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World Economic Forum: Global Risks Are Outpacing Ability to Mitigate Them

Likelihood of core global risks vs. projected economic loss. Click to enlarge.

The World Economic Forum—the organization that convenes the annual Davos meeting of global leaders—has released the Global Risks 2007 report. The report, published in cooperation with Citigroup, Marsh & McLennan Companies, Swiss Re and the Wharton School Risk Center, highlights a growing disconnect between the power of global risks to cause major systemic disruption and our ability to mitigate them.

Many of the 23 core global risks explored in the report have worsened over the last 12 months, despite growing awareness of their potential impacts, according to the report. In addition to specific risk mitigation measures, institutional innovations may be needed to create effective responses to a complex risk landscape.

The report suggests two such innovations—the appointment of Country Risk Officers and the creation of flexible coalitions around specific global risk issues, providing crucial momentum to mitigation efforts. The first would provide a focal point in government for mitigating global risks across departments, learning from private-sector approaches and escaping a silo-based approach. The second would allow mitigation strategies to emerge from dynamic interplay between governments and business, achieving a balance between inclusiveness and decisiveness.

The core risks fall into five primary categories:

  • Economic

    • Oil price shock/energy supply interruptions
    • US current account deficit/fall in US$
    • Chinese economic hard landing
    • Fiscal crises caused by demographic shift
    • Blow up in asset prices/excessive indebtedness
  • Environmental

    • Climate change
    • Loss of freshwater services
    • Natural catastrophe: Tropical storms
    • Natural catastrophe: Earthquakes
    • Natural catastrophe: Inland flooding
  • Geopolitical

    • International terrorism
    • Proliferation of weapons of mass destruction (WMD)
    • Interstate and civil wars
    • Failed and failing states
    • Transnational crime and corruption
    • Retrenchment from globalization
    • Middle East instability
  • Societal

    • Pandemics
    • Infectious diseases in the developing world
    • Chronic disease in the developed world
    • Liability regimes
  • Technological

    • Breakdown of critical information infrastructure (CII)
    • Emergence of risks associated with nanotechnology

The report recommends a number of key needs for addressing specific global risks, including:

  • Linking energy security with considerations on climate change.

  • Urgently beginning work on a successor to the Kyoto agreement with three central principles:

    • Involvement of the United States and major developing countries (particularly China and India);
    • Differential responsibilities for future emissions’ reduction dependent upon past emissions and stage of economic development; and,
    • Common overall responsibility for climate change.
  • Renewing terrorism insurance schemes scheduled to sunset in 2007 in some form.

  • Improve framework for public-private arrangements in other countries.

  • In order to prepare for a pandemic, governments should increase research into the identification of critical choke-points in the supply/value chain where skill sets are rare, interdependencies are greatest and the risk of triggering systemic failure is highest.

The topics identified in the report will be at the core of the agenda for the annual meeting of the World Economic Forum taking place later this month in Davos, Switzerland.



fyi CO2

Petroleum based ice cream now on sale!


Global population will peak much, much below our ability to feed everybody. The only reason people are now going hungry is that they are poor. Raising the cost of food would actually help more of them eat.

Bruno Cipolla

you say: "To this list, I would add overfishing, deforestation, species migration, biotechnology risk, energy inefficiency, wealth concentration, animal farming and overpopulation. What have I left out?"

You left out the huge increase in the average human stupidity....


The ice cream analogy had to be one of the oddest posts I have seen on here yet. Good work!

Herb Sewl

I live in Arizona. We like to take our Jeeps out to the desert and 4-wheel. Does anyone think they could make an electric jeep?


Hehehe...takes a bow;/

For some reason people use the word oddest around me alot..

Oh dont forget this report is of course based on the worries of people with MONEY and investments and such and of course assets and such are something they worry about alot.

If you asked 500 middle income people what they worried about...yes the home becoming worth less then the morgage and in fact less then the taxes is something on the list but alot of other things would also be up here too.

Stuff like when will I have to get a NEW car instead of the used ones I normaly get because the fuels change or regulations change and I cant afford to use my old car? How will I afford that change? Can I afford to stay near longdon or whatever city as they gut my pocketbook and I have no oney to buy a damn new car... What do I do if my house is old and I have no money to upgrade it and some jackarse in congress whacks me with a tax or punts my ultility bill through the roof? Or who will mke a damn fuel eff car that wont also require daily visits to the chiropractor? Or if the city wants me to commute les why the bleep did they put they put the office buldings so damn far from the homes?

Or for that matter why are congresscritters so eager to get me into a smaller car when they drive behemoths and fly in personal gets?

Or as my neighbor put it.. a dear sweet mother of 3. If they want me in a small car get the bleeping trucks off my bleeping road you bleeping bleepedity bleep bleeps or ill.......... man she was worked up and ready to guy a congresman with her teeth if need be...

In short get the damn 18 wheelers off the roads we HAVE to drive because some asshat in congress didnt keep the roads sperate.

Red Manner

"You left out the huge increase in the average human stupidity...."

Can you feel the love tonight?


"You left out the huge increase in the average human stupidity" I must be stupid because that statement makes no sense grammatically or logically

Jeff G.

For those interested in how new political developments are affecting the world of green automobiles, check out the Green Machines Road Trip ( It follows the story of a team of green bloggers that travel from Minnesota to Michigan writing about how fuel-efficient vehicles have been and will continue to transform America’s heartland. Also, provides links to commentary on the politics of green machines (


Cars running on water are the trend of the future. This seems a lot better than ethanol or electric hybrids.


A commune is where people join together to share their lack of wealth.
-- R. Stallman



I'm new here, just wanted to say hello and introduce myself.


I do not believe this

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