The climate change crisis may be a global problem, but for India there may also be a cost of living crisis emerging, according to a report released by the World Economic Forum titled “Global Risks Report 2023”, earlier this week.
Digital inequality and a cost of living crisis coupled with natural disasters are going to be major risks in the short as well as medium term for India, the report noted.
The findings of the report couldn’t have come at a more opportune time, as a land subsidence crisis has hit Joshimath town in Uttarakhand.
In the next two years, the cost of living crisis is going to be one of the biggest risks, it said.
Also, natural disasters and extreme weather events, geo-economic confrontations, failure to mitigate climate change and large-scale environmental damage incidents, are some of the other short term risks for India, the report noted.
At the same time, on a long term basis, i.e. 10 years down the line, some major risks for India include failure to mitigate climate change and climate change adaptation, biodiversity loss, large-scale involuntary migration, and natural resources crises.
“As 2023 begins, the world is facing a set of risks that feel both wholly new and eerily familiar. We have seen a return of “older” risks — inflation, cost-of-living crisis, trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical confrontation and the spectre of nuclear warfare — which few of this generation’s business leaders and public policy makers have experienced,” the report said.
It noted that these risks would be amplified by aspects like unsustainable levels of debt, a new era of low growth, low global investment and de-globalisation, a decline in human development after decades of progress, rapid and unconstrained development of dual-use (civilian and military) technologies.
The report said that geopolitical rivalries and inward-looking stances will heighten economic constraints and further exacerbate both short- and long-term risks.
Climate change is among the major risks that the global economy faces, and it is the challenge for which humanity is least prepared, the report stated.
“Nature loss and climate change are intrinsically interlinked — a failure in one sphere will cascade into the other. Without significant policy change or investment, the interplay between climate change impacts, biodiversity loss, food security and natural resource consumption will accelerate ecosystem collapse, threaten food supplies and livelihoods in climate-vulnerable economies, amplify the impacts of natural disasters, and limit further progress on climate mitigation,” it said.