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Monday, July 15, 2024

Cost-of-living crisis overshadows climate at Davos

In a report released Wednesday, the World Economic Forum highlighted climate change as the most pressing long-term challenge facing the global economy. However, the report noted that the world is ill-prepared to address this issue due to immediate concerns, particularly the cost-of-living crisis.
The Global Risks Report, unveiled ahead of the World Economic Forum’s annual gathering in Davos, paints a grim picture of the future. Based on a survey of 1,200 risk experts, industry leaders, and policymakers, the report identifies environmental issues as paramount for the next decade. Yet, it laments that more pressing matters are diverting attention away from climate action.
The report underscores the need for governments to navigate complex trade-offs between societal, environmental, and security concerns. Despite climate change ranking as one of the most severe short-term threats, the world appears least equipped to address it effectively.
Respondents identified climate-related challenges as dominating the top long-term risks, including failure to mitigate climate change, natural disasters, biodiversity loss, and ecosystem collapse.
Short-term crises are exacerbating efforts to achieve net-zero emissions, revealing a gap between scientific necessity and political feasibility. The report emphasizes the urgency of balancing short-term and long-term risk outlooks.
Carolina Klint, a risk management leader at Marsh, stressed the importance of making decisions now, even if they seem costly upfront, to address long-term challenges effectively. This includes significant investments in transitioning from fossil fuels to sustainable energy sources.
The report also highlights the immediate challenge of a cost-of-living crisis, exacerbated by the COVID-19 pandemic and geopolitical tensions. Soaring food and energy prices are straining household finances worldwide, posing significant challenges over the next two years.

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