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War, environment, politics among top global risks: World Economic Forum

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A mix of geopolitical and environmental issues dominates a new ranking of global risks released by the World Economic Forum on Thursday.

The World Economic Forum Global Risks 2015 report is based on an annual survey of global risk professionals in business and academia and ranks risks according to both likelihood and potential impact.

According to the survey, the top five likeliest risks are: interstate conflict with regional consequences, extreme weather events, failure of national governance, state collapse or crisis, and high structural unemployment or underemployment.

Reducing the likelihood of interstate conflict should be a top priority for world leaders, said Margareta Drzeniek-Hanouz, lead economist for the World Economic Forum.

“Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states,” Ms. Drzeniek-Hanouz said in a statement. “However, today the means to wage such conflict, whether through cyberattack, competition for resources or sanctions and other economic tools, is broader than ever.”

Environmental and societal risks were among the top five global risks in terms of impact, with water crises, the spread of infectious diseases, weapons of mass destruction and interstate conflict with regional consequences and failure of climate-change adaptation taking the top five rankings.

The report finds that current risk management approaches are insufficient to tackle the threats posed by environmental change to social, political and economic security.

“The nexus of food, water, energy and climate change has been identified by the U.S. National Intelligence Council as one of four overarching mega trends that will shape the world in 2030,” the report states. “Even though all of these risks are well-known, governments and businesses often remain woefully underprepared, as illustrated by respondents' perceptions that relatively little progress has been made on these risks in the last decade. At the heart of the problem is a risk management approach based on responsive measures that assume things go back to normal after a crisis — an approach that falls short with complex or slowly evolving environmental risks such as climate change.”

In addition to academic advisers from the University of Oxford, the National University of Singapore and the University of Pennsylvania, Marsh & McLennan Cos. Inc. and Zurich Insurance Group Ltd. collaborated with the WEF on the report.