Mapping Climate Justice: Future Climate Wealth of Nations

Mapping Climate Justice: Future Climate Wealth of Nations

Julia Margarete Puaschunder (Columbia University, USA & Princeton University, USA & The New School, USA)
DOI: 10.4018/978-1-5225-8003-4.ch009

Abstract

A three-dimensional climate justice approach introduces to share the benefits and burden of climate change in an economically efficient, legally equitable, and practically feasible way around the globe. Climate justice within a country pays tribute to low- and high-income households carrying the same burden proportional to their dispensable income through consumption tax, progressive carbon taxation, and a corporate inheritance tax. Climate change burden sharing between countries ensures those countries benefiting more from a warmer environment bear higher responsibility regarding climate change mitigation and adaptation. Climate justice over time is proposed by an innovative bonds climate change burden sharing strategy.
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Theory

Climate change winners and losers around the world: Based on the optimal temperature for Gross Domestic Production (GDP) measured on the pillars of agriculture, industry and service sector productivity, the optimal temperature condition for economic productivity can be derived per country. Given data of the average temperature per country around the world as well as climate projections of the year 2100 under a business as usual path, the world is found to macro-economically benefit from climate change more until 2100 than lose (Puaschunder, 2016a; Puaschunder, 2016b; Puaschunder, 2016c; Puaschunder, 2016d). Figure 1 holds Climate Change Winners (Green & Yellow) and Losers (Orange & Red). Yet these overall gains are distributed highly unequally around the world.

Green countries are those that have the most time ahead until reaching the optimal temperature for GDP production by climate, yellow countries have some time ahead. Orange and red countries will have run out of time by 2100 for GDP productivity by temperature. Winning and losing from a warming earth is significantly positively correlated with self-reported CO2 emissions, leading to the conclusion that the countries with the longest time horizon regarding a warming earth lack motivation to mitigate global climate change. Detected climate-induced migration streams and financial flows manifest that different part of the earth are affected differently by a warming earth. Future climate wealth of nations is expected to increase its importance for the society well-being in the future.

Figure 1.

Climate change winners and losers around the world

978-1-5225-8003-4.ch009.f01

Future wealth of nations is introduced by the concept of climate flexibility defined as the range of temperature variation of a country. In a changing climate, temperature range flexibility is portrayed as a future asset for international trade of commodities but also for production flexibility leading to comparative advantages of countries. A broad spectrum of climate zones has never been defined as asset and comparative edge in free trade but climate change will require territories being more flexible in terms of changing economic production. The more climate variation a nation state possesses, this chapter argues, the more degrees of freedom a country has in terms of GDP production capabilities in a differing climate. These preliminary insights aid in answering what financial patterns can we expect given predictions the earth will become hotter. Already now, the degree of climate flexibility is found to be related to human migration inflow and is predicted to determine future climate wealth of nations in a climate changing world. Lastly, future climate change induced market changes are pegged to scarcity of agriculture production and a prospect of commodity price spikes is given.

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Study 1

Results

Based on a 187 country-strong dataset, a significantly positive inflow of migrants was found into the climate change winner countries. A statistically significant correlation highlights a positive Foreign Direct Investment (FDI) inflow into the territories that have more time ahead towards temporal peak condition for GDP production. No significant remittances flow to climate change loser countries is found. The results underline the need to redistribute the gains from climate change to offset losses incurred from global warming and demand for a recognition of climate refugees under the Geneva Convention.

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