Davos Dials in on Evolving Global Risks and Responses

The World Economic Forum Annual Meeting in Davos, Switzerland, is a convenient punching bag for those who view its participants as part of the problem rather than the solution. But this year’s meeting offered some important information on the re-ordering of global threats, the rising challenge of climate change, and the incremental crawl toward corporate environmental, social and good governance (ESG) objectives. While these may seem widely separated issues, they are in fact, very interrelated.

At the top of the long-term concerns in the new Global Risks Report is “climate action failure” followed by “weapons of mass destruction”. Also prominent in the top 10 list of likely risks, was the failure of global governance. Those three themes – climate, WMD, and governance – are the nucleus of the modern global challenge. They must be tackled jointly and comprehensively.

The challenges posed by climate change was a major theme in Davos and there were a number of high profile and highly critical presentations on what the Secretary-General of the United Nations, Antonio Guterres, titled the climate war.

But Davos’ emotional climate crisis rhetoric engendered a response that sought to refocus the fight on realistic pathways to achieve greenhouse gas reductions. One Washington Post column made the important point that “energy consumption is not a compartment of modern life; it is modern life...[and that] serious plans for the energy future must take the modern world into account.” It noted that all “high yield” sources of energy must be pursued, including, “new and better nuclear reactors” and carbon capture and storage.

An essay in the Wall Street Journal, urged readers to “Ignore the Fake Climate Debate” that is driven by deniers and alarmists. It made the valuable point that economic growth is an important component of reducing energy consumption because it decreases poverty and drives technologies that can replace carbon intensive energy use. This includes replacing coal with natural gas, and expanding wind and solar power, and nuclear energy.

The role of nuclear energy in addressing climate change is clearly controversial despite the continued confirmation of its zero-carbon importance by the U.N. Intergovernmental Panel on Climate Change (IPCC) and many international experts. As the Post piece notes, should we “assume that Chernobyl and Fukushima are the best that we can do,” because the “nuclear plants of tomorrow” may offer advantages over existing technology.

The nuclear technology of the 2050s will not be the same as that which originated in the 1950s. But the expansion of nuclear energy, and particularly its introduction to new nations and regions, raises global security challenges. If misused or under-policed there is the potential for nuclear weapons proliferation.

This threat of, “two simultaneous dangers - nuclear war and climate change,” are primary reasons why the Bulletin of the Atomic Scientists Doomsday Clock was pushed to 100 seconds from midnight, a decrease of 20 seconds over just the last year. As the Bulletin board notes, the intensifying of dangers is a response to “world leaders that have allowed the international political structure for managing them to erode.”

But government is not the only answer to these global threats. The private sector also has a responsibility to strengthen the systems required to address existential dangers. At the 2017 Annual Meeting in Davos, its International Business Council issued a “Compact for Responsive and Responsible Leadership” that states, “society is best served by corporations that have aligned their goals to the long-term goals of society.” This objective was furthered at the 2020 meeting by a new report that proposes a, “common, core set of metrics and recommended disclosures” that will allow the public to assess whether the corporate sector is living up to its ESG promises.

The private sector’s full effects remain to be seen, but in advance of the Davos meeting, Microsoft announced that it will be carbon negative in its operations by 2030 and launched a $1 billion climate innovation fund that will “accelerate the global development of carbon reduction, capture and renewal technologies.” This is in addition to the substantial resources Microsoft co-founder, Bill Gates, is putting into his next generation nuclear reactor. This announcement was complemented by the announcement by BlackRock’s CEO that “[c]limate change has become a defining factor” in its investment business and that “Governments and the private sector must work together to pursue an [energy] transition that is fair and just.”

The yearly Davos meeting is often portrayed as a contrived concert of virtue signaling that evaporates with wheels up at weeks end. But when focusing in on the real signals and less on the noise it becomes clear that there is a growing recognition that the global environment and its challenges are evolving and that the responses to them must be transformed.

There are realistic and effective responses to the climate and nuclear challenges that the world is facing. And it is encouraging that the private sector is willing to work with governments to develop them. But a third and necessary leg of this triangle is civil society. Its organizations and experts can cling to old battle lines that are worn and comfortable but are no longer defensible. Sanctimony won’t solve any of the new global challenges. The private sector, governments, and civil society need to find their fulcrum of consensus and forge a collective response. This is the challenge Davos should take on next year.

Ken Luongo, President, Partnership for Global Security