-less-carbonthan-a-decade-ago
57 Smith, E. 2019. “Human Activities Are Drying
Out the Amazon: NASA Study”. NASA,
Global Climate Change. https://climate.nasa.
gov/news/2928/human-activities-are-drying-out-the-amazon-nasa-study/
58 The Economist. 2019. Op. cit.; Irfan, U.
2019. “The Amazon Rainforest’s WorstCase Scenario Is Uncomfortably Near”.
Vox. 27 August 2019. https://www.vox.
com/2019/8/27/20833275/amazon-rainforest-fire-wildfire-dieback
59 World Wildlife Fund. 2019. Borneo Deforestation. https://wwf.panda.org/our_work/forests/
deforestation_fronts2/deforestation_in_borneo_and_sumatra/
60 World Wildlife Fund. 2019. Amazon Facts.
https://www.worldwildlife.org/places/amazon
61 Lapola, D. M., P. Pinho, C. A. Quesada, B.
B. N. Strassburg, A. Rammig, B. Kruijt, F.
Brown, J. P. H. B. Ometto, A. Premebida, J.
A. Marengo, W. Vergara and C. A. Nobre.
2018. “Limiting the High Impacts of Amazon
Forest Dieback with No-Regrets Scienceand Policy Action”. PNAS 115 (46): 11671–79.
https://www.pnas.org/content/115/46/11671
62 Bailey, R. and L. Wellesley. 2017. Chokepoints
and Vulnerabilities in Global Food Trade. London: Chatham House. https://www.chathamhouse.org/sites/default/files/publications/research/2017-06-27-chokepoints-vulnerabilities-global-food-trade-bailey-wellesley.pdf
63 CBD (Convention on Biological Diversity).
1993. Convention, Strategic Plan 2011–2020,
Aichi Biodiversity Targets. https://www.cbd.
int/sp/targets/
64 Pearce, F. 2018. “Sparing vs Sharing: The
Great Debate Over How to Protect Nature”.
E360 (YaleEnvironment360). https://e360.
yale.edu/features/sparing-vs-sharing-thegreat-debate-over-how-to-protect-nature
65 Searchinger, T. D., W. Wirsenius, T. Beringer
and P. Dumas. 2018. “Assessing the Efficiency of Changes in Land Use for Mitigating Climate Change”. Nature 563: 249–53. https://www.nature.com/articles/s41586-018-0757-z

68 PLOS. 2019. “Urban Trees ‘Live Fast, Die
Young’ Compared to Those in Rural Forests: Unusual Features of Street-Tree Life
Cycles Should Inform Urban Greening
Campaigns”. ScienceDaily. 08 May 2019.
https://www.sciencedaily.com/releases/2019/05/190508142450.htm
69 Roe. 2019. Op. cit. Recent exposure ofalleged human rights abuses by conservationists could exacerbate perceptionsof such a trade-off. See BuzzFeed News:
Warren, T. and K. J. M. Baker. 2019. “WWFFunds Guards Who Have Tortured and Killed
People”. BuzzFeed News. 04 March 2019.
https://www.buzzfeednews.com/article/tomwarren/wwf-world-wide-fund-nature-parkstorture-death; Warren, T. and K. J. M. Baker.
2019. “A Leaked Report Shows WWF Was
Warned Years Ago Of ‘Frightening’ Abuses”.
BuzzFeed News. 05 March 2019. https://www.buzzfeednews.com/article/katiejmbaker/wwf-report-human-rights-abuses-rangers;
Warren, T. and K. J. M. Baker. 2019. “WWFSays Indigenous People Want This Park.
An Internal Report Says Some Fear Forest Ranger ‘Repression.’”. 08 March 2019.
https://www.buzzfeednews.com/article/katiejmbaker/wwf-eu-messok-dja-fears-repression-ecoguards
70 Roe, Seddon and Elliott. 2019. Op cit.
71 FAO (Food and Agriculture Organizationof the United Nations). 2018. Shaping the
Future of Livestock Sustainably, Responsibly,
Efficiently. The 10th Global Forum for Foodand Agriculture (GFFA) Berlin, 18–20 January 2018. http://www.fao.org/3/i8384en/
I8384EN.pdf
72 Watts, G. 2019. “The Cows that Could HelpFight Climate Change”. BBC Future. 06
August 2019. https://www.bbc.com/future/article/20190806-how-vaccines-could-fixour-problem-with-cow-emissions
73 GBD 2017 Diet Collaborators. 2019. “Health
Effects of Dietary Risks in 195 Countries,
1990–2017: A Systematic Analysis for the
Global Burden of Disease Study 2017”. The
Lancet 393 (10184): 1958–72. 22 May 2019.
https://www.thelancet.com/article/S01406736(19)30041-8/fulltext
74 Avery, H. 2019. “Conservation Finance: Can
Banks Embrace Natural Capital? (Part 1)”. Biofin, The UNDP Biodiversity Finance Initiative.
http://www.biodiversityfinance.net/news-andmedia/conservation-finance-can-banks-embrace-natural-capital-part-1

66 IPCC. 2018. Op. cit.
67 Benton and Bailey. 2019. Op. cit.

The Global Risks Report 202057

75 IPBES (Intergovernmental Science-Policy
Platform on Biodiversity and Ecosystem
Services). 2018. The Assessment Report on
Land Degradation and Restoration: Summary for Policymakers. Bonn, Germany:
IPBES Secretariat. https://www.ipbes.net/
system/tdf/spm_3bi_ldr_digital.pdf?file=1&type=node&id=28335
76 Jones, D. and K. Pfliegner. 2019. “Can We
Use Nature to Mitigate Wildfire Risk?” Brink.
23 September 2019. https://www.brinknews.
com/can-we-use-nature-to-mitigate-wildfirerisk/
77 OECD. 2019. Op. cit.
78 Schwab, N. and K. Rechberger. 2019. “We
Need to Protect 30% of the Planet by 2030.
This Is How We Can Do It”. World Economic
Forum Global Agenda. 22 April 219. https://www.weforum.org/agenda/2019/04/why-protect-30-planet-2030-global-deal-nature-conservation/
79 Avery. 2019. Op. cit.
80 Avery, H. 2019. “Conservation Finance:
Can Banks Embrace Natural Capital?”
Euromoney. 08 October 2019. https://www.
euromoney.com/article/b1hh1rccjthqmd/conservation-finance-can-banks-embrace-natural-capital

58

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81 Schwab, K. 2019. “Ending Short-Termism by
Keeping Score”. Project Syndicate. 17 October 2019. https://www.project-syndicate.
org/commentary/scorecard-to-end-short-termism-by-klaus-schwab-2019-10
82 Gaborone Declaration for Sustainability in Africa. 2012. Ecosystem Valuation and Natural
Capital Accounting. http://www.gaboronedeclaration.com/nca
83 Souchet, F. 2019. “Fashion Has a Huge
Waste Problem. Here’s How It Can Change”.
World Economic Forum Global Agenda. 28
February 2019. https://www.weforum.org/
agenda/2019/02/how-the-circular-economy-is-redesigning-fashions-future/
84 United Nations. 2019. “UN Report: Nature’s Dangerous Decline ‘Unprecedented’;Species Extinction Rates ‘Accelerating’”.
Sustainable Development Goals Blog entry.
06 May 2019. https://www.un.org/sustainabledevelopment/blog/2019/05/nature-decline-unprecedented-report/; Sonter, L. J., S.
H. Ali and J. E. M. Watson. 2019. “Mining andBiodiversity: Key Issues and Research Needs
in Conservation Science”. Proc Biol Sci. 285(1892): 20181926. https://www.ncbi.nlm.nih.
gov/pmc/articles/PMC6283941/
85 OECD. 2019. Op. cit.

REUTERS/YANNIS BEHRAKISWild
Wide Web

Consequences of Digital Fragmentation
REUTERS/TOMAS BRAVO

Heightened geopolitical tensions discussed
in previous chapters also risk negatively
influencing the huge economic potential of thenext generation of technologies. The current
lack of global technology governance and thepresence of cybersecurity blind spots increase

the risk of a fragmented cyberspace andcompeting technology regulations. This chapter
contemplates how a fragmented cyberspaceand differing technological standards
could hinder economic growth, exacerbate
geopolitical rivalries and further divide societies.
61

The 4IR: The new economy
More than 50% of the world’s population
is now online;1 roughly one million more
people join the internet each day.2
Two-thirds of humanity own a mobile
device.3 Fourth Industrial Revolution(4IR) technologies are already bringing
tremendous economic and societal benefits
to much of the global population.
The next wave of 4IR technologies will
dramatically reshape economies andsocieties. Precision medicine, autonomousvehicles and drones are all fast-growing
markets (see Figure 5.1), while artificial
intelligence (AI) alone is expected to boost
global growth by 14% by 2030.4
Smart technologies have enormous potential
to improve both human life and the healthof the planet. For example, satellite-based
applications can aid rural farmers to irrigate
their crops efficiently.5 Prostheses can be
3D printed.6 Autonomous vehicles canbe employed by the elderly to support
better mobility.7 The Internet of Things (IoT)
can even help to lower CO2 emissions by
optimizing energy consumption and reducing
traffic congestion.8
However, many unintended consequences
have also surfaced. Cyberattacks havebecome a common hazard for individuals

and businesses: our surveys rank themas the seventh most likely and eighth
most impactful risk, and the second mostconcerning risk for doing business globallyover the next 10 years (see Figure II, The
Global Risks Landscape). Fifth generation(5G) networks, quantum computing and
AI are creating not only opportunities but
also new threats of their own. The lackof a global governance framework fortechnology risks fragmenting cyberspace,which could deter economic growth,
aggravate geopolitical rivalries and widen
divisions within societies.

The dangers of digital
innovation
Cyberattacks. The digital nature of 4IR
technologies makes them intrinsicallyvulnerable to cyberattacks that can takea multitude of forms—from data theft
and ransomware to the overtaking ofsystems with potentially large-scale harmful
consequences. Operational technologies
are at increased risk because cyberattacks
could cause more traditional, kinetic impacts
as technology is being extended into thephysical world, creating a cyber-physicalsystem. However, using “security-by-design”
principles to integrate cybersecurity features
into new products is still secondary to getting
products quickly out into the market.

FIGURE 5.1

2025 Market Projections for 4IR Technologies
Cloud computing US$623 billion

Autonomous cars US$416 billion

Precision medicine US$82 billion
Drones US$52 billion

Sources: Cloud computing: https://www.researchcosmos.com/reports/cloud-computing-market/92916729; Precision medicine: https://www.globenewswire.
com/news-release/2019/08/22/1905339/0/en/Global-Precision-Medicine-Market-Expected-To-Reach-over-USD-86-25-Billion-By-2025-Zion-Market-Research.
html; Drones: https://www.researchandmarkets.com/research/vx2jd5/global_unmanned?w=5; Autonomous cars: https://www.marketwatch.com/pressrelease/autonomous-car-market-value-at-expected-to-reach-usd-41639-billion-by-2025-cagr-412-2019-07-26?mod=mw_quote_news

62

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Cyberattacks on critical infrastructure—
rated the fifth top risk in 2020 by ourexpert network—have become the newnormal across sectors such as energy,9healthcare,10 and transportation.11 Suchattacks have even affected entire cities.12
Public and private sectors alike are at
risk of being held hostage. Organizedcybercrime entities are joining forces,13
and their likelihood of detection andprosecution is estimated to be as low as
0.05% in the United States.14 Cybercrimeas-a-service is also a growing businessmodel, as the increasing sophisticationof tools on the Darknet makes malicious
services more affordable and easily
accessible for anyone.
The IoT is also amplifying the potential
cyberattack surface. It is estimated that
there are already over 21 billion IoT devices
worldwide,15 and their number will double
by 2025.16 Attacks on IoT devices increasedby more than 300% in the first half of2019,17 while in September 2019, IoTs wereused to take down Wikipedia throughclassic distributed denial of service (DDoS)
attacks,18 and the risk of IoT devices being
used as intermediaries is expected toincrease.19 In 2021, cybercrime damages
might reach US$6 trillion20— what would beequivalent to the GDP of the world’s thirdlargest economy.21
Vulnerable data. 4IR technologies
run on data, making privacy a major
challenge. IoT devices collect and sharedata that are potentially highly sensitivefor individuals, companies and states,from personal identification and medical
records to national security information.
The data brokering market—aggregating,disaggregating, copying, searching andselling data for commercial purposes—is
worth an estimated US$200 billion a year.22
Data theft can enable the manipulation ofindividual and collective behaviour, leading
to physical and psychological harm.
Artificial intelligence (AI). AI has been
dubbed both “the most impactful invention”
and our “biggest existential threat”.23
Indeed, we may not even be able tocomprehend AI’s full potential—or its fullrisk. Some risks—such as manipulation
through fake news and “deepfakes”—arewell known.24 Others are yet to be fully

uncovered, including in such areas as braincomputer interfaces and hyper-automation(combining robotics and AI). 25
Fifth generation (5G). 4IR technologies
rely on high-speed digital infrastructure—on
5G networks and, further down the road,
6G.26 While 5G technology can be built inpart on existing 4G infrastructure, significant
shortfalls in capacity are expected as
early as 2020 in some countries.27 Current
projections show the risk of a US$1
trillion global gap in telecommunication
infrastructure investments through 2040.28
In developed countries, the challenge is
not only to build modern infrastructure
but also to overcome reliance on legacy
systems, on which the public and private
sectors currently spend up to 80% of theirtechnology budgets. Here, introducing
new, safe and reliable systems into existing
capabilities is key; some entities havealready begun to do this.29

One million
additional people joining theinternet daily
Quantum computing. Quantum computing
could dramatically reduce the time needed
to solve the mathematical problems on
which encryption techniques currently rely—
from months to minutes and seconds.30 It
risks rendering useless most of our existingdata security and critical infrastructure
systems, including military networks, email
and power grids.31
Cloud computing. While many technicaladvancements of 4IR are essentially
digitally based, cloud computing has
the potential to enhance trans-sectoraldevelopment, expand technological accessto remote areas and further link AI toother 4IR technologies. At the same time,with increasingly more data hosted in thecloud, companies are amassing personal
information like never before, which could
ultimately create potential new data privacy
and security risks.32
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63

The proliferation of standards makes it
more difficult to converge on a single one
The importance of global techand cyber governanceAttempts to address the security challengesof 4IR technologies are maturing, butthey are often still fragmented and limitedin scope and participants. Numerous
initiatives bring together businesses andgovernments to build trust, promote security
in cyberspace, assess the impact ofcyberattacks and assist victims.33 Multilateralefforts, such as the Council of Europe’s
Budapest Convention, also aim to define
responsible behaviour in cyberspace andharmonize the patchwork of existing laws andregulations.34 Collaborative incident response
and information-sharing efforts attempt tocentralize cybersecurity capabilities to reducethe impact of cyberattacks.35
International efforts to develop AI standards
are also ongoing (for example, in the fieldof AI and ethics alone, there are over 80
frameworks),36 yet the large increase insuch initiatives serves to fragment the
response to the threat, often imposing
burdensome and sometimes conflicting
obligations on organizations operating
across national boundaries. The proliferationof standards also makes it more difficult
for countries and companies to converge
on a single one as more AI-enabled systems
are adopted.
Even more critical, international andnational policies are not keeping up withtechnological advances. The need isurgent for a more comprehensive, inclusive
and agile global governance architecture
to address the dynamic and intertwined
security issues raised by the 4IR. The “ageof digital interdependence” will benefit
all societies only if the wide-ranging
geopolitical, economic and societal risks
it could bring are managed in a coordinatedand inclusive way.37 The current disruptionof the multilateral system (see Chapter
1, Global Risks 2020) renders thedevelopment of such a framework
more challenging.
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Geopolitical risks
Digital innovation is both influencing andbeing influenced by geopolitical tension,
which amplifies the possibility for risk andminimizes the chances for cooperation. At
the same time, the private sector exercises
significant power to impact outcomes in thisrealm. Indeed, global tech companies haveleveraged open digital borders to integrate
global supply chains and connect people
worldwide—but these companies are also
challenging some core competencies ofnation states, such as standard-setting
and monetary policies. Technologicalpredominance and future national
competitiveness go hand in hand.
The lack of a global tech governanceframework increases business influence on
standard-setting, the foreign participationin national critical infrastructure, foreignacquisition of domestic technology, theoffshoring of data, and technology transfer
as a price to access foreign markets,38
influencing societal risks as well (see below).
Additional risks for states include:
Parallel cyberspace. Connectivity
depends on internationally establishedprotocols. Historically, multilateralstakeholders have tended to favour a fairly
open and loosely regulated cyberspace.
However, current international developments
point to an increased risk of divergence inprotocols—old and new—that could leadto fragmentation of cyberspace and futuretechnologies.39 Additionally, if countries
continue to seek “cyber-sovereignty”—
national or regional versions of theinternet40—global interconnectivity
could be further disrupted.
First-mover advantage. Patents in 4IR
technologies are being filed at an increasingrate.41 Governments as well as businesses
want to be at the forefront of cutting-edge
technologies because they stand to benefit
from being the first to make breakthroughs.
First-mover advantage can shift geopoliticalbalance by influencing standards, systems
and production chains.

REUTERS/FRANCOIS LENOIR

A new digital arms race. Digitaldependency is changing the nature ofinternational and national security, raising
three urgent issues: how to protect criticalinfrastructure, uphold societal values andprevent the escalation of state-on-state
conflicts. Digital technologies increasingly
feature in asymmetric warfare, enablingattacks by smaller countries and non-state
actors on larger states. Viruses developed
as cyberweapons have been re-purposedby adversaries after being released into
cyberspace. Cyberspace has become an
extension of the military domain, triggering
new technological arms races.42
In 2019, several countries agreed to pursue
the establishment of guiding principles
for the use of lethal autonomous weaponssystems.43 However, key military powers
are resisting international legal regulationin this area, increasing the risk of serious
future mishaps.
Interruption of international
interconnectivity. Increased intelligencesharing between government cybersecurity
agencies and infrastructure operators has
strengthened the appreciation of challenges
related to cyberattacks and improved

preparedness efforts. It has also raised thequestion of whether the participants in criticalinformation infrastructure are trustworthy.
The fragmentation of cyberspace willrender those efforts moot and create
possibly insurmountable technologicalincompatibilities for law enforcement tocooperate across varying systems.

Economic risks
It is no surprise that technology hardware
supply chains have driven recent researchand development (R&D) and trade debates
between major global economies.44
Many countries are heavily scrutinizing
investment in—or acquisition of—technology
companies by foreign investors. Countries
are increasingly looking at foreign
investment in universities to assess risks ofintellectual property—in the form of researchand its potential commercial applications—
vanishing abroad. Technology transfers in
exchange for market access have become
a contested part of trade negotiations.
These issues highlight the trade-offs
countries are making between near-term
economic gain at a time of slow growthand longer-term security in an increasingly
challenging geopolitical context. Europe’s
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65

desire for its own cloud—in part to retain
valuable data now being extracted by foreign
players—risks it falling behind in this global
race. Other economic risks include:

80

Fragmentation costs. In today’s
hyperconnected global economy, it isestimated that a total shutdown of the internet
would result in a daily GDP loss of 1.9% in
a high-connectivity country and 0.4% in a
low-connectivity country.45 Fragmentation of
cyberspace and technologies could aggravatethese economic consequences by having
negative effects on businesses’ use of cloudservices,46 increased transactional costs ofdoing business across parallel jurisdictions
and lower productivity by requiring different
production lines for different markets.
These economic consequences undermine
businesses’ ability to realize thepotential of 4IR technologies.
Loss of sustainability. As theworld is on the brink of climate
collapse (see Chapter 3, A DecadeLeft), the necessary duplicationof efforts for overcoming suchtechnical fragmentation would
not only be economicallycounterproductive, but also
environmentally inefficient. Thisinefficiency is further amplified
by countries’ pursuit of isolated
national technology regulations.
Adaptation to different products
for different markets would
inevitably increase the negativeenvironmental footprint of any industry. At
the same time, today’s ecological footprintof mass data generated for and by AI—
for example, the energy required to run
servers—is already considerable.47

number ofinternationalframeworksof ethics
and AI

Monetary and fiscal risks. The lack of
coordinated efforts by nations on how tocapture wealth created by open trade andthrough digital means is a major challenge,
creating disparities with local companies
and between countries. Moreover, newdigital currencies operating outside a clear
regulatory framework could undermine
sovereign currencies and international
cooperation against money laundering.
Collapse in confidence in digital currencies
could also threaten financial stability.48 At thesame time, innovation in this space could
provide social benefit but this requires, as
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then-IMF Chair Christine Lagarde warned,“being alert to risks in terms of financial
stability, privacy or criminal activities, andensuring appropriate regulation is in place tosteer technology toward the public good.”49

Societal risks
The differential speed of 4IR developments
around the world risks widening divides
between nations. Highly digitized economies
have the capacities and capital to invest in
future technologies, leaving behind others—
especially in Africa, ASEAN and Latin
America—that currently trail in areas suchas patents, IoT development and market
capitalization.50 Societal risks include:
Digital divide and wealth gaps. A widening
digital divide between countries risks avicious cycle, as increasing wealth gaps anda brain drain make it harder for those left
behind to catch up, and easier for regions
to miss critical investment opportunities thatwould allow access to new 4IR technology
markets. Hence, countries could lose out
on the compounding effect of investments
and subsequently lack the R&D capabilities
needed to thrive, contributing to yet further
brain drain. Within countries, wealth gaps
could also increase: automation is forecasted
to hit low-skilled workers and women thehardest.51 Societal divides could also widen
between rural and urban areas in developing
economies,52 and between smart and nonsmart cities in developed countries.53 The
wide-scale affordability of new technologies
will be one important factor for minimizing
the digital divide.54
A human dystopia. Given the growing
societal awareness of problems such as
biased algorithms and cyberbullying,55 there
are many calls for deeper engagement onquestions of ethics in the development anduse of 4IR technologies.56 Due diligence must
be applied to avoid negative consequences
for under-represented communities. The lackof a global technological framework could
lead to a dystopia involving, for example,
cyberbullying without consequences,
workplace surveillance and the erosion of
employee privacy.57
While the open cyberspace has allowed
the democratization of certain processes
and increased access to information anddata, growing opportunities for promoting

REUTERS/BENOIT TESSIER

falsehoods (accidentally and deliberately) haveresulted in a gradual erosion of trust in media,
social networks and even governments.
Data are increasingly being collected on
citizens by government and business alike,and these data are then monetized and used
to refine the development and deploymentof new technologies back towards thesecitizens, as consumers. Amassing of data bya handful of small entities leads to a further
entrenchment of gaps between advanced
and emerging economies.

Global governance challenges
for businesses
Businesses, just as economies, rely on
concerted global technology governance.
Fragmentation and incompatibility between
global cybersecurity and technology
frameworks risk weakening businesses’
capabilities to adapt to the emerging
challenges discussed in this chapter in atimely way, as raising transactional costs
increases the financial burden on businesses.
More and more firms operate in complex,
global and digital service ecosystems that
not only expose them to their own cyberand technological weaknesses, but also
to those of other participants—including
customers, suppliers and managed
system providers. At the same time,businesses are facing the challenge of
implementing existing cybersecurity and4IR standards (where they exist), while
ensuring compliance with fragmented
regulations on accountability, transparency,
bias and privacy for developing—or simply
applying—4IR technologies. Because
government and corporate leaders equallyshare the responsibility for promoting global
cybersecurity and digital trust, cooperation
between the public and private sectors
is more vital than ever in areas such as
information-sharing, collaboration withlaw enforcement agencies, and skill andcapacity development.
The new digital geopolitical race (seeChapter 1, Global Risks 2020) also risks
affecting businesses’ development of 4IR
technologies and their market readinessto harness the benefits of the 4IR
transformation. An open and interconnectedcyberspace, along with global technologicalcompatibility, are essential for businesses
to be able to counter the dislocating
impacts of social media, the economic
impacts of global technology giants andpotential security issues resulting fromthe digital technology race between theworld’s leading economies. By advocating
for fair and concerted global actions on
any 4IR-related governance frameworks,
businesses can mitigate risks, ensure trust
towards consumers and governments, andincreasingly benefit from the 4IR.
The Global Risks Report 202067

Notes1

ITU (International Telecommunication Union).
2019. Measuring Digital Development: Facts
and Figures 2019. Geneva: ITU. https://www.
itu.int/en/ITU-D/Statistics/Documents/facts/
FactsFigures2019.pdf

2Kemp, S. 2019. “Digital 2019: Global Digital
Overview”. Datareportal. https://datareportal.
com/reports/digital-2019-global-digital-overview

3

Turner, A. 2019. “How Many Phones Are in
the World?” Bankmycell. https://www.bankmycell.com/blog/how-many-phones-are-inthe-world

4

PwC. 2019. “Sizing the Prize. What’s the Real
Value of AI for Your Business and How Can
You Capitalise?” https://www.pwc.com/gx/
en/issues/analytics/assets/pwc-ai-analysissizing-the-prize-report.pdf

5

Patel, K. 2018. “Smart Phones Bring Smart
Irrigation”. NASA Earth Observatory. https://earthobservatory.nasa.gov/images/92903/
smart-phones-bring-smart-irrigation

6

Amputee Coalition. 2019. “3D Printed Prosthetics, Where Are We Today”. Amputee Coalition Blog post, 08 February 2019. https://www.amputee-coalition.org/3d-printed-prosthetics/

7

Chapman, M. M. 2019. “Self-Driving Cars
Could Be Boon for Aged, After Initial Hurdles”. The New York Times. 23 March 2017.
https://www.nytimes.com/2017/03/23/automobiles/wheels/self-driving-cars-elderly.html

8Roberts, D. 2019. “Smarter Cities Will beMore Efficient Cities”. Forbes Council post,
22 November 2019. https://www.forbes.
com/sites/forbestechcouncil/2019/11/22/
smarter-cities-will-be-more-efficient-cities/#3bd950332128

9

Siemens and Ponemon Institute. 2019.
Caught in the Crosshairs: Are Utilities
Keeping Up with the Industrial Cyber Threat?
Houston: Siemens Gas and Power. https://
assets.new.siemens.com/siemens/assets/
api/uuid:35089d45-e1c2-4b8b-b4e9-7ce8cae81eaa/version:1572434569/siemens-cybersecurity.pdf

10 Muresan, R. 2019. “Healthcare Continues
to Be Prime Target for Cyber Attacks”.
Bitdefender Business Insights Blog post.
07 January 2019. https://businessinsights.
bitdefender.com/healthcare-prime-target-forcyber-attacks

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11 Palmer, D. 2019. “Hackers Target Transportation and Shipping Companies in new Trojan
Malware Campaign”. ZDNet. 23 September
2019. https://www.zdnet.com/article/hackers-target-transportation-and-shipping-industries-in-new-trojan-malware-campaign/
12 Chokshi, N. 2019. “Hackers Are Holding
Baltimore Hostage: How They Struck andWhat’s Next”. The New York Times. 22 May
2019. https://www.nytimes.com/2019/05/22/
us/baltimore-ransomware.html
13 Keesem, L. 2019. “The Business of Organized Cybercrime: Rising Intergang Collaboration in 2018”. SecurityIntelligence. 20
March 2019. https://securityintelligence.com/
the-business-of-organized-cybercrime-rising-intergang-collaboration-in-2018/
14 Eoyang, M., A. Peters, I. Mehta and B.
Gaskew. 2018. To Catch a Hacker: Toward aComprehensive Strategy to Identify, Pursue, and Punish Malicious Cyber Actors.
Third Way. 29 October 2018. https://www.
thirdway.org/report/to-catch-a-hacker-toward-a-comprehensive-strategy-to-identify-pursue-and-punish-malicious-cyber-actors
15 Gartner. 2017. Leading the IoT: Gartner Insights on How to Lead in a Connected World.
https://www.gartner.com/imagesrv/books/
iot/iotEbook_digital.pdf (page 2).
16 IDC (International Data Corporation). 2019.
“The Growth in Connected IoT Devices Is Expected to Generate 79.4ZB of Data in 2025,
According to a New IDC Forecast”. IDC. 18
June 2019. https://www.idc.com/getdoc.
jsp?containerId=prUS45213219
17 Doffman, Z. 2019. “Cyberattacks on IoT
Devices Surge 300% in 2019, ‘Measured in
Billions’, Report Claims”. Forbes. 14 Sept.
2019. https://www.forbes.com/sites/zakdoffman/2019/09/14/dangerous-cyberattackson-iot-devices-up-300-in-2019-now-rampant-report-claims/#45642d105892
18 Venkat, A. 2019. “Wikipedia Investigates
DDoS Attack”. Bankinfosecurity.com, Information Security Media Group (ISMG). 09
September 2019. https://www.bankinfosecurity.com/wikipedia-investigates-ddos-attack-a-13049
19 Collard, A. 2019. “Large-Scale IoT Attack
Coming”. Gadget. 6 December 2019. https://gadget.co.za/large-scale-iot-attack-coming/

20 Walker, I. 2019. “Cybercriminals Have Your
Business in Their Crosshairs and Your Employees Are in Cahoots with Them”. Forbes.
31 January 2019. https://www.forbes.com/
sites/ivywalker/2019/01/31/cybercriminals-have-your-business-their-crosshairsand-your-employees-are-in-cahoots-withthem/#683a874a1953
21 World Bank Open Data. 2019. https://data.
worldbank.org/indicator/NY.GDP.MKTP.CD?most_recent_value_desc=true, accessed
1 December 2019.
22 WebFX. 2015. “What Are Data Brokers – And
What Is Your Data Worth?”. FX Blog post.
April 2015. https://www.webfx.com/blog/
general/what-are-data-brokers-and-what-isyour-data-worth-infographic/
23 Smith, B. 2019. “The combustion engine was
the most impactful invention regarding the
economy. Today, it could be compared with
the impact of artificial intelligence”. Microsoft
Portugal (@PTMicrosoft) citing Brad Smith(@BradSmi #WebSummit”, 05 November
2019. https://twitter.com/PTMicrosoft/
status/1191748602554650625; Clifford,
C. 2019. “Elon Musk: ‘Mark My Words –A.I. Is Far More Dangerous Than Nukes’”.
CNBC. 13 March 2019. https://www.cnbc.
com/2018/03/13/elon-musk-at-sxsw-a-i-ismore-dangerous-than-nuclear-weapons.html
24 Metz, C. “Internet Companies Prepare toFight the ‘Deepfake’ Future”. The New YorkTimes. 24 November 2019. https://www.nytimes.com/2019/11/24/technology/tech-companies-deepfakes.html
25 Saha, S., K. A. Mamun, K. Ahmed, R.
Mostafa, G. R. Naik, A. Khandoker, S.
Darvishi and M. Baumert. 2017. “Progressin Brain Computer Interfaces: Challenges
and Trends”. https://arxiv.org/ftp/arxiv/papers/1901/1901.03442.pdf
26 Li, J. 2019. “Forget about 5G, China Has
Kicked Off Its Development of 6G”. Quartz.
07 November 2019. https://qz.com/1743790/
forget-5g-china-begins-development-of-6g/
27 Grijpink, F., A. Ménard, H. Sigurdson and N.
Vucevic. 2018. “The Road to 5G: The Inevitable Growth of Infrastructure Cost”. McKinsey.
February 2018. https://www.mckinsey.com/
industries/technology-media-and-telecommunications/our-insights/the-road-to-5g-theinevitable-growth-of-infrastructure-cost
28 Global Infrastructure Hub. 2019. Investment
forecasts for Telecommunications. Global
Infrastructure Outlook. https://outlook.gihub.
org/sectors/telecommunication

29 Miller, J. 2018. “Spending on Legacy IT Continues to Grow, But There Is Light at the Endof the Tunnel”. Federal News Network. 17 August 2018. https://federalnewsnetwork.com/
ask-the-cio/2018/08/spending-on-legacy-itcontinues-to-grow-but-there-is-light-at-theend-of-the-tunnel/; Bobeldijk, Y. 2017. “Banks
Face Spiralling Costs from 50-Year-Old IT”.
Financial News. 02 October 2017. https://www.fnlondon.com/articles/banks-face-spiraling-costs-from-archaic-it-20170912
30 Gibney, E. 2019. “Hello Quantum World!
Google Publishes Landmark Quantum
Supremacy Claim”. Nature. 23 October 2019.
https://www.nature.com/articles/d41586019-03213-z
31 Herman, A. and I. Friedson. 2018. Quantum
Computing: How to Address the National
Security Risk. Washington, DC: Hudson
Institute. April 2018. https://s3.amazonaws.
com/media.hudson.org/files/publications/
Quantum18FINAL4.pdf
32 Smith, Z. 2019. “Can Big Money Crack
Big Tech? The New Trends Threatening
Today’s Digital Giants”. Observer. 05 October 2019. https://observer.com/2019/10/
amazon-google-microsoft-cloud-computing-big-tech-big-money/
33 See the IGF (Internet Governance Forum) fora discussion of The Paris Call for Trust andSecurity in Cyberspace; the Cybersecurity Tech Accord; the Charter of Trust for asecure digital world; the Global Commission
on Stability in Cyberspace, and the Global
Cyber Alliance. See also the home page of
the CyberPeace Institute, https://cyberpeaceinstitute.org/
34 Other examples include the UN’s Group ofGovernmental Experts (UN GGE) and the
new Open-Ended Working Group (OEWG) on
Developments in the Field of Information andTelecommunications in the Context of International Security. Organizations such as theInternational Telecommunication Union, theWorld Bank and Interpol have also developed
technology and security measures.
Efforts have been led by regional organizations as well, such as the Organisation for
Security and Cooperation in Europe, theCouncil of Europe, the Organization of American States, the ASEAN Regional Forum andthe Organization of American States.
See also recommendation 4 in United Nations. 2019. The Age of Digital Interdependence: Report of the UN Secretary-General’sHigh-level Panel on Digital Cooperation. June
2019. https://digitalcooperation.org/wp-content/uploads/2019/06/DigitalCooperation-report-web-FINAL-1.pdf

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35 Examples include the Forum of Incident
Response and Security Teams (FIRST), Information Sharing and Analysis Centers (ISACs),
the Cyber Threat Alliance and the Cyber
Defense Alliance.
36 Cihon, P. 2019. Technical Report: Standards
for AI Governance: International Standards to
Enable Goal Coordination in AI Research &Development. Oxford: Center for Governanceof AI Future of Humanity Institute. April 2019.
https://www.fhi.ox.ac.uk/wp-content/uploads/Standards_-FHI-Technical-Report.pdf
37 United Nations. 2019. Op. cit.
38 McDonald, J. 2019. “China Promises No
Forced Tech Transfers, Access to Finance”.
Associated Press. 29 October 2019. https://
apnews.com/5dcec36663324b34b290f3f7f378c6f3
39 Waters, R. 2019. “No End in Sight to Split Internet Say Researchers”. Financial Times. 20
February 2019. https://www.ft.com/content/
69f97e7e-34a3-11e9-bd3a-8b2a211d90d5
40 Stanek, R. 2019. “Four Steps to Help Prepare
for an Increasingly Balkanized Internet”. 07
November 2019. Forbes. https://www.forbes.
com/sites/forbestechcouncil/2019/11/07/foursteps-to-help-prepare-for-an-increasinglybalkanized-internet/#7a8589086755; Russia
Today. 2019. “Russia to Launch ‘Independent
Internet’ for BRICS Nations – Report”. Russia
Today. 28 November 2017. https://www.
rt.com/russia/411156-russia-to-launch-independent-internet/
41 KTU (Kaunas University of Technology).
2019. “Patent Filings around the World: Can
Lithuania Compete?” KTU News. 23 October
2019. https://en.ktu.edu/news/patent-filingsaround-the-world-can-lithuania-compete/;
Benassi, M., E. Grinza and F. Rentocchini.
2019. “The Rush for Patents in the Fourth
Industrial Revolution: An Exploration ofPatenting Activity at the European Patent
Office”. SPRU Working Papers Series, SWPS
2019-12 (June). Sussex: University of Sussex
Business School. https://www.sussex.ac.uk/
webteam/gateway/file.php?name=2019-12swps-benassi-et-al.pdf&site=25
42 Tao, A. L. 2019. “Black Hat Asia 2019: Get
Ready for the Cyber Arms Race”. ComputerWeekly.com. 02 April 2019. https://www.
computerweekly.com/news/252460807/
Black-Hat-Asia-2019-Get-ready-for-the-cyber-arms-race70

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43 CCW (Meeting of the High Contracting
Parties to the Convention on Prohibitions or
Restrictions on the Use of Certain Conventional Weapons Which May Be Deemed to
Be Excessively Injurious or to Have Indiscriminate Effects). CCW, Final Report of the 2019
Meeting of the High Contracting Parties to
the CCW (advance version), CCW/MSP/2019/
CRP.2/Rev.1., 15 November 2019. https://www.unog.ch/80256EDD006B8954/(httpAssets)/815F8EE33B64DADDC12584B7004CF3A4/$file/CCW+MSP+2019+CRP.2+Rev+1.
pdf
44 Markman, J. 2019. “Trade War with China
Will Hit U.S. Tech Companies Hard”. Forbes.
30 September 2019. https://www.forbes.
com/sites/jonmarkman/2019/09/30/tradewar-with-china-will-hit-u-s-tech-companieshard/#7621e04c6cca
45 Deloitte. 2016. The Economic Impact ofDisruptions to Internet Connectivity. A Reportfor Facebook. Deloitte. https://www2.deloitte.
com/content/dam/Deloitte/global/Documents/Technology-Media-Telecommunications/economic-impact-disruptions-to-internet-connectivity-deloitte.pdf
46 Accenture. 2017. Digital Fragmentation:
Adapt to Succeed in a Fragmented World.
Accenture. https://www.accenture.com/_acnmedia/pdf-60/accenture-digital-fragmentation-interactive-pov.pdf#zoom=50
47 Hao, K. 2019. “Training a Single AI Model
Can Emit as Much Carbon as Five Cars in
Their Lifetimes. Deep Learning Has a Terrible
Carbon Footprint”. MIT Technology Review.
06 June 2019. https://www.technologyreview.com/s/613630/training-a-single-ai-model-can-emit-as-much-carbon-as-five-cars-intheir-lifetimes/
48 Wagner, K. 2019. “Facebook Says Central Banks Have Nothing to Fear from
Libra”. Bloomberg. 17 September 2019.
https://www.bloomberg.com/news/articles/2019-09-17/facebook-says-centralbanks-have-nothing-to-fear-from-libra
49 IMF (International Monetary Fund). 2019.
Opening Statement by Christine Lagarde to
the Economic and Monetary Affairs Committee of the European Parliament. 04 September 2019. https://www.imf.org/en/News/
Articles/2019/09/04/sp090419-OpeningStatement-by-Christine-Lagarde-to-ECONCommittee-of-European-Parliament
50 UNCTAD (United Nations Conference on
Trade and Development). 2019. Digital Economy Report 2019. Value Creation and Capture: Implications for Developing Countries.
New York: United Nations. https://unctad.org/
en/PublicationsLibrary/der2019_en.pdf

51 Hong, S. and H. G. Shell. 2018. “The Impactof Automation on Inequality”. Economic
Synopses 29 (2018). https://files.stlouisfed.
org/files/htdocs/publications/economic-synopses/2018/11/19/the-impact-of-automation-on-inequality.pdf; Hassan, A. 2019.
“Workplace Automation Will Hit Women
Harder Than Men”. Quartz. 01 April 2019.
https://qz.com/1583578/workplace-automation-will-hit-women-harder-than-men/
52 ITU (International Telecommunication Union).
2018. ICTs, LDCS and the SDGs: Achieving
Universal and Affordable Internet in the Least
Developed Countries. Geneva: ITU. https://www.itu.int/en/ITU-D/LDCs/Pages/Publications/LDCs/D-LDC-ICTLDC-2018-PDF-E.pdf
53 Martinez, M. 2019. “Will There Be a Digital
Divide between Smart and Dumb Cities?”
Smart.City_Lab Blog post. 11 July 2019.
https://www.smartcitylab.com/blog/digital-transformation/will-there-be-a-digital-divide-between-smart-and-dumb-cities/
54 Roy Morgan. 2019. Measuring Australia’s
Digital Divide: The Australian Digital Inclusion
Index 2019. https://www.csi.edu.au/media/2019_ADII_Report.pdf
55 Ionos. 2019. “Social Networks: The 5 Most
Common Dangers and Which Actions toTake”. Digital Guide. 06 September 2019.
https://www.ionos.com/digitalguide/online-marketing/social-media/social-networks-dangers-of-social-media/
56 The Royal Society. 2019. iHuman: BlurringLines between Mind and Machine. September 2019. London: The Royal Society. https://royalsociety.org/-/media/policy/projects/ihuman/report-neural-interfaces.pdf
57 United Nations. 2019. United Nations, General Assembly. Report of the Special Rapporteur on Extreme Poverty and Human Rights,
A/74/493 (11 October 2019). https://undocs.
org/A/74/493

The Global Risks Report 202071

FalsePositive

Health Systems under New Pressures
REUTERS/BENOIT TESSIER

The institutions and approaches that have until
now enabled health progress across the world
are straining under gathering pressures andseem outmatched against new risks.
Health systems around the world are at risk of
becoming unfit for purpose. Changing societal,
environmental, demographic and technologicalpatterns are straining their capacity. Vaccine
hesitancy and drug resistance are undermining
progress against pandemics, making it
increasingly difficult to land the final blow

against some of humanity’s biggest killers.
Meanwhile, new vulnerabilities threaten to undo
the dramatic gains in wellness and prosperity
that health systems have supported over thelast century. Non-communicable diseases(NCDs)—such as cardiovascular diseases
or mental illness—have replaced infectious
diseases as the leading cause of death.
As existing health risks resurge and newones emerge, humanity’s past successesin overcoming health challenges are no
guarantee of future results.
73

The slowing ofhealth progress
Global investments in health in recent
decades have yielded substantial gains toboth longevity and quality of life. Over thelong history of our species, the average
life expectancy at birth for people in mostsocieties ranged from 20 to 50 years. Since
1950, this has improved significantly—to
72 years globally,1 of which 63 years on
average are lived in good health, free of
disease or disability (see Figure 6.1).2
Many factors have contributed to thissuccess: scientific breakthroughs; better
hygiene, sanitation and nutrition; healthpolicies and investments made possible
by prosperity; international cooperation;and individual choices. Vaccines illustrate
this point: after germ theory took hold in
the late 19th century, scientists developed
vaccines for many deadly infectious
diseases including smallpox, measles,
polio, pertussis, diphtheria, tetanus andtuberculosis. Smallpox—once among thedeadliest diseases—was the first to beeradicated by national programmes andinternational cooperation in surveillance andcontainment, reinforced by people’s trustin health systems and their willingness to
be vaccinated. Coordinated immunization
programmes continue to prevent millions ofdeaths annually.3

FIGURE 6.1

Life Expectancy at Birth, 1967–2017
Age
85
80
75
70
65
60
55
50
45
40
35

1967
Central African Republic

2017
World

Hong Kong SAR

Source: World Bank Open Data, https://data.worldbank.org/, accessed 15 December 2019.

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However, strained health systems are leading
to worrying trends. Gains in lifespan andhealthspan (the number of years spent ingood health) seem to be slowing in bothdeveloped and developing countries.4 For
example, recent data published by theCenters for Disease Control and Prevention
shows that US life expectancy declined in2017 for the third year in a row, the longest
sustained drop for a century—since the
combined effects of World War I and a global
influenza pandemic.5 In Singapore, although
life expectancy has increased since 1990,
people are spending more of their lives insickness.6 Disparities in health outcomes
persist within and across countries. A
baby born in Hong Kong SAR can expect
to live for 85 years, versus just 52 years in
the Central African Republic (Figure 6.1).7
Meanwhile, rich-poor health gaps are
growing in countries including the United
Kingdom and the United States.8

Pressures on health systems
Gathering pressures are straining healthsystems on many fronts. In this section, we
discuss long-standing challenges as well as
the next generation of health pressures that
health systems are now confronting.

Familiar foes
There is no guarantee that health systems
will continue to improve health, and clear
signs of strain are apparent. Despite historic,
hard-won success against diseases suchas smallpox, some of humanity’s mostformidable global health threats still linger—and other threats, thought to have been
quashed, are resurgent.
Persisting pandemics. Thirty years ago,
polio was endemic in 125 countries,
causing 350,000 clinical cases per year.
After an extraordinary international effort
and US$20 billion in investment, today
there are 99.9% fewer cases and polio
remains endemic in only Afghanistan,
Pakistan and possibly Nigeria—where
geopolitical challenges have complicatederadication.9 Polio could potentially beeradicated in the next four years—but theestimated cost to make that happen would
be another US$4.2 billion.10 The last mile isproving the hardest, for reasons including
persistent political instability and community

REUTERS/EMMANUEL FOUDROT

resistance—which often stems in partfrom a perception that investments in polio
eradication come at the expense of other
health priorities.11 Letting up is not an option
because the short- and long-term benefitsof eradicating this enduring scourge would
be massive.
Similar stories can be told about HIV/AIDS,
tuberculosis and malaria. After years ofremarkable progress as a result of sustained
political commitment and funding via
the Global Fund, ambitions to end these
epidemics by 2030 are being underminedby factors such as diseases’ increasing
resistance to drugs.12
Vaccine hesitancy. The World HealthOrganization (WHO) considers reluctance orrefusal to vaccinate to be among the top 10
threats to global health.13 Growing vaccine
hesitancy has led to outbreaks of measles
worldwide, including in developed countries
where it had largely been eliminated.14
New York City spent US$6 million in 2019
responding to a completely preventable
measles outbreak.15 Making fewer headlines
than the massive Ebola outbreak in the
Democratic Republic of Congo, that country

33 years
widest gap in life expectancy
between countries
also recently saw the world’s largest
measles outbreak, affecting over 200,000
people in less than a year.16 The resurgenceof measles is a symptom of complacency
and recklessness.
Antimicrobial resistance (AMR). As
measles and other infectious diseases
strain health systems by siphoning off
limited resources and attention, overuse ofantibiotics poses a direct threat to healthand healthcare. AMR makes antibiotics
less effective at treating illnesses. Surgeries
that have become routine, infections we
now think of as easily treatable, and somecommon illnesses could again become lifethreatening.17 The WHO estimates that AMR
could result in 10 million deaths by 2050.18
The Global Risks Report 202075

Global health security risks.
Considerable progress has been madesince the Ebola epidemic in West Africa in
2014–2016, but health systems worldwide
are still under-prepared for significant
outbreaks of other emerging infectious
diseases, such as SARS, Zika and MERS.
A recent first-of-its-kind comprehensive
assessment of health security andrelated capabilities across 195 countries
found fundamental weaknesses aroundthe world: no country is fully preparedto handle an epidemic or pandemic.19
Meanwhile, our collective vulnerability
to the societal and economic impacts ofinfectious disease crises appears to
be increasing.20

FIGURE 6.2

Top Global Causes of Death, 2017
Non-communicable diseases
Injuries
Communicable, maternal, neonatal and nutritional diseases% of total
Cardiovascular diseases

31.8%

Neoplasms

17.1%

Chronic respiratory diseases

7.0%

Respiratory infections
and tuberculosis

6.7%

Neurological disorders

5.5%

Diabetes and kidney diseases

4.7%

Digestive diseases

4.2%

Maternal andneonatal disorders

3.5%

Unintentional injuries

3.2%

Enteric infections

3.2%

Self-harm andinterpersonal violence

2.4%

Transport injuries

2.4%

Other NCDs

2.1%

HIV/AIDS and sexuallytransmitted infections

1.9%

Other infectious diseases

1.5%

Source: IHME (Institute for Health Metrics and Evaluation), Global Burden of D
 isease Study
2017, http://www.healthdata.org/policy-report/findings-global-burden-disease-study-2017

76

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Serious as these risks are, it can be argued
that health systems nonetheless have a
blueprint to mitigate them, and successrequires only adequate attention. The samecannot be said for new health risks.

Emerging Risks
Longevity, lifestyle and climate changes
are transforming disease burdens. Healthsystems need new infrastructure, resources
and skills, but in many parts of the world
they are failing to adapt—even as healthcare
spending soars to unsustainable levels.
Non-communicable diseases (NCDs).
As populations grow, age and urbanize,
NCDs and mental disorders have replaced
infectious diseases as the leading threats tohealth and health systems worldwide. Once
considered diseases of the rich world—
linked to low-quality diets, little exercise andthe use of tobacco and alcohol—chronicand degenerative conditions are now a
global epidemic (see Figure 6.2). They
account for 41 million deaths each year, of
which 85% are in low- and middle-income
countries, where people might grow old
and ill before they become rich.21 By 2030,
the WHO expects this figure to increase by
11 million, reaching 52 million in total, anddeaths from infectious diseases to decline by
7 million.22 Depression and anxiety disorders
are on the rise—they increased by 54%
and 42% respectively from 1990 to 2013,
according to WHO data.23 Currently 700
million people worldwide are estimated tohave a mental disorder.24
While infectious diseases and pandemics
pose an acute threat to human life, NCDs
have a gradually crippling effect on thewell-being of individuals and societies.
Besides causing enormous physical andpsychological suffering, the four leading
NCDs—heart disease, cancer, diabetes
and respiratory diseases, along with mental
illness—could have cost the global economy
an estimated US$47 trillion (in treatment andlost productivity) over the 2010s and 2020s.25
Dementia is expected to cost a further
US$2 trillion by 2030,26 as each year brings
10 million new cases.27 NCDs and mental
disorders are difficult to prevent and treat asthey stem from varied and complex causes,
develop slowly, and often co-exist with otherchronic conditions. Effective interventions
need to target both individuals andDementia affects 10 million more
people each year
populations, overcoming entrenched habits
and commercial interests. Even in richer
countries, the medical and social care costsof NCDs could bankrupt health systems.
NCDs could also disrupt societal cohesion:
growing health inequalities could widen
economic inequalities, earlier onset among
younger people could stifle the economic
growth necessary to fund care for older
people, and ageing electorates could prioritize
spending on pensions and healthcare overother issues such as education, infrastructure
and climate resilience.
Climate change health effects. The
WHO deems climate change to be “thegreatest threat to global health in the 21st
century”.28 Human-induced climate change
is already impacting the health of millions
and challenging health systems globally.29 It
affects the quality of the air we breathe andboth the quality and quantity of the water
we drink and the food we eat. Air pollution isalready costing the world more than US$5
trillion from decreased productivity every
year.30 Extreme weather conditions are
putting populations around the world at riskof food and water insecurity. Today’s children
face a future of increasingly serious climaterelated hazards: less nutritious crops, air
pollution exacerbated by burning fossil
fuels, rising average temperatures and other
weather-related disruptions to livelihoods.31
Climate change also exacerbates theincidence of infectious diseases. Warming
temperatures are expanding mosquitofriendly habitats beyond the tropics,
spreading diseases such as malaria, dengue,
yellow fever, West Nile virus and Zika into
new regions. In 2015, the El Niño effectallowed Zika to spread from Brazil to therest of South America.32 In 2012, the UnitedStates logged a record 5,500 cases of West
Nile virus and an increase of 70% in dengue
fever.33 By 2080, extreme global warming
could expose a billion people to mosquitoborne diseases in previously unaffected
regions such as Europe and East Africa.34

REUTERS/VALENTYN OGIRENKO

Demand–capacity mismatch. As more
people live for longer with increasing healthand social care needs, and as new drugs
and technologies are developed, surging
demand and expectations are stretchingcurrent approaches to financing care. Healthexpenditure growth is outpacing inflation in mostcountries.35 It has reached an unsustainable
18% of GDP in the United States,36 resulting
in an increasing transfer of financial risk frominsurance companies to individuals throughrising premiums, co-pays and deductibles;
and in bipartisan anger over drug prices,
hospital bills and out-of-pocket spending.
Most health systems continue to focus onreactive care in hospitals—detecting andtreating disease—and give too little attention
to NCD prevention and control. They have
yet to adapt their infrastructure to combine
online, remote and retail care settings to
improve information, screening, treatment
and support for patients and carers.
Health systems—and governments more
broadly—will also need better health policies,
regulations and promotion strategies toreduce environmental and lifestyle risk
factors of NCDs.
The Global Risks Report 2020

77

Workforce limitations. Most health systems
are training and retaining too few doctors,
nurses and other health workers. For
example, the UK National Health Service
has an estimated 94,000 unfilled vacancies
in hospital and community services37—
almost 8% of its total workforce—andrisks an exodus due to burnout and low
morale.38 Disparities persist across countries,
regions, care levels and areas of medicine.
Nearly half of the world’s population lives incountries with over 100,000 people for every
psychiatrist.39 Even in the United States,with 10.8 psychiatrists per 100,000 people,
almost half of those currently practising areexpected to retire soon.40 The brain drainof health workers places further strain on
poorer and rural parts of the world.

New breakthroughs, new risks
Transformative technologies, medicines
and insurance that could vastly improve thereach and quality of healthcare are on thehorizon—but they also bring new risks andtrade-offs for health systems and societies.

US$

2 million

cost per patient of recent celland gene therapies
Disruptive technologies. Over the
centuries health systems have embraced
many innovations, sometimes without
waiting for them to be proven safe andeffective. Healthcare providers and payers
are already using today’s emerging
technologies—machine learning and artificial
intelligence (AI), sensors, digital therapies,
telemedicine and so on—to support bothclinical and operational decisions: to triage
symptoms,41 interpret diagnostic tests,42
create personalized treatment plans43
and predict re-admissions at a hospital or
epidemics in a population. Combined withhuman capacity, these technologies could
78

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ultimately make it possible for everyone—even in currently fragile, over-burdened
health systems—to access high-quality,
consistent, affordable, timely andconvenient care.
But new technologies also raise risks,
including risks of compromising patient
safety and privacy, as well as introducing
bias. Errors by individual health workers
affect only their patients, whereas theconsequences of AI errors could unfold
at a whole new scale. Since training data
sets in health often skew white and male,44
AI could fail to spot symptoms or devise
effective treatment plans for everyone else.
These outcomes will be tough to predict oravoid because AI’s black-box nature makes
it difficult to understand how it reaches
conclusions—making it hard to spot bias.
Health data are especially vulnerable tocyberattacks,45 with risks of individuals being
identified even from anonymized data (seeChapter 5, Wild Wide Web).
Pharmaceutical revolution. Highly complex,
specialized new drugs promise radically better
treatment for devastating diseases—but theycome at exorbitant prices. For example, threerecently launched cell and gene therapies
cost up to US$2 million per patient. Overthe next few years, between 15 and 30 newcould lead to rewards and incentives forpeople to live healthier lifestyles, but if
unchecked by regulation, it could also
potentially put insurance beyond the reach ofpeople judged to be higher risk for genetic,
environmental or behavioural reasons.

REUTERS/YVES HERMAN/ILLUSTRATION

million-dollar drugs are expected to enter
the market, mostly for cancer.46 New pricing
models—such as multi-year payments
contingent on patient outcomes—are starting
to emerge to address the high costs and risksof these treatments.
But health systems are finding it difficult toadapt amid questions over who should pay,
how high a price can be justified, and what
can be given up to afford new therapies. As
people’s expectations rise, unequal accessto better therapies could deepen healthinequalities within and across countries,
eroding trust in health systems and societal
cohesion. In the longer run, if (or when)gene-editing technologies become available
to enhance physical, cognitive or behaviouralcapabilities, these could result in a society ofgenetically enhanced haves and the merely
natural have-nots.
Risk pools of one. Health insurance looks
set to be transformed by big data andanalytics. As with in-car devices used by car
insurers to reward responsible drivers withlower premiums, health insurers can (with theconsent of customers and the appropriate
levels of data security), capture, store andanalyse personal health and behavioural datafrom wearable—and eventually implantable—
devices. Personalized risk assessment

In some jurisdictions, steps have alreadybeen taken to mitigate this risk in responseto the concerns of people who have taken
predictive genetic tests for certain diseases.
In 2018, the UK Government, together with
the Association of British Insurers (ABI),
consolidated existing agreements on the useof genetic information and created the Codeon Genetic Testing and Insurance. Given
the rapid advances taking place in genetic
research, this Code will be reviewed every
three years to consider the technical, ethicaland societal implications of insurability.
Among other principles, the Code commits
insurance companies to treat applicants for
insurance fairly and not require or pressure
any applicant to undertake a predictive or
diagnostic genetic test.47

Ubiquitous risks of a weak
health system
Good health is the foundation for societal
well-being and a dynamic and prosperous
economy.48 Health systems form part ofcountries’ critical infrastructure: they arevital to security, resilience and growth.
At the population level, health underpins
productivity. Well-functioning health systems
enable countries to respond to, and recoverfrom, natural and human-made disruptions.
Weak systems let pathogens and diseases
spread because they fail to address fakenews about healthcare and preventive
care, psychological responses of fear anddespair, and lack of compliance with healthprofessionals’ requests.49
Like climate change, health risks pose an
expensive and expanding transnational
challenge. Around the world, health systems
need to take a critical look at the fitness of theircurrent approaches and institutions if we are to
maintain the progress of the last century andtackle emerging threats. When health systems
fail to mitigate vulnerabilities and adapt tochanging contexts, they increase the likelihoodof economic crises, political instability, social
ruptures and state-on-state conflict.
The Global Risks Report 202079

Notes1

WHO (World Health Organization). 2019.
Global Health Observatory (GHO) Data:
Life Expectancy. https://www.who.int/gho/mortality_burden_disease/life_tables/situation_trends/en/2

WHO (World Health Organization). 2019.
Global Health Observatory (GHO) Data:
Healthy Life Expectancy (HALE) at Birth.
https://www.who.int/gho/mortality_burden_disease/life_tables/hale_text/en/

3

4

5

80

False Positive

WHO (World Health Organization). 2019. “ThePower of Vaccines: Still Not Fully Utilized”.
https://www.who.int/publications/10-year-review/vaccines/en/
Cardona, C. and D. Bishai. 2018. “TheSlowing Pace of Life Expectancy Gains since1950”. BMC Public Health (2018) 18:151.
DOI 10.1186/s12889-018-5058-9. https://
bmcpublichealth.biomedcentral.com/track/
pdf/10.1186/s12889-018-5058-9
Murphy, S. L. B. S., J. Xu, K. D. Kochanek
and E. Arias. 2018. “Mortality in the UnitedStates, 2017”. Centers for Disease Control
and Prevention, NCHS Data Brief No. 328,
November 2018. https://www.cdc.gov/nchs/
products/databriefs/db328.htm; Bernstein, L.
2018. “U.S. Life Expectancy Declines Again,a Dismal Trend Not Seen since World War I”.
The Washington Post. 29 November 2018.
https://www.washingtonpost.com/national/
health-science/us-life-expectancy-declinesagain-a-dismal-trend-not-seen-since-worldwar-i/2018/11/28/ae58bc8c-f28c-11e8-bc7968604ed88993_story.html

6Lim, J. 2018. 2019. “Singaporeans Living
Longer but Spending More Time in Ill Health:Study”. Today. 20 June 2019. https://www.
todayonline.com/singapore/singaporeans-living-longer-spending-greater-proportion-time-ill-health-study

7

World Bank Open Data. Life Expectancy atBirth. https://data.worldbank.org/indicator/
SP.DYN.LE00.IN?most_recent_value_desc=false, accessed 01 December 2019.

8

Public Health England, Gov.UK. 2018.
“Health Profile for England 2018. Chapter
5: Inequalities in Health”. https://www.gov.
uk/government/publications/health-profilefor-england-2018/chapter-5-inequalities-inhealth; Bleich, S. N., M. P. Jarlenski, C. N.
Bell and T. A. LaVeist. 2012. “Health Inequalities: Trends, Progress, and Policy”. Annual
Review of Public Health. 33 (1): 7–40. https://www.annualreviews.org/doi/full/10.1146/annurev-publhealth-031811-124658

9

WHO (World Health Organization). 2018.
Review of Polio Endemic Countries. Reportof the Independent Monitoring Board of the
Global Polio Eradication Initiative on Progress in Afghanistan, Nigeria and Pakistan.
September 2018. https://www.who.int/
immunization/sage/meetings/2018/october/4_Review_Polio_Endemic_Countires_Report_IMB_Final_revised.pdf

10 WHO (World Health Organization). 2019.
Proposed programme budget 2020–2021.
13 May 2019. https://apps.who.int/gb/ebwha/
pdf_files/WHA72/A72_INF3-en.pdf
11 Razum, O., D. Sridhar, A. Jahn, S. Zaidi, G.
Ooms and O. Müller. 2019. “Polio: From Eradication to Systematic, Sustained Control”.
BMJ Global Health 2019; 4:e001633. https://gh.bmj.com/content/4/4/e001633
12 The Global Fund. 2019. “Global Fund Donors
Pledge US$14 Billion in Fight to End Epidemics”. Press Release, 10 October 2019. https://www.theglobalfund.org/en/news/2019-10-10global-fund-donors-pledge-usd14-billion-infight-to-end-epidemics/
13 WHO (World Health Organization). 2019. “TenThreats to Global Health in 2019”. https://www.who.int/emergencies/ten-threats-toglobal-health-in-2019
14 CDC (Centers for Disease Control and Prevention). 2019. “Global Health: Global Measles Outbreaks”. https://www.cdc.gov/globalhealth/measles/globalmeaslesoutbreaks.htm
15 Soucheray, S. 2019. “US Measles Cases
Hit 1,234 as Brooklyn Outbreak Called
Over”. CIDRAP News. 03 September 2019.
http://www.cidrap.umn.edu/news-perspective/2019/09/us-measles-cases-hit-1234brooklyn-outbreak-called-over
16 UNICEF. 2019. “As Measles Deaths in the
Democratic Republic of the Congo Top
4,000, UNICEF Rushes Medical Kits to
Health Centers and Vaccinates Thousands
More Children”. Press Release, 09 October
2019. https://www.unicef.org/press-releases/
measles-deaths-democratic-republic-congotop-4000-unicef-rushes-medical-kits-health
17 Wellcome. 2019. “Q&A: What Are Drug-Resistant Infections?” Wellcome News. 09 September 2019. https://wellcome.ac.uk/news/
what-are-drug-resistant-infections
18 Review on Antimicrobial Resistance. 2016.
Tackling Drug-Resistant Infections Globally:
Final Report and Recommendations. May
2016. Wellcome Trust and UK Government. https://amr-review.org/sites/default/
files/160525_Final%20paper_with%20cover.
pdf

19 NTI (Nuclear Threat Initiative). 2019. “Global Health Security Index: Inaugural Global
Health Security Index Finds No Country Is
Prepared for Epidemics or Pandemics”. NTI.
Press Release, 24 October 2019. https://www.nti.org/newsroom/news/inaugural-global-health-security-index-finds-no-country-prepared-epidemics-or-pandemics/
20 World Economic Forum. 2019. “OutbreakReadiness and Business Impact Protecting
Lives and Livelihoods across the Global
Economy”. White Paper, in collaboration with
Harvard Global Health Institute. https://www.
weforum.org/whitepapers/outbreak-readiness-and-business-impact-protecting-lives-and-livelihoods-across-the-global-economy
21 WHO (World Health Organization). 2018. Fact
Sheet on Noncommunicable Diseases. 1
June 2018. https://www.who.int/news-room/fact-sheets/detail/noncommunicable-diseases; Ha, B., S.H. Lee, and D. Park. 2019.
“Will Asia Grow Old Before Becoming Rich?”
BRINK News. 03 July 2018. https://www.
brinknews.com/will-asia-grow-old-before-becoming-rich/
22 WHO (World Health Organization). 2011.
Global Status Report on Noncommunicable
Diseases 2010. https://www.who.int/nmh/
publications/ncd_report2010/en/
23 Mnookin, S. 2016. “Out of the Shadows:
Making Mental Health a Global Development Priority”. World Bank and World HealthOrganization background paper. http://www.
who.int/mental_health/advocacy/wb_background_paper.pdf
24 Patel, V. and S. Saxena. 2014. “Transforming
Lives, Enhancing Communities—Innovationsin Global Mental Health”. New England Journal of Medicine 370 (6): 498–501.
25 Bloom, D. E., E. T. Cafiero, E. Jané-Llopis, A.
Abrahams-Gessel, L. R. Bloom, S. Fathima,
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28 WHO (World Health Organization). 2019.
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33 Scheer, R. and D. Moss. 2013. “Mosquito-Borne Diseases on the Uptick—Thanks
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34 Dunne, D. 2019. “Mosquito-Borne Diseases
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int/csr/disease/ebola/one-year-report/factors/en/REUTERS/MIKE SEGAR

Appendices

REUTERS/STRINGER
85

Appendix A:
Descriptions of Global Risks 2020
Global Risks
A “global risk” is defined as an uncertain event or condition that, if it occurs, can cause significant negative impact
for several countries or industries within the next 10 years.

Environmental

Economic

To ensure legibility, the names of the global risks have been abbreviated in the figures. The portion of the full nameused in the abbreviation is in bold.

86

Global Risk

Description

Asset bubbles in a major economy

Unsustainably overpriced assets such as commodities, housing, sharesetc. in a major economy or region

Deflation in a major economy

Prolonged near-zero inflation or deflation in a major economy or region

Failure of a major financial
mechanism or institution

Collapse of a financial institution and/or malfunctioning of a financial systemthat impacts the global economy

Failure/shortfall of criticalinfrastructure

Failure to adequately invest in, upgrade and/or secure infrastructure
networks (e.g. energy, transportation and communications), leading topressure or a breakdown with system-wide implications

Fiscal crises in key economies

Excessive debt burdens that generate sovereign debt crises and/or
liquidity crises

High structural unemployment or
underemployment

A sustained high level of unemployment or underutilization of the
productive capacity of the employed population

Illicit trade (e.g. illicit financial flows,
tax evasion, human trafficking,organized crime)

Large-scale activities outside the legal framework such as illicit financial
flows, tax evasion, human trafficking, counterfeiting and/or organized crimethat undermine social interactions, regional or international collaboration,and global growth

Severe energy price shock(increase or decrease)Significant energy price increases or decreases that place further
economic pressures on highly energy-dependent industries
and consumers

Unmanageable inflation

Unmanageable increases in the general price levels of goods and services
in key economies

Extreme weather events(e.g. floods, storms)

Major property, infrastructure, and/or environmental damage as well as lossof human life caused by extreme weather events

Failure of climate-change
mitigation and adaptation

The failure of governments and businesses to enforce or enact effective
measures to mitigate climate change, protect populations and help
businesses impacted by climate change to adapt

Major biodiversity loss andecosystem collapse (terrestrial
or marine)

Irreversible consequences for the environment, resulting in severely
depleted resources for humankind as well as industries

Major natural disasters (e.g.
earthquakes, tsunamis, volcanic
eruptions, geomagnetic storms)

Major property, infrastructure, and/or environmental damage as well as
loss of human life caused by geophysical disasters such as earthquakes,
volcanic activity, landslides, tsunamis or geomagnetic storms

Human-made environmental
damage and disasters(e.g. oil spills, radioactive
contamination)

Failure to prevent major human-made damage and disasters, including
environmental crime, causing harm to human lives and health,infrastructure, property, economic activity or the environment

AppendicesGeopoliticalSocietalTechnological

Failure of national
governance (e.g. failure of ruleof law, corruption, politicaldeadlock)

Inability to govern a nation of geopolitical importance as a result of weakrule of law, corruption or political deadlock

Failure of regional or
global governanceInability of regional or global institutions to resolve issues of economic,
geopolitical or environmental importanceInterstate conflict with
regional consequences

A bilateral or multilateral dispute between states that escalates into
economic (e.g. trade/currency wars, resource nationalization), military,
cyber, societal or other conflict

Large-scale terrorist attacks

Individuals or non-state groups with political or religious goals thatsuccessfully inflict large-scale human or material damage

State collapse or crisis(e.g. civil conflict, military coup,
failed states)

State collapse of geopolitical importance due to internal violence, regional
or global instability, military coup, civil conflict, failed states etc.

Weapons of mass destruction

The deployment of nuclear, chemical, biological, and radiological
technologies and materials, creating international crises and potential forsignificant destruction

Failure of urban planning

Poorly planned cities, urban sprawl and associated infrastructure thatcreate social, environmental and health challenges

Food crises

Inadequate, unaffordable or unreliable access to appropriate quantities andquality of food and nutrition on a major scale

Large-scale involuntary migration

Large-scale involuntary migration induced by conflict, disasters,
environmental or economic reasons

Profound social instability

Major social movements or protests (e.g. street riots, social unrest) that
disrupt political or social stability, negatively impacting populations andeconomic activity

Rapid and massive spread of
infectious diseases

Bacteria, viruses, parasites or fungi that cause uncontrolled spread of
infectious diseases (for instance as a result of resistance to antibiotics,
antivirals and other treatments) leading to widespread fatalities andeconomic disruption

Water crises

A significant decline in the available quality and quantity of fresh water,
resulting in harmful effects on human health and/or economic activity

Adverse consequences oftechnological advances

Intended or unintended adverse consequences of technological advancessuch as artificial intelligence, geo-engineering and synthetic biology
causing human, environmental and economic damage

Breakdown of critical information
infrastructure and networks

Cyber dependency that increases vulnerability to outage of criticalinformation infrastructure (e.g. internet, satellites) and networks, causingwidespread disruption

Large-scale cyberattacks

Large-scale cyberattacks or malware causing large economic damage,geopolitical tensions or widespread loss of trust in the internet

Massive incident of data fraud
or theftWrongful exploitation of private or official data that takes place on an
unprecedented scale

The Global Risks Report 202087Appendix B:
Global Risks Perception Survey
The Global Risks Perception Survey (GRPS) is the World Economic Forum’s source of original risks data,
harnessing the expertise of the Forum’s extensive network of business, government, civil society and thought
leaders. The survey was conducted from 5 September to 22 October 2019 among the World Economic Forum’s
multistakeholder communities (including the Global Shapers Community), the professional networks of its
Advisory Board, and members of the Institute of Risk Management. The results of the GRPS are used to create
the Global Risks Landscape and Interconnections Map presented at the beginning of the report, and to offer
insights used throughout.
Both the GRPS and the Global Risks Report adopt the following definition of global risk:
Global risk: A “global risk” is an uncertain event or condition that, if it occurs, can cause significant negative
impact for several countries or industries within the next 10 years.

Methodology
The world in 2020
In the first section of the GRPS, respondents wereasked to assess whether the risks associated with 40
current issues would increase or decrease in 2020
compared to 2019 (see Table B.1 below for full results).
Respondents were also given the option to name anyother issue(s), not included in the 40 risks listed thatthey expect to be a source of increased risk in 2020.
We use these open responses to assess the need to
update our list of risks from year to year.
The possible answers to survey questions ranged from“significantly decrease” to “significantly increase” ona scale from 1 to 5, with 1 representing “significantly

88

Appendicesdecrease” and 5 representing “significantly increase”.
To reduce framing bias, the values between this range
were not assigned specific wording. For each risk, theshare for each answer was obtained by dividing thenumber of respondents who selected that answer by
the total number of answers.
Respondents were asked to base their answers toeach of these 40 risks on a global level. They wereasked the following question: “On a global level, do
you think that in 2020 the risks presented by thefollowing issues will increase or decrease compared
to 2019?”

T A B L E B .1:

Percent of respondents who think a risk will increase in 2020
compared to 2019.

Economic confrontations between major powers

78.5%

Foreign interference in domestic politics

60.5%

Domestic political polarization

78.4%

Civil unrest (including strikes and riots)

60.2%

Extreme heat waves

77.1%

Hostility against minorities

57.5%

Destruction of natural ecosystems

76.2%

Loss of confidence in collective security alliances

57.4%

Cyberattacks: disruption of operations
and infrastructure

76.1%

Criminal use of cryptocurrencies

56.3%

Protectionism regarding trade and investment

76.0%

Involuntary climate-related migration

53.8%

Populist and nativist agendas

75.7%

Erosion of global policy coordination on
climate change

53.0%

Cyberattacks: theft of data/money

75.0%

High levels of crisis-driven or economic migration

53.0%

Recession in a major economy

72.8%

Job losses due to technology

47.3%

Uncontrolled fires

70.7%

Corrupt leadership

46.6%

Water crises

69.3%

Debt defaults (public or private)

44.7%

Loss of privacy (to companies)

69.1%

Military actions short of war

44.3%

Loss of trust in media/information sources

68.4%

Erosion of global supply chains

43.7%

Loss of privacy (to governments)

67.4%

High levels of youth unemployment

42.9%

Human health impacted by air, plastic andwater pollution

67.1%

Ineffective monetary stimuli

42.8%

Public anger against elites

66.3%

Market collapse of stock or other assets

40.9%

Protectionism against foreign workers

65.7%

Currency crises

40.6%

Inequality (within countries)

65.0%

Deep or widespread poverty

36.5%

Personal identity theft

63.8%

State-on-state military conflict

27.3%

Authoritarian leadership

62.9%

Terrorist attacks

23.1%

Economic

Environmental

GeopoliticalSocietalTechnological

The Global Risks Report 2020

89

The global risks landscapeFor each of the 30 global risks listed in Appendix A,
respondents were asked to assess: (1) the likelihoodof each global risk occurring over the course of thenext 10 years, and (2) the severity of its impact at a
global level if it were to occur, both on a scale from
1 to 5 as follows:–

Likelihood: a value of 1 for “very unlikely” and 5 for“very likely”–

Impact: a value of 1 for “minimal” impact and 5 for“catastrophic” impact

To reduce timing bias, respondents were reminded
to assess the 30 risks over a 10-year period, as
opposed to a time horizon of one year for the previous
40 risks. Again, to reduce framing bias, the values
within the 1–5 scale were not assigned specificwording. Respondents could leave the question
completely blank. Partial responses for any risk—those
assessing only the likelihood of occurrence or only thenegative impact—were not included in the results.

Formally, for any given risk i, its likelihood and impact—
denoted respectively likelihood
Ni i and impacti—are:likelihoodi
likelihoodi

1likelihoodi,n
Ni N
Ni
1 i
likelihoodi,n
Ni
Ni

Ni

1
impacti =impacti,n
Ni N
i
n=1
1
impacti =impacti,nNiwhere Ni is the number ofn=1
respondents for risk i,and likelihoodi,n and impacti,n are, respectively, thelikelihood and impact assigned by respondent n torisk i. The likelihood is measured on a scale of 1–5
and the impact on a scale of 1–5. Ni is the number of
respondents for risk i who assessed both the likelihoodand impact of that specific risk.

A simple average for both likelihood and impact foreach of the 30 global risks was calculated on thisbasis. The results are illustrated in the Global Risks
Landscape 2020 (Figure II).

Global risks interconnections
Part 3 of the GRPS assesses interconnections
between pairs of global risks.
For the interconnections between pairs of risks, survey
respondents were asked the following question:“Global risks are not isolated, and it is important toassess their interconnections. In your view, which are
the most strongly connected global risks? Please
select three to six pairs of global risks, from the 30

90

Appendicesglobal risks below (one risk can be connected toany one of the other 29 global risks).” The results areillustrated in the Global Risks Interconnections Map
2020 (Figure IV). A tally was made of the number oftimes each pair was cited.
In the Global Risks Landscape and the Interconnections
Map, the size of each risk is scaled according to theweight of that node in the system.

Completion thresholds
We received 1,047 total responses to the GRPS towhich we applied an overall standard deviation check, aswell as specific completion thresholds for each sectionof the survey:–––

Overall: nine responses yielded a standard
deviation of zero in the increase/decrease scoresfor Part 1 of the survey, as well as the likelihoodand impact scores for Part 2. These responses
were not included in the survey results.

Part 2 “Assessment of Global Risks”:
The answers from the 718 respondents who
assessed the impact and likelihood of at least
one risk were used to compute the results (leaving
the question entirely blank was not considered avalid answer).

–

Part 3 “Global Risk Interconnections”: The
answers from the 628 respondents who selected
at least one valid pair of risks were used tocompute the results.

Part 1 “The World in 2020”: The answers fromthe 777 respondents who assessed at least fourof the risks listed in this question were used tocompute the results.

Figure B.1 presents some key descriptive statistics andinformation about the profiles of the respondents.

F I G U R E B .1

Survey Sample Composition
GenderExpertise

Other
0.39%
Male
68.44%

Environment
9.10%

Economics
25.07%

Female31.17%
Geopolitics
11.87%

Organization typeTechnology
13.06%

Other
22.16%

Society
13.06%

Internationalorganizations
10.05%

Business
37.73%

Academia
20.63%

NGO
11.36%

Other
5.35%
Government
14.88%

Age distribution

Region29.08%

26.69%

22.97%

North America
16.88%

14.21%

Eurasia
2.21%

4.38%

2.66%

<30

Europe44.42%

30–39

40–49

50–59

60–69

>70

Latin America
and the Caribbean
8.83%

Middle East andNorth Africa
3.90%
Sub-Saharan Africa
6.10%

East Asiaand the Pacific
8.96%South Asia
8.70%

Source: Global Risks Perception Survey 2019-2020.

The Global Risks Report 202091

Acknowledgements

The lead author of The Global Risks Report 2020 is
Emilio Granados Franco, Head of Global Risks andGeopolitical Agenda.

Smith-Bingham (Executive Director, Marsh & McLennan
Advantage Insights) for their contributions throughout theplanning and drafting of the report.

At the World Economic Forum, a debt of gratitudeis owed to Professor Klaus Schwab (Founder andExecutive Chairman), Børge Brende (President) and
Mirek Dusek (Deputy Head, Centre for Regional andGeopolitical Affairs), under whose guidance this reporthas been produced. Lee Howell (Head of Global
Programming) has been an important mentor.

We are also grateful to our three Academic Advisers:
the National University of Singapore, the Oxford Martin
School at the University of Oxford and the Wharton
Risk Management and Decision Processes Center at
the University of Pennsylvania.

This report has relied heavily on the dedication andexpertise of the Global Risks and Geopolitics team: Ariel
Kastner, Melinda Kuritzky, Richard Lukacs and Philip
Shetler-Jones. Thanks also to the other members of
The Global Risks Report 2020 team: Oliver Cann, Aylin
Elçi, Emily Farnworth, Maxwell Hall and Yann Zopf.
A special thanks goes to our partners acrossWorld Economic Forum teams as well as external
experts who have contributed to specific chaptersof this report:
Chapter 2, The Fraying Fundamentals.
Sheikh Tanjeb Islam.
Chapter 3, A Decade Left. Dominik Breitinger, Emily
Farnworth, Andrew Pickens and Jahda Swanborough.
Chapter 4, Save the Axolotl. Marco Albani, Akanksha
Khatri, Marie Quinney and Kimberly Nicole Pope.
Chapter 5, Wild Wide Web. Francesca Bosco,
Amy Jordan, Zvika Krieger, Rebekah Lewis,
Adrien Ogée, Thomas Philbeck, Algirde Pipikaite andAnelia Uzunova.
Chapter 6, False Positive. Ryan Morhard.
Thanks also go to members of the Club of Rome(George Biesmans, Sandrine Dixson-Declève, Gail
Whiteman) for their contributions.
*****
We would like to thank our Strategic Partners,
Marsh & McLennan (MMC) and Zurich InsuranceGroup, and in particular Daniel Glaser (Chief Executive
Officer, MMC) and Mario Greco (Chief Executive
Officer, Zurich Insurance Group). Thanks also toJohn Drzik (President, Global Risk and Digital, MMC)
and Peter Giger (Group Chief Risk Officer, Zurich
Insurance Group).
Special gratitude is due to John Scott (Head of
Sustainability Risks, Zurich Insurance Group) and Richard

The report has greatly benefited from the insightand expertise of the members of the Global Risks
Report Advisory Board: Rolf Alter (Hertie Schoolof Governance), Sharan Burrow (International Trade
Union Confederation), Winnie Byanyima (Oxfam
International, through August 2019), Marie-Valentine
Florin (International Risk Governance Center), Al Gore
(Generation Investment Management), Carolyn Kousky(Wharton Risk Management and Decision Processes
Center), Kok Kwang Phoon (National University ofSingapore), Julian Laird (Oxford Martin School),
Pascal Lamy (Jacque Delors Institute), Maleeha Lodhi(Government of Pakistan), Gary Marchant (ArizonaState University), Robert Muggah (Igarapé Institute),
Moisés Naím (Carnegie Endowment for International
Peace), Naomi Oreskes (Harvard University), Jonathan
Ostry (International Monetary Fund), Carol Ouko-Misiko(Institute of Risk Management), Eduardo Pedrosa(Pacific Economic Cooperation Council), Daniel Ralph(Cambridge Centre for Risks Studies), Nouriel Roubini(New York University), John Scott (Zurich InsuranceGroup), Carsten Schrehardt (Federal Ministry of
Defence of Germany), Richard Smith-Bingham (Marsh& McLennan), Ursula von der Leyen (Government ofGermany, through July 2019), Ngaire Woods (Universityof Oxford) and Alexandra Zapata (Mexican Institute forCompetitiveness).
*****
We are grateful to the following individuals from ourStrategic Partners and Academic Advisors.
Marsh & McLennan: Rob Bailey,Alex Bernhardt, Helga Birgden, Leslie Chacko, Blair
Chalmers, John Colas, Lorna Friedman, Jason Groves,
Kavitha Hariharan, Rachel Lam, Jordan Parker,
Hilary Pereira, Lily Phan, Viet Hoang Phan, Tom
Quigley, Stephen Szaraz, Alex Wittenberg andAmelia Woltering.
Zurich Insurance Group: Paige Adams, Lori Bailey,Francis Bouchard, Matteo Capolei, Laura Castellano,
Anette Dahl-Hiscott, Daniel Eherer, Lillian Labbat,
Wen Lin, Alison Martin, Jessica McLellan, Guy Miller,
Eugenie Molyneux, Pavel Osipyants, Marc Radice,
Gregory Renand, Jennifer Schneider and Angel Serna.
The Global Risks Report 202093

National University of Singapore: Tan Eng Chye and
Ho Teck Hua.
Oxford Martin School: Charles Godfray.
Wharton: Howard Kunreuther.
*****
We would like to thank the respondents who completed
the Global Risks Perception Survey. Thanks also go
to the participants in our Global Risks Workshops in
Geneva on 11 September 2019, in New York City on 15
October 2019 and in Washington, DC on 16 October 2019:
Geneva: Heba Aly (The New Humanitarian), Alison
Bewick (Nestlé), Walter Bohmayr (Boston Consulting
Group), Sebastian Brack (Kofi Annan Foundation),
Vincent Chetail (The Graduate Institute of Internationaland Development Studies), Marie-Valentine Florin(International Risk Governance Center at Ecole
Polytechnique de Lausanne), Maya Horowitz (Check
Point Software Technologies, Ltd.), Michael Ineichen(International Service for Human Rights), Hichem
Khadhraoui (Geneva Call), Jovan Kurbalija (Geneva
Internet Platform & Secretariat of the UN High-level
Panel on Digital Cooperation), Esther Lynch (European
Trade Union), Robert Marinkovic (International
Organization of Employers), Tim Noonan (International
Trade Union Confederation), Danny Quah (National
University of Singapore), Jean-Marc Rickli (Geneva
Centre for Security Policy), Carsten Schrehardt (Federal
Ministry of Defence of Germany), John Scott (Zurich
Insurance Group), Lutfey Siddiqi (London School of
Economics and Political Science), Richard SmithBingham (Marsh & McLennan Companies), Michael
Sparrow (World Climate Research Programme),
Elisabeth Tuerk (United Nations Conference on Tradeand Development), Jacob van der Blij (GAVI), Charlotte
Warakaulle (CERN – European Organization for Nuclear
Research), Gail Whiteman (Lancaster University
Management School), Susan Wilding (CIVICUS: World
Alliance for Citizen Participation), Carolyn Williams(Institute of Risk Management), Irina Zodrow (United
Nations International Strategy for Disaster Reduction).
New York City: Jasmina Byrne (United Nations
Children’s Fund), Alexis Crow (PwC), Barry Franklin(Zurich Insurance Group), Jean-Marie Guéhenno(Center for Humanitarian Dialogue), Nancy J. Luquette(S&P Global), Oliver Money (International Rescue
Committee), Robert Muggah (Igarapé Institute), Susan
Myers (UN Foundation), Alexandra Pichler Fong (UNDepartment of Political Affairs), Reid Sawyer (Marsh& McLennan Companies), Steven Siqueira (United
Nations Office of Counter Terrorism and UN CounterTerrorism Center), Adam Tooze (Columbia University).
94

The Global Risks Report 2020

Washington, DC: Samuel Brannen (Center for Strategic
and International Studies), Kaysie Brown (United Nations
Foundation), Amir Eftekhari (Jacobs Engineering Group
Inc.), Sherri Goodman (Wilson Center), Ryan Greer(Anti-Defamation League), Jane Harman (Wilson
Center), Meg King (Wilson Center), Robert Litwak(Wilson Center), King Mallory (Rand Corporation),
Crystal Patterson (Facebook), Lauren Herzer Risi
(Wilson Center), Robert Sheldon (CrowdStrike), PaulStares (Council on Foreign Relations).
A special thanks goes to the Wilson Center forco-hosting the Washington, DC workshop. We owe
particular gratitude to Jane Harman, Robert Litwak,
Meg King and Matthew Silberman for their support
and contributions to our efforts.
In addition to those mentioned above, we extend
our thanks to the following individuals for their timeand help: David Aikman, Marisol Argueta, Daniela
Barat, Nayia Barmapaliou, Teresa Belardo, Micael
Bermudez, Sakshi Bhatnagar, Monika Boerlin, Anna
Bruce-Lockhart, Pablo Burkolter, Denise Burnet,
Diego Bustamante, Angélique Cado, Elizabeth Caputo,
Andrew Caruana Galizia, Gill Cassar, Abhinav Chugh,Jennifer Clauzure, Arnaud Colin, Adeline Colonimos,
Victoria Crawford, Roberto Crotti, Alexander Crueger,
Nicholas Davis, Attilio di Battista, Beatrice Di Caro,
William Dixon, Makiko Eda, Jaci Eisenberg, Nima
Elmi, Anne Marie Engcroft Larsen, Gaia Felber, Cody
Feldman, Jennifer Francis, Thierry Geiger, Fernando
Gomez, Wadia Ait Hamza, Teresa Hartmann, Audrey
Helstroffer, Kiriko Honda, Jeremy Jurgens, Mark Jones,
Maroun Kairouz, Nikhil Kamath, Elsie Kanza, Nadège
Kehrli, Andrej Kirn, David Knowles, Patrice Kreidi, Tarika
Lall, James Landale, Martina Larkin, Sam Leakey,
Sarah Leboulanger, Joo-Ok Lee, Mariah Levin, Silvia
Magnoni, Gayle Markovitz, Maryne Leboidre, Viraj
Mehta, Stephan Mergenthaler, Adrian Monck, Fulvia
Montresor, Marie Sophie Müller, Jamie Palter, Ceri
Parker, Gemma Parkes, Robin Pomeroy, Arturo Rago,
Nadia Raquillet, Katja Rouru, Eeva Salvik, Richard
Samans, Pierre Saouter, Miriam Schive, Olivier Schwab,
Sarah Shakour, Paul Smyke, Ahmed Soliman, Callie
Stinson, Henry Taylor, Terri Toyota, Jean-François Trinh
Tan, Dominic Waughray, Justin Wood, Pim Valdre,
Carida Zafiropoulou-Guignard and Saadia Zahidi.
Design and Production: Thank you to all those
involved in the design and production of this year’s
report. At the World Economic Forum: Javier Gesto,
Floris Landi, Jordynn McKnight, Liam Ó Cathasaigh
and Jean Philippe Stanway. And our external
collaborators: Robert Gale, Travis Hensgen, and Moritz
Stefaner (data visualization); Hope Steele (editing);
Patrik Svensson (cover artwork); and Andrew Wright(writing and editing).

REUTERS/STRINGER

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