Navigating 2024: The Riskiest Year in Decades?

Recent years have been described as permacrisis. Even the early days of 2024 are demonstrating that this year will be as disruptive and potentially the most disruptive in decades.

As a result, it is more important than ever that the infrastructure that supports our critical business activities are rock solid to ensure any impacts are minimised.

This is a brief look at some of the key risks that anyone planning infrastructure or business resilience should be keeping on their near horizon.

Geopolitical Instability:

2024 is set for several hugely important elections – notably in the US and Taiwan.

• Taiwan – In this New Year address, Ji Xinping stated China’s “reunification” with Taiwan is inevitable. China’s Taiwan Affairs Office has framed this elections as a choice between “peace and war, prosperity and decline.” No side wants conflict due to the huge impact on supply chains and global economic prosperity. However, tensions are as high as they have ever been.
• US – On November 5th: General Election Day, voters across the USA will cast their ballots for the president, vice president, all members of the House of Representatives and one-third of the Senate. There is a real chance that President Trump will once again be POTUS. His reticence to get involved in global politics, his stance on and disengagement from multi-lateral agreements such as the Trans-Pacific Partnership trade agreement and talk of leaving NATO and the UN could all increase global risk and disruption should he regain office.

US Power Risks:

After extensive analysis, the North American Electric Reliability Corporation (NERC) published their paper on Long Term Reliability of the electricity power delivery mid-December. The results were concerning for great swathes of North America both short and long term. The greatest risks for 2024 are in Texas, Central States and New England. Those organisations with key offices, sites or staff in these regions should prepare for this eventuality. You can see the report here.

War and Terrorism:

The potential global risks associated with the ongoing conflict in Gaza, escalating tensions in the Red Sea, and the threat of invasion of Taiwan by China in 2024 all add to the existing disruptions from the war in Ukraine. The impacts are multifaceted and significant:

• Conflict in Gaza: The prolonged conflict in Gaza not only impacts the immediate region but also has wider implications. The conflict has already exacerbated tensions in the Middle East and will influence global political dynamics. While the direct economic impact might be more regionally confined, the indirect effects, such as shifts in international relations and a potential rise in associated terrorism in countries linked to the conflict, have broader consequences.
• Red Sea Tensions: The increasing hostilities in the Red Sea, particularly involving the Houthi rebels targeting “Israel-related” ships, pose a direct threat to one of the key maritime trade routes. This area is vital for global shipping and trade, with a significant portion of the world’s goods, including oil, passing through. Disruptions here can lead to substantial economic repercussions globally, affecting supply chains and trade flows. The formation of a multinational coalition to safeguard shipping in this region underlines the seriousness of this threat. It is also a potential flashpoint for wider regional conflict.
• Ukraine: The war in Ukraine has had a profound impact on the global energy markets, and these effects are likely to persist into 2024. The European Union has been actively working towards reducing its dependence on Russian gas, aiming to decrease it by nearly two-thirds. Efforts include increasing liquefied natural gas (LNG) imports from the United States and Qatar, and expanding regasification capacity in countries like Germany and Italy. However, the infrastructure required for accessing alternative energy sources is not yet fully established, which continues to pose challenges. Europe remains dependent on imports for over 50% of its daily energy needs, contributing to rising energy costs and influencing inflation and the economic downturn​.

Cybersecurity Threats:

The potential for cyber-attacks on US and European infrastructure is a pressing concern for 2024, especially given the sophisticated nature of threats that can exploit vulnerabilities in critical systems. In the United States, despite the efforts to strengthen cyber defences through initiatives like the Biden-Harris administration’s executive order to improve software supply chain security, experts indicate that critical infrastructure remains susceptible to cyberattacks.

In Europe, the energy sector, a critical part of the economy, is a key target for cyber threats, with concerns about the potential for massive and destructive attacks that could destabilize the economy.

Furthermore, the European Union Agency for Cybersecurity (ENISA) has identified ransomware, malware, social engineering, threats against data, and Denial of Service (DoS) as some of the top cybersecurity threats facing the region. These threats are increasingly sophisticated and complex, underlining the need for robust cybersecurity measures.

Climate Change Impacts:

The forecast for 2024 suggests that the year could surpass 2023 as the hottest ever recorded. The U.K. Met Office predicts that the average global temperature for 2024 could be between 1.34°C and 1.58°C above pre-industrial levels, with a central estimate of 1.46°C. This rise in temperature is driven by climate change and the effects of an ongoing El Niño event. El Niño typically leads to warmer global temperatures due to warm waters pooling in the eastern Pacific Ocean.

The Climate Prediction Center’s Seasonal Outlook also points to the influence of El Niño, suggesting that it will continue to impact weather patterns through at least the first part of the year. The result, of course, is more energy in the atmosphere resulting in extremes of heat, cold and storms/hurricanes with associated disruption and damage.

Coronal Mass Ejections:

Gartner raise this as the first of the “7 Disruptions you might not see coming: 2023-2028”. We are moving into a period of greatest sunspot activity which increases the risk of CMEs. A large CME could severely impact our infrastructure, power and communications and I provide more information and detail or impacts and mitigations in another blog.

For businesses, the risk of these events make it crucial to develop and maintain comprehensive resilience and continuity strategies that can adapt to a range of potential scenarios. Such planning should encompass infrastructure hardening, diversified supply chains, robust cybersecurity measures, and crisis management protocols to ensure minimal impact on operations and sustained economic prosperity.