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According to leading economists, a sustained collapse in the price of oil will have a ‘severe’ financial impact on the producing countries of the world, curtail investment in new energy sources and potentially have a negative effect on the environment.

Indeed, the benefit to consumers from cheaper transport could be overshadowed by a reversal in measures to reduce greenhouse gas emissions, as fuel conservation methods are discarded and alternative energy sources become comparatively more expensive to develop.

The ‘good news-bad news’ impact of oil prices was a postscript to the World Economic Forum’s (WEF) tenth edition of its Global Risks report, which was compiled before the commodity had plunged by 60% to under $50 a barrel.

Notwithstanding the risk from oil becoming too cheap, a perception survey carried out by the WEF with 900 experts on various sectors concluded that the biggest threat to the stability of the world in the next 10 years will come from the renewed risk of international conflict and the regional consequences that inevitably follow, such as the Ukraine crisis.

Ahead of its annual meeting in Davos next week, the not-for-profit foundation, whose mission is to improve the state of the world through public-private co-operation, published its 2015 report yesterday and explained its findings at a press conference held at the Bloomberg HQ in London.

According to WEF managing director Espen Barth Eide, the ghosts of the Cold War are returning in new forms of conflict, including the competition for resources, cyber attacks, and sanctions and other economic tools.

For example, innovative new technology is viewed as critical to global prosperity, but has also created new risks in the form of a ten-fold increase in the number of cyber attacks over the past decade.

This was a point emphasised by panellist John Drzik, president of global risk at WEF strategic partner Marsh & McLennan, who argued that much more needed to be done by businesses to combat the growing threat from increasingly sophisticated cyber attacks on society and on every link of the supply chain.

Mr Eide, a former minister of defence in the Norwegian government, believed governments must co-operate to beat the threat of cyber attacks – noting that, in his experience, states had “a better capacity for destruction than defence” when faced with a cyber threat.

Meanwhile, the WEF suggested the world was in the midst of a major transition from predominately rural to urban living, with more than 50% of the world’s population now in cities, which is expected to increase to 60% by 2050. However, within these inflated city communities, 40% of people now live in slums.

With 80% of the world’s GDP generated in cities, the WEF argues that if it is well managed the concentration in city dwelling will help to “incubate innovation and drive economic growth”. But the world’s ability to address a range of global risks – including climate change, pandemics and social unrest – by good governance is of paramount importance.

According to the WEF poll the second, third and fourth top global risks in terms of likelihood were extreme weather events, failure of national governance, and state collapse or crisis respectively.

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