We discuss the reports which emerged from the recent World Economic Forum (WEF) in Davos and show that climate change adaptation is now a well-considered issue in the discussions surrounding the global economy.
The World Economic Forum recently finished their Annual Meeting for 2013 and climate change adaptation has featured prominently in the discussions. One of the first reports that they release prior to the discussions was their Global Risk Report for 2013 and ranked 'failure to recognise climate change adaptation' emerging as one of the top ten risks. The WEF class global risks as those that will materialise at the national level and that cannot be prevented by one country alone. http://www.weforum.org/reports/global-risks-2013-eighth-edition
The Global Risk Report is based on a survey of over 1,000 experts from industry, government, academia and civil society, who were asked to comment on over 50 global risks. Climate change was widely discussed in the report with the issue separated into 'the unforseen consequences of climate change mitigation' and the 'failure to recognise climate change adaptation'. The WEF specifically defined the adaptation risk as one that sees:
“Governments and business fail to enforce or enact effective measures to protect populations and transition businesses impacted by climate change.” (WEF 2013, p.46).
Failure to recognise climate change adaptation was ranked as the second highest risk in the Environment theme of the survey. Interestingly its risk ranking has increased since 2012 and is now ranked as one of the top ten issues likely to emerge over the coming decade. The report states that the combination between environmental risks and the current economic risks has the makings of a ‘perfect global storm’.
The Global Risk Report also explores X Factor risks, which are outlying risks founded in science but are vaguely and the consequence remain uncertain. Two of the five X Factor risks discussed are associated with climate change - runaway climate change and risks from rogue geo-engineering responses to climate change. The discussion on runaway climate change highlights the fact that many of the fingerprints of climate change (e.g. Arctic sea ice melt and land ice melt in Greenland) are occurring faster than original models. This has considerable ramifications for those in the private sector who are beginning to explore climate change risks. It would seem prudent that organisations who are sensitive to the effects of climate change consider outlying risks and those that fall outside the forecasted timing and extent of of current model projections.
The Global Risk Report could be recognised as a turning point for climate change adaptation recognition in the private sector. This report follows a plethora of global research which showed that the private sector adaptation actions on a whole was still at the embryonic stages. For example in 2011 CERES released a report which showed that only 11 insurers in the US (13% of those surveyed) maintained formal climate change policies. Given the fact that the insurance industry shoulders a large percentage of weather-related risks the news it was no surprise that the results unsettled CERES and the National Association of Insurance Commissioners (NAIC).
Other key publications that were released by the World Economic Forum during the event include the Future Role of Civil Society, where participants recognised climate change as one of the six critical forces reshaping civil society out to 2030; the report on Sustainable Health Systems Visions, Strategies, Critical Uncertainties and Scenarios, which stated that increases in extreme weather was likely to be one of the top 20 drivers of change affecting the sustainability of health systems; the report titled Building Resilience in Supply Chains, which showed that concern about extreme weather and supply chains was increasing and was considered to be ranked second in the top five supply chain risks; and the Green Invetment Report which estimates that under a 2C scenario of global warming an additional US$700 billion in annual infrastructure investment was required between now and 2030 to "avoid dangerous levels of climate change and adverse environmental impacts" (p.12).