Davos 2023: Predictions for a world in “Polycrisis”

It’s been three years since world leaders, business icons and tech magnates could physically meet in the Swiss Alpine town of Davos for the World Economic Forum. Returning for the 53rd summit, what was the mood in the mountain air? More specifically, what indicators can we take from this latest attempt by leading global figures to hammer out workable solutions to the world’s biggest problems?

Positive points to puncture the “doom and gloom”

It’s impossible to ignore the very clear and present evidence that the battle against catastrophic climate change continues to be slow and hard-going. In fact, UN secretary general António Guterres went as far as saying in his address to the Davos crowd that he believes we are collectively losing ground:

“The battle to keep the 1.5-degree limit alive will be won or lost in this decade. On our watch. My friends, right now it is being lost.”

With several concerning global events, including rampant inflation in some parts of the world, and associated cost of living crises, there were plenty of gloomy predictions for the near future. However, several notable sources of positivity could be found in the speeches and whitepapers delivered by Davos attendees.

In a widely circulated joint report from the Grantham Research Institute and Systemiq, authors Nicholas Stern and Mattia Romani outlined how the next five years will see “more than half of the tipping points for green technologies being met”. The most crucial among them include the following:

  • Energy generation costs for solar and wind power will fall below that of new coal and gas in the US in 2023. Other major economies will quickly follow.
  • Cost parity of electric vehicles with diesel/petrol-driven vehicles across all ‘light vehicle’ market sectors will be achieved by 2025-2026.
  • AI will become a general-purpose technology – as ubiquitous as electricity or IT – within the next 5 years.

Such rapid progress will come at a cost, however. The Stern/Romani Report suggested that the world will need to collectively invest between $5-7 trillion every year, if this new wave of sustainable development is to be realised. Such investments will need to be maintained until 2030 at the earliest. Their thinking is that, by then, the dividends being reaped will offset the investment costs sufficiently while unlocking economic opportunities on an unprecedented scale

Innovation is the key to unlocking global solutions – Focus areas for Green Transition

In terms of analysing specific technologies and development trends, Davos is always an important showcase of things to come. This year was no different, with key predictions across a range of vital green sectors, and green trends in more traditional industries.

Artificial Intelligence: While there was less of an AI focus at Davos this year, its proponents still believe that it can quickly accelerate in versatility and scale to the point of ‘near-ubiquity’ in the coming years. Already, AI is proving vital in improving the accuracy and timeliness of climate disaster alert systems. Naturally, this will only become more important as the climate crisis deepens. Other crucial applications of AI, highlighted at Davos, include its ability to revolutionise farming at the micro, small and industrial levels. From crop yield analysis to weather prediction, efficient water use and pest control, the consensus is that AI is the key to unlocking long-term sustainability for world food supplies.

Blockchain: 2022 was a bruising year for cryptocurrency and associated crypto activities, but this has not diminished the potential of distributed ledger technology to make international partnerships easier and more productive. Speakers at Davos urged the industry to operate with greater transparency and clarity about how they operate, to better encourage investors and end users to embrace blockchain. Since the message at Davos this year was that international cooperation is essential to solving the world’s problems, blockchain continues to be a much-needed bridge-building tool, one with more proponents than ever.

Electric Vehicles: With so many leading economies vowing to phase out hydrocarbon-based vehicles by 2030-2035, the rise of the EV seems almost preordained. However, issues around supply chain resilience, charge point availability, and general affordability are still high on the agenda for solving before the next wave of global EV adoption can occur. At Davos this year, automotive industry leaders agreed that more cooperation is needed between manufacturers, distributors, tech providers and government players to achieve this. Many firmly predicted that the rise of EV and AV (autonomous vehicles) will go hand-in-hand as nations look to completely overhaul their road networks for a sustainable future.

Renewable Energy: The Global Risks Report 2023, produced at Davos this year, predicted that there will likely be a global recession in 2023. It also concluded that the recent energy crises highlight that energy security is now a key driver of renewable energy adoption, alongside environmental concerns. Talking specifics, the EU laid out its ‘Road to Net Zero’ plan, which will see the establishment of a massive sovereignty fund capable of accelerating renewable installations and supporting key industries with subsidies to help them decarbonise. As a sidenote, many welcomed the attitude of willingness demonstrated by big oil executives in attendance to be part of the ongoing solution to climate change.

Cooperation, not competition – new thinking for a new world

The theme for Davos 2023 was "Cooperation in a fragmented world". It’s a theme that was strongly represented throughout the proceedings, as one leader after another, whether they were from the world of tech, politics or business, urged their fellow decision-makers to embrace the power of collaborative effort.

From closer cooperation in creating global EV infrastructure, to the ‘joining of hands’ of the hydrocarbon and renewable ends of the energy industry, it’s clear that only major international and inter-industry collaboration will generate enough acceleration to steer us clear of the many global crises already in place. In fact, “polycrisis” became one of the main buzzwords of the event, prompting ever louder calls for a multi-pronged response, driven by mutual assistance, trust and a willingness to work together to overcome the greatest challenges of our time.