Davos report: Cost-of-living crisis overshadows climate

Jan 10, 2023, 12:07 PM | Updated: Jan 11, 2023, 2:10 am

FILE - Gerenal view of wind turbines at the Saint-Nazaire offshore wind farm, off the coast of the ...

FILE - Gerenal view of wind turbines at the Saint-Nazaire offshore wind farm, off the coast of the Guerande peninsula in western France, on Sept. 22, 2022. Climate change is the global economy's biggest long-term challenge but one the world is least prepared to tackle because of short-term problems led by a cost-of-living crisis, the World Economic Forum said in a report Wednesday, Jan. 11, 2023. (Stephane Mahe/Pool photo via AP, File)

(Stephane Mahe/Pool photo via AP, File)

LONDON (AP) — Climate change is the global economy’s biggest long-term challenge but one the world is least prepared to tackle because of short-term problems led by a cost-of-living crisis, the World Economic Forum said in a report Wednesday.

The group’s Global Risks Report, released ahead of its annual gathering of government leaders and business elites next week in the Swiss Alpine resort of Davos, offers a bleak outlook.

The report based on a survey of 1,200 risk experts, industry bosses and policymakers says the biggest challenges over the next decade involve the environment, yet more immediate challenges are distracting world leaders, some of whom will be in Davos for panel discussions and schmoozing at an event that has faced criticism for not producing concrete action.

“The coming years will present tough trade-offs for governments facing competing concerns for society, the environment and security,” according to the report co-authored with global insurance broker Marsh McLennan and Zurich Insurance Group.

“A failure to mitigate climate change is ranked as one of the most severe threats in the short term but is the global risk we are seen to be the least prepared for,” the report said.

Out of the top 10 long-term challenges, respondents said the top four are climate related: failure to limit or adapt to climate change; natural disasters and extreme weather; biodiversity loss; and ecosystem collapse.

Short-term risks are testing pledges to reach net zero emissions of heat-trapping carbon dioxide and “have exposed a gap between what is scientifically necessary and politically palatable,” the report said.

“We need to be better at balancing the short-term outlook of risk with the long-term outlook of risk,” said Carolina Klint, risk management leader at Marsh, “and we need to make decisions now that might feel counterintuitive because they might be a little bit costly upfront, but it’s just unavoidable.”

One example is the big investment needed to speed up the transition away from fossil fuels to sustainable energy, Klint said.

Top of the list of challenges over the next two years is a cost-of-living crisis sparked by the COVID-19 pandemic and Russia’s war in Ukraine, which has sent food and energy prices soaring, squeezing household finances worldwide.

Other aftershocks set off by the pandemic and the war have signaled a new and gloomier era for the global economy.

Governments and central banks face the dilemma of reining in inflation by hiking interest rates, which runs the risk of sparking recession, or spending money to shield people from its worst effects, which could add to already-high public debt levels.

The report also said deglobalization is increasingly in vogue. The war in Ukraine highlighted Europe’s dependence on Russian oil and natural gas while microchip shortages sparked by pandemic restrictions spotlighted the prevalence of semiconductor manufacturing in Asia.

“Economic warfare is becoming the norm,” the report said. Tensions will rise as global powers use economic policies defensively to reduce reliance on rivals and offensively to limit the rise of competing nations.

On top of that, society is increasingly polarized. Economic and social divisions are turning into political ones with people far apart on immigration, gender, reproductive rights, religion, climate and more — contributing to the decline of democracies.

A big factor is misinformation and disinformation from political influencers spreading extreme beliefs and swaying elections with social media “echo chambers,” the report said.

Another growing risk is cybercrime and cyber insecurity stemming from increasingly connected public services such as transport, financial and water systems, which leaves them vulnerable to online disruptions and attacks.

The race to develop new technologies in areas like artificial intelligence, quantum computing and biotechnology will offer partial solutions to some crises, the report said, but it also could widen inequality because poorer countries can’t afford them.

“The resulting new economic era may be one of growing divergence between rich and poor countries,” the report said, “and the first rollback in human development in decades.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


moore redmond washington...

Associated Press

U.S. Supreme Court rules against Redmond couple challenging foreign income tax

The court ruled in the case of Charles and Kathleen Moore, of Redmond, Washington after they previously challenged a $15,000 tax bill.

2 days ago

Image:The New York Giants' Willie Mays poses for a photo during baseball spring training in 1972. M...

Associated Press

Willie Mays, Giants’ electrifying ‘Say Hey Kid,’ dies at 93

Willie Mays, whose singular combination of talent, drive and exuberance made him one of baseball’s greatest players, has died. He was 93.

3 days ago

Image: This photo provided by the Washington Department of Ecology shows a derailed BNSF train on t...

Associated Press

Judge orders BNSF to pay Washington tribe nearly $400M for trespassing with oil trains

BNSF Railway must pay the sum to a Native American tribe in Washington after it ran 100-car trains with crude oil on the tribe's reservation.

5 days ago

Photo: In this photo provided by Tieanna Joseph Cade, an amusement park ride is shown stuck with 30...

Associated Press

Crews rescue 28 people trapped upside down high on Oregon amusement park ride

Emergency crews in Oregon rescued 28 people after they were stuck dangling upside down high on a ride at a century-old amusement park.

5 days ago

juneteenth shooting texas...

Associated Press

2 killed and 6 wounded in shooting during a Juneteenth celebration in a Texas park

A shooting in a Texas park left two people dead and six wounded, including two children, on Saturday, authorities said.

6 days ago

Photo: Israeli soldiers drive a tank near the Israeli-Gaza border, in southern Israel, Wednesday, J...

Jack Jeffery, The Associated Press

8 Israeli soldiers killed in southern Gaza in deadliest attack on Israeli forces in months

An explosion in Gaza killed eight Israeli soldiers, the military said Saturday, making it the deadliest attack on Israeli forces in months.

7 days ago

Davos report: Cost-of-living crisis overshadows climate