Economic inequality gets worse under climate change, study finds

Climate change is having a serious impact on economic growth across the world — and it’s worse for poor countries that already had a lot of catching up to do, according to a new study. Two Stanford University researchers modeled the country-by-country effects of global warming over a 50-year period, and published their findings in a paper out Monday in the Proceedings of the National Academy of Sciences. Countries with the hottest climates suffered the most economic damage, the study showed. India’s gross domestic product per capita, for example, was 31% lower in 2010 than it would have been if not for global warming caused by human activity over the prior half century, the study found. Chad’s economic activity per person was 39% lower, Venezuela’s was 32% lower, and Nigeria’s was 29% lower. In absolute terms, many of those countries have actually boosted their economic output significantly over the past half century, and as a result, inequality between countries has declined in recent years. However, that progress could have moved faster if temperatures weren’t rising, the study found. “It represents a number of years of economic development that have effectively been delayed,” said Noah Diffenbaugh, a senior fellow at Stanford University’s Woods Institute for the Environment who co-authored the report with Stanford’s Marshall Burke. “There would’ve been a greater convergence, and less inequality on the country level than what we have seen, if global warming hadn’t occurred.” The report doesn’t describe exactly how rising temperatures have depressed economic growth. But other research has demonstrated how warming above a certain “optimum” average temperature — estimated in a previous study by Burke at about 13 degrees Celsius, or 55 degrees Fahrenheit — can dry out farmland, lower cognitive function, decrease worker productivity and increase interpersonal conflict, among other effects. “To me this confirms and quantifies trends that we have been seeing in a lot of poor countries,” Rebecca Carter, deputy director of the climate resilience practice at the nonprofit World Resources Institute, said of the findings. Carter pointed to Costa Rica, which the study estimated has 21% lower GDP-per-capita than it would have without human-caused global warming. There, coffee farmers have seen lower yields and more frequent disease outbreaks due to higher temperatures. “In some parts of the country their harvests have been undermined gradually, year after year after year,” Carter said. Could richer countries benefit? Wealthier countries have historically generated the most greenhouse gas emissions, which tend to rise with industrialization and personal consumption unless effective pollution controls are imposed. Rich countries also tend to be further north and have cooler temperatures, on average. And they may, in fact, actually have benefited from the warming trend as they approach the “optimum temperature” for economic growth, further widening inequality across countries. For example, the study found that Iceland’s economic output is nearly double what it would’ve been without man-made temperature change — the largest outlier in the results. Countries like Canada, Norway, and Finland also benefited, adding between a quarter to a half of their per capita GDPs on account of warming between 1961 and 2010, according to the study. That could happen if agriculture benefits from longer growing seasons, for example, or if fewer snowstorms interrupt transportation. The idea that rich countries have benefited from climate change is controversial, and that part of the study has encountered skepticism from others in the climate science field. Two outside experts who reviewed the study at CNN Business’ request, Wolfram Schlenker of Columbia University and Solomon Hsiang of the University of California-Berkeley, each said that its conclusions are weaker when taking into account the response of countries to warming over time. “For example, a hot year might temporarily reduce GDP in a year, but it might rebound in future years,” Schlenker wrote in an email. The study also looked at the response to temperature changes with five-year lags, and under those parameters, the previously apparent benefits for richer, cooler countries faded away. Even under that scenario, however, the authors found there was a 66% likelihood that climate change widened the gap between rich and poor countries. “The authors consider this case in the last table of the appendix and find that inequality would have almost not changed using this approach, I believe because everyone (rich and poor) suffers so economic gaps do not widen as much,” wrote Hsiang, who co-authored a 2015 paper with Burke upon which much of the new analysis is based. “I think this finding is important and probably should have been the main approach, since it’s likely closer to the truth.” Poor countries don’t suffer alone Diffenbaugh acknowledged that the results showing climate change has enriched wealthy countries have the most uncertainty around them. However, he stood by the finding that climate change has very likely widened inequality across countries, because the evidence of deep negative impacts for poorer nations is so strong. That’s something that other large climate studies, such as the UN Intergovernmental Panel on Climate Change, have also affirmed — especially when it comes to more qualitative impacts on human health and vulnerable ecosystems. Previous work has also looked at the unequal impact of climate change within countries and across income groups, making clear that wealthier individuals of all nationalities are better-equipped to adapt to or shield themselves from a warming world. Wealthier people can often work inside with the benefit of air conditioning and are more likely to be able to afford to relocate or rebuild if storms reach their homes. A study released last year by Hsiang and co-authors, for example, projected that the poorest counties in the United States would see the largest negative effects from climate-change events like droughts and hurricanes because they’re already concentrated in the steamy deep South. But the new study is among the first to boil the impact of climate change down to an estimate of national economic output, which is a simple way of understanding how people are faring on average within each country. Even though people are impacted differently within the US, for example, the Stanford researchers found that climate change had little to no effect on overall GDP-per-capita between 1961 and 2010. For countries that are negatively impacted, the broader economy is less able to absorb and respond to the people who are hardest hit. “When we say ‘standard of living,’ we mean real income, which means GDP-per-capita,” said Branko Milanovic, a professor at the City University of New York who studies global income inequality and who also reviewed the new report at CNN Business’ request. “If climate change is particularly bad for poor countries, that means climate change would make elimination of poverty extremely difficult.” Furthermore, negative impacts even in cooler countries can ramp up quickly. The melting of ice in Alaska has prevented indigenous residents from hunting whales, for example, and algae blooms have turned lakes from tourist destinations into dead zones. And of course, poor countries don’t suffer in isolation. Poverty can spark or worsen political conflict, and residents displaced by wars and drought often end up seeking refuge in richer countries. “We can’t assume that what’s happening somewhere across the globe isn’t going to have impacts in richer countries,” said David Waskow, director of the International Climate Initiative at the World Resources Institute. “To me this is an indication of the way in which those who are on the front lines of the problem are being affected in ways that we should anticipate will spread.”