Global Risks and the Road Ahead:

A Foresight for Australia, New Zealand and Beyond
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by Adam Rangihana

Global Risks and the Road Ahead: A Foresight for Australia, New Zealand and Beyond

Global Risks and the Road Ahead:

A Foresight for Australia, New Zealand and Beyond

Humanity faces a broad spectrum of external threats that will shape the coming decades. From advanced technologies remaking war to unfolding environmental catastrophes, experts warn that these risks will compound social and economic stress. Drawing on the latest analyses by insurers (Lloyd’s, Munich Re, Swiss Re) and foresight bodies (WEF, IPCC, CSIRO, WHO), this report surveys major global dangers – especially as they pertain to Australia and New Zealand – and examines how they intersect with domestic challenges like aging populations, economic pressures and governance capacity. We find all risk categories are intensifying, even as geopolitical fragmentation makes collective action harder. Clear-eyed policy planning and resilience-building are urgently needed to navigate these converging threats.
Militarization of AI and Geopolitical Instability Experts caution that artificial intelligence is rapidly becoming a military tool – with profound security implications. Weaponized AI (from autonomous drones to automated decision systems) promises faster targeting and force projection, but also raises the danger of rapid escalation and accidents. As one United Nations University analysis notes, machine-driven weapons “can improve military capabilities … reducing danger to soldiers, but… raise concerns about escalation of conflicts, compromised systems, and an AI arms race”. Global risk analysts stress that integrating AI into warfare will shorten decision cycles and create new trigger points for inadvertent conflict. The World Economic Forum finds that even if AI-driven conflict risks are not seen as highest immediate threats, over the next decade “incentives to condense decision time through integration of AI will grow,” making accidental wars more likely. In other words, battlefield AI could make local skirmishes snowball faster than ever.
Key factors amplifying AI risks include the entry of new major players and opaque algorithms. Dozens of nations now pursue AI-augmented arsenals, and “deep fakes” or automated misinformation campaigns can destabilize democracies. The Fraunhofer Institute warns that AI-driven hack attacks and political influence tools are already evolving faster than legal norms. Without global standards, rival militaries may race to deploy autonomous weapons and cyber weapons in dangerous ways. An international consensus on “killer robots” has so far failed to emerge; indeed, US and China have begun arms-control talks only recently. In short, experts urge that AI in warfare is no longer science fiction but an urgent policy problem – one likely to shape the geopolitical order. For Australia and New Zealand, which rely on alliances and an open, rules-based order, any global AI arms race threatens to destabilize the region (through proxy conflicts or erosion of international law). Canberra and Wellington must therefore monitor these developments closely and invest in AI governance and defensive capabilities.
Frontier Technologies: Space Resources and Governance Emerging space technologies – particularly asteroid and lunar mining – offer tantalizing promise but also novel risks. The discovery of vast resources (water ice, rare metals) on the Moon and asteroids has spurred a new space race. NASA’s Artemis program and companies like SpaceX and Blue Origin aim to colonize and exploit space within a generation. If managed well, off-world mining could relieve terrestrial resource pressures. But without clear rules, space mining could spark conflict. A recent RAND commentary warns that “space mining is subject to relatively little existing policy or governance, despite potentially high stakes”. As lunar and asteroid claims increase, there is already competition: the US-backed Artemis Accords (more than 20 signatories) seek to codify mining rights and “safety zones” around sites. However, China and Russia have developed their own lunar initiatives and are not party to these accords, raising the specter of friction or even sabotage.
On the ground, legal and environmental uncertainties loom. Current space law (the 1967 Outer Space Treaty) prohibits national claims but is vague on commercial mining. Some nations (US, Luxembourg, UAE, Japan) have unilaterally granted mining rights to private firms, setting no global precedent. Without coordination, competing missions to the Moon or Mars could collide or create debris. Environmental questions also arise: while asteroids lack ecosystems, mining processes may generate space junk or even alter asteroid trajectories. Analysts note that returning raw materials to Earth will create new waste streams and carbon emissions (from rocket launches). The technology’s benefits – for example, supplying water for spacecraft fuel – are clear, but as the New Space Economy journal explains, “space mining would avoid many direct [Earth] impacts, but it raises new environmental concerns like space debris”.
Australia and New Zealand have vested interests in this domain. Australia is building a domestic space industry and has been invited into international lunar initiatives; New Zealand’s Rocket Lab has signalled interest in Moon missions. Any conflict over space resources (or accidents creating orbital debris) could threaten satellites and communications that underlie both economies. Policymakers should thus push for robust international frameworks (beyond Artemis) that include space sustainability and conflict-prevention clauses. In parallel, terrestrial mining impacts remain critical: notably, if space mining ever takes off commercially, it could shift global mineral markets, with ripple effects on Australian miners. Tracking and planning for these far-future scenarios – as well as ensuring space governance – will be vital for strategic foresight.
Pollution and Ecological Degradation Pollution is increasingly recognized not as a distant problem but an immediate hazard. The World Economic Forum’s 2025 survey of experts found that pollution (air, water, soil contaminants) surged to 6th place among severe risks in the next two years. This jump reflects visible crises: smog events, chemical spills, toxic plastics littering coasts. Long ignored as “green” issues, pollutants now undermine human health and economic resilience on a global scale. Air pollution alone is estimated by the World Bank to cost $8.1 trillion per year (6.1% of global GDP) in health and economic losses. That is roughly Australia’s entire annual GDP being lost worldwide to dirty air. Water pollution, plastics in the oceans, heavy metals, and persistent chemicals are similarly exacting tolls through disease, biodiversity collapse, and degraded resources.
In Australia and New Zealand, the situation is striking. Both countries cherish clean environments but face serious local pollution issues. In New Zealand, for example, government assessments find that “most lakes in farming and urban areas are polluted” by nutrient runoff. Over 70% of lakes downstream from agriculture are now in “poor or very poor” ecological health due to algal blooms. Rivers in farming zones often exceed safe nutrient levels as well. Similarly, Australia’s coastal waters suffer from agricultural runoff and industrial discharges: the Great Barrier Reef has been repeatedly stressed by sediment, fertilizer and pesticide entering via rivers. The Reef Foundation warns that “increasing sediment, nutrients and contaminants”, along with warming waters, are causing coral die-offs. Reefs and coastal fisheries are directly impacted, threatening tourism and fisheries industries. Both nations also face urban air-quality challenges (smog and wildfire smoke), and microplastic pollution of waterways.
These ecological blows compound each other: polluted ecosystems lose resilience to other shocks (e.g. a coral reef weakened by poor water quality is more vulnerable to bleaching). As one WEF expert notes, pollution’s impacts are “far-reaching and enduring” – eroding public health, natural capital and economic stability both now and decades into the future. Crucially, insurers see pollution as under-addressed: a Zurich report points out a mismatch between public concern and private-sector risk ranking on pollution. While governments list pollution among top-ten long-term threats, many businesses still treat it as a background issue.
Mitigating pollution requires both tech fixes (clean energy, waste treatment) and tighter regulation (e.g. emissions limits, plastic bans). Australia and NZ have taken some steps: stricter water-quality standards, initiatives like Australia’s Reef Trust (investing in river cleanup), or NZ’s zero-emission target for certain toxic substances. But experts warn that far bolder measures are needed now, not later. Immediate actions (e.g. cutting coal plants, curbing bushfire smoke, enforcing farm run-off controls) must be coupled with long-term ecosystem restoration. Otherwise, the degradation will feed into health crises (from air and waterborne diseases) and economic losses that are hard to insure.
Pandemic and Biosecurity Threats The COVID-19 pandemic reawakened the world to the ever-present danger of novel pathogens. Even after COVID, experts agree another outbreak is “not if, but when.” Factors like urbanization, global travel, climate-driven animal migration, and antimicrobial resistance all raise pandemic risk. Life insurers and reinsurers have taken note: Swiss Re, for example, developed its first probabilistic pandemic model after SARS (2003) and has continuously updated it post-COVID. Lloyd’s, in partnership with the Cambridge Centre for Risk Studies, modelled a hypothetical future human pandemic and found it could cost up to $41.7 trillion (in GDP lost over five years in an extreme scenario), with a probability-weighted economic loss around $13.6 trillion. In expected terms, Lloyd’s puts the annualized global economic loss at about $396 billion per year.
These figures remind us pandemics are systemic risks: low probability but enormously high impact. Underwriting realities reflect this. The insurance industry has responded by creating new products (e.g. pandemic business-interruption policies, vaccine distribution coverage) and building risk pools. Lloyd’s even worked with governments to insure live events against cancellation during outbreaks. Nevertheless, models emphasize preparedness: Swiss Re notes that complacency after COVID would be dangerous. Every new outbreak (e.g. recent mpox resurgence) has led insurers to stress-test and refine their models.
For Australia and NZ, the lessons of COVID still resonate. The geographic isolation of Australasia bought time during the first waves, but dense city networks and aged care facilities were hit hard. Both countries now monitor outbreaks globally (through the WHO’s International Health Regulations and domestic agencies) and invest in surge capacity. Yet new risks keep emerging: climate change is expanding mosquito habitats (e.g. dengue concerns in northern Australia), and deforestation in Asia-Pacific is a source of zoonoses. The World Health Organization warns that the virus threat remains “high” globally and highlights the need for robust surveillance and vaccination infrastructure. In short, pandemics remain a clear and present danger – one that compounds with climate and migration challenges. Policy implications include strengthening health systems, international data-sharing, and perhaps insurance-backed contingency funds (as Lloyd’s proposes). The goal must be not only reactive claims-handling, but proactive outbreak prevention.
Climate Change and Cascading Effects Climate change is already transforming the world, and its future impacts will be profound. According to the IPCC, every region will experience more extreme heat, intense storms and shifting rainfall patterns under high-emission scenarios. For Australia and New Zealand, the trend is unmistakable. CSIRO reports that 2023 was Australia’s warmest year on record, in line with a global trend. The continent has seen more and longer heatwaves, higher wildfire danger and heavier rainfall events. Indeed, CSIRO’s latest State of the Climate report warns that “Australia’s weather and climate has continued to change, with an increase in extreme heat events, longer fire seasons, more intense heavy rainfall, and sea level rise”. This impacts health (heat stress deaths), infrastructure (damaged roads and power lines), and economy (agriculture yields). Moreover, rising seas are already encroaching on Australia’s coasts and New Zealand’s low-lying communities; CSIRO bluntly states that “Australia must plan for and adapt to the changing nature of climate risk now for future generations”.
The ecological consequences are cascading. The Great Barrier Reef has endured five mass coral bleaching events since 2016, the most recent driven by record marine heat waves. Warmer, more acidic oceans have led to widespread reef die-off – jeopardizing tourism, fisheries and shoreline protection. New Zealand’s unique ecosystems are also under strain: alpine glaciers are shrinking, and native species face habitat shifts. Globally, biodiversity is in steep decline due to habitat loss and warming. Experts warn that climate and nature are interlinked crises: melting ice accelerates warming, dying forests release carbon, and lost pollinators threaten food supplies.
Insurers quantify the climate challenge in stark terms. Munich Re reports that 2024 was one of the costliest years on record for natural disasters: $320 billion in total losses worldwide (an inflation-adjusted record) and $140 billion insured. About 93% of that was weather-related (storms, floods, wildfires) – not tectonic quakes. For context, those losses exceed several countries’ GDPs. Major hurricanes and floods dominated, but even “non-peak” perils (thunderstorms, heat waves) are driving a rising trend. In fact, Munich Re projects that if warming continues, “severe weather catastrophes” will become increasingly frequent and deadly. Such calamities stress economies and governance: crop failures from droughts hit food prices, mass migrations can spark social unrest, and insurers may retreat from risky markets without adaptation.
Australia and NZ are not insulated. Australia has already seen record bushfire losses (2019–21 fires caused tens of billions in damage) and extreme floods. Infrastructure – from highways to power grids – will require overhaul to cope with hotter, wetter conditions. Insurance premiums have climbed in flood-prone areas, and some insurers now mandate home retrofits or refuse coverage. Coastal cities (Sydney, Melbourne, Auckland) face chronic inundation risk; studies suggest sea levels could rise 0.5–1.0 meters by 2100 under high emissions, threatening housing and ports. Heatwaves will strain the health system, especially for aged and remote communities. Economically, these changes threaten Australia’s agricultural and resource exports (e.g. reduced water for irrigation, damage to livestock) as well as tourism (Coral Reef, ski resorts). In sum, climate change is a “threat multiplier” that will intensify all other risks – from fire and flood to disease vectors.
Policy responses must be twofold: aggressively cut greenhouse emissions to limit future warming, and massively increase resilience to changes already locked in. Both governments have set net-zero goals by 2050, and carbon reduction policies (renewables, EVs, reforestation) are underway. But analysts warn of a huge “adaptation gap”: cities need better drainage, fire preparedness, and emergency planning. For example, New Zealand’s earthquake standards now double as tsunami guidelines, and Australia is investing in desalination and fire breaks. Continued investment in climate science (e.g. CSIRO modeling) will guide where to build or retreat. Critically, coordination is needed: as the WEF notes, dealing with climate requires global cooperation, from sharing flood-risk data to financing low-carbon transition.
Geological Threats: Volcanoes and Earthquakes Less frequent but catastrophic, geological events represent existential risks with global knock-on effects. Super-volcano eruptions (like Yellowstone or NZ’s Taupō) could eject enough ash to cool the planet and collapse food supplies. Mega-earthquakes and tsunamis – already familiar to NZ – can devastate coasts and disrupt economies. Insurance scenario studies underscore these dangers. Lloyd’s simulated a major volcanic eruption (modelled on events like Pinatubo 1991) and found it could slash global GDP by an average of $1.6 trillion over five years. Even accounting for low probability, they estimate an “expected loss” of about $14 billion (per year) once probabilities are included. That is roughly Australia’s yearly federal budget spent on a single volcanic shock. While such a big eruption is extremely rare, the analysis stresses that complacency is dangerous: supply chains could shudder (e.g. from shipping disruptions), crops would fail (volcanic winter), and global tensions might flare as states scramble for stability. In Lloyd’s words, “any lack of attentiveness … could leave populations unprepared for the immediate and persistent fallout caused by eruptions”.
Seismic risk also looms. New Zealand sits on multiple active faults. The 2011 Christchurch quake (Mw 6.3) caused ~200 deaths and NZ$40B in damage; a larger Alpine Fault quake (likely in coming decades) could have even more severe effects. Australia is less tectonic but not immune – major quakes (e.g. Newcastle 1989) have occurred near populated areas. Additionally, submarine earthquakes can generate tsunamis: the 2011 Tōhoku quake (Japan) sent waves around the Pacific, including to NZ and Aus. Insurance models often include “geophysical risks” in a worst-case portfolio because while low in probability, a big event is economically ruinous.
For Australasia, geological hazards demand prepared infrastructure. New Zealand’s building codes are already among the world’s strictest and it has nationwide warning systems. Australia has mapped its earthquake zones and is retrofitting dams and bridges. But the unpredictability of a large quake or supervolcano means governments must keep contingency reserves, disaster-response forces, and global support networks ready. It’s worth noting that such an event would not only cause local destruction but also ripple into the global economy (through commodity prices, shipping disruptions, and even climate). Thus, resilience planning and insurance (both public and private catastrophe pools) are key.
Intersecting Demographic, Economic and Institutional StressorsAll these external dangers compound underlying domestic trends. In Australia and New Zealand, aging populations, urbanization, inequality and constrained fiscal margins amplify vulnerabilities. For example, both countries are approaching “super-aging” status: over 20% of the population will be 65+ in coming decades. An older population means higher health care needs (sharply increased by pandemics or heatwaves) and tighter pension budgets. It also means fewer working-age people to rebuild after disasters or invest in new infrastructure. The WEF highlights that demographic divergence (declining fertility in wealthy nations, youthful bulges in emerging ones) will be a defining trend. For Australia/NZ, longer lifespans and slower birth rates create labour shortages and strain social services. Climate-change adaptation and biosecurity efforts will thus have to be achieved with smaller workforces or else rely on immigration (which itself can become contentious under stress).
Economically, both countries are export-oriented, reliant on tourism, agriculture and minerals. This brings wealth but also exposure. A global pandemic or trade war can puncture tourism instantly (as COVID taught us), while climate impacts overseas (e.g. droughts in Asia) can disrupt export markets. So external shocks reverberate through local jobs and communities. At home, income inequality and regional disparities could worsen if disasters strike poor areas hardest. The insurance market already shows “protection gaps” – for instance, many rural homes in Australia lack flood insurance because premiums became unaffordable.
Institutionally, the rise of great-power rivalry and populism makes collective risk management harder. Australia and New Zealand have strong governance, but they cannot insulate themselves fully. Fragmented geopolitics (which 64% of experts expect to persist) can undermine coordinated action on climate treaties, pandemic agreements or AI arms control. Mistrust can slow down everything from vaccine sharing to climate-finance transfers. Both countries will need to navigate between major powers (US, China) carefully and invest in regional cooperation (e.g. Pacific health networks, ASEAN climate forums) to bolster resilience.
Finally, technological and cultural change must be managed. As AI and biotech evolve, regulatory capacity will be tested. Australia’s recent AI Safety Summit was a step toward governance. But technology is moving fast. Likewise, resource competition (in space or Earth’s seabed) will test international law. The policy lesson is that long-term thinking must replace short-term crisis response. Insurers and futurists alike urge shifting from reactive recovery to proactive preparation. In practice, this means enhancing scientific monitoring (for virus spillovers, ecosystem health, volcanic activity) and building flexible institutions that can respond to multi-headed threats.
Conclusion: Building a Resilient Future The future will be defined by how well we anticipate and prepare for systemic risks. As insurers like Lloyd’s emphasize, coverage and capital are only part of the solution: “insurance is more than a financial safeguard; it is a critical enabler of societal resilience”. Likewise, bodies like WHO, IPCC and WEF stress that coordination – global and local – is essential. For Australia and New Zealand, this means seizing the opportunity to invest in resilience today. Whether it is modernizing infrastructure, funding health and climate adaptation, or engaging in international rule-making on AI and space, proactive measures will pay dividends. The cost of inaction is stark: rising death tolls from pollution and heat, economic losses from disasters, and strategic disadvantage in a more dangerous world.
In sum, the threats are interconnected and compounding. Each headline risk – AI warfare, pandemics, climate, etc. – will exacerbate and be exacerbated by others. Strategic foresight is crucial: by monitoring expert forecasts (IPCC, WEF reports), using actuarial metrics (Lloyd’s pandemic and catastrophe scenarios, Munich Re loss data), and learning from near-miss events, policymakers can target weak points in the system. The challenge is immense, but the alternative – surprise and crisis – is unaffordable. The insurance and risk research community reminds us that we must “transform risks together”, building capacity to withstand and adapt. For Australia, New Zealand and the world, the time to act is now.
Sources: Authoritative reports and analyses on global risk (WEF Global Risks 2025; IPCC climate data; WHO and Swiss Re on pandemics; Lloyd’s and Munich Re scenario studies) and regional science agencies (CSIRO on climate, NZ environment reports, GBR studies). All facts and figures above are drawn from these expert sources.

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