As temperatures rise with climate change, the Earth’s natural capital will change too − but there may be few winners, even among the wealthy.
LONDON, 5 March, 2016 – Climate change could seriously redistribute resources and reallocate wealth – but not in a fair way.
In a reverse of the famous Robin Hood folklore, it could rob from the poor to give to the rich, according to researchers. Yet even the rich may not feel any richer.
In one clear instance, as scientists have repeatedly warned, fish stocks are likely to move away from the equator and towards the poles, as the tropics heat up and expand.
This means that at least one valuable resource will move away from some of the world’s poorest nations, and in the direction of societies that are relatively wealthier − if only because economic power has for so long been vested in the temperate zones. And this shift will have economic consequences.
Eli Fenichel, assistant professor of bioeconomics and ecosystem management at the Yale School of Forestry and Environmental Studies in the US, says: “People are mostly focused on the physical reallocation of these assets, but I don’t think we’ve really started thinking enough about how climate change can reallocate wealth and influence the prices of those assets. We think these price impacts can be really, really important.”
Real cash value
Only last month, Dr Fenichel identified a way of calculating a real cash value for what environmentalists call “natural capital”.
Now he and other colleagues, in a study for Nature Climate Change, have started to think about where and for whom the cash might start accumulating. He has no immediate answer.
“We don’t know how this will unfold, but we do know there will be price effects,” he says. “Prices reflect quantity and scarcity, and natural capital is hard for people to move. It is just as inevitable as the movement of these fish species.”
“The losers are losing much more than the gainers
are gaining. And when that happens, it’s not
an efficient reallocation of wealth”
The researchers say cautiously that climate change – driven by greenhouse gas emissions from the combustion of fossil fuels in the last century or so – “can reallocate natural capital, change the value of all forms of capital, and lead to mass redistribution of wealth”.
And it isn’t obvious, they suggest, that even the better-off will always benefit from changes of natural capital, such as a shift in the fishing grounds. An influx of desirable species off the more northerly fishing ports could actually reduce the cash value of catches.
Dr Fenichel says: “If the northern community isn’t a particularly good steward or manager, they’re going to place a low value on that windfall they just inherited. So the aggregate could go down.
Clearly better off
“To be clear, the gainers here are clearly better off. They’re just not more better off than the losers are worse off. The losers are losing much more than the gainers are gaining. And when that happens, it’s not an efficient reallocation of wealth.”
Climate scientists have frequently warned that climate change could hit the poorest hardest. For example, the world’s drylands are likely to become more parched with climate change, and many of the world’s poorest people are already feeling stress.
Tropical forests and reefs are rich in the “natural capital” of biodiversity, but global warming also threatens some of this.
“We tend to think of climate change as just a problem of physics and biology,” says co-author Malin Plinsky, an ecologist at Rutgers University.
“But people react to climate change as well, and at the moment we don’t have a good understanding of the impacts of human behaviour on natural resources affected by climate change.” – Climate News Network