The risks that were identified and highlighted in this report are those that could have a major effect on society and economic development. These include environmental risk, demographic risk, resource risk, financial risk, information risk, organizational risk and political risk. Each of these categories can be considered individually or collectively. In a recent study of how risk affects the economy, Dr. Paret and Dr. Stirling of Manchester Metropolitan University highlighted the importance of combining economic risk with social risk. The risks presented here have been described as being ‘non-curable’ in nature and therefore do not respond to traditional methods of controlling risk.
The ARM is an economic and financial system which represents the future risks that could impact the global economy and its ability to service loans and debt. This study has taken these risks into consideration by comparing the risks associated with a future scenario with those associated with an existing one.
In their assessment, the researchers have described three main factors that affect risk and that are relevant in all cases: risk appetite, uncertainty and policy uncertainty. The risk appetite is the amount of risk that individuals are willing to take on themselves, which is determined by their current investment portfolio. The uncertainty refers to the degree to which the risk is understood, how much impact it will have and what the probability of the risk is. The policy uncertainty refers to the policies of governments around the world, including regulatory constraints and policies, and the effects that these policies have on economic activity.
One of the major risks in an evolving world is the climate change risk. This involves the long term changes that are taking place in the environment that will impact on the Earth’s climate in terms of temperature, precipitation and weather patterns. It includes the effects of greenhouse gas emissions, the effects of land use and ocean acidification, and the effects of other natural disasters, all of which can cause major disruption and upheaval in the Earth’s natural systems. In addition, it includes the impact of the depletion of the Earth’s natural resources, especially fossil fuels.
There are also risks in the ARM, which have been discussed here, including the risk of nuclear proliferation. or the proliferation of nuclear weapons. The increasing number of nuclear weapons is thought to have a direct impact on the security of the world, because they are used to produce weapons and can be used for political, economic or military purposes. Also, the potential risk posed by nuclear weapons proliferation means that the global supply of energy will be affected.
On the other hand, the third category includes social risk. This relates to issues that are related to how people will act and interact within the society, the environment and the economy in general. These include health risks such as disease outbreaks, the risks of pandemics, the risks of nuclear waste disposal, and the impact on the environment and on the human mind.
There are many other risks in an evolving world that are considered in this report. The full list of the main risks that were assessed is available for review, and you can find more information about them from the link below. The links also contain further detailed information on how these risks relate to the other categories.