How global warming has made the rich richer

Climate change is driving the wealth gap in more ways than we think.

Temperatures may be rising globally, but not all of us feel the impact in the same way.

Over the past half century, climate change has increased inequality between countries, dragging down growth in the poorest nations whilst likely boosting prosperity in some of the richest, a new study says.

The gap between the world's poorest and richest countries is about 25% larger today than it would have been without global warming, according to Stanford University researchers in California.

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African countries in tropical latitudes have been the hardest hit, with the GDP per capita of Mauritania and Niger more than 40% lower than they would have been without the rising temperatures.

India - which the IMF says will become the world's fifth largest economy this year - had a GDP per capita 31% lower in 2010 because of global warming, says the study. The figure for Brazil - the world's ninth largest economy - is 25%.

On the other hand, according to the study published in the Proceedings of the National Academy of Sciences journal, global warming has likely contributed to the GDP per capita of several rich nations, including some of the world's biggest emitters of greenhouse gases.

Warming penalty

Co-author Professor Marshall Burke, from the Department of Earth System Science at Stanford University, spent several years analysing the relationship between temperature and economic fluctuations in 165 countries between 1961 and 2010.

The study used more than 20 climate models to determine how much each country has warmed due to climate change attributable to humans. Then it calculated 20,000 versions of what their annual growth rate would be without temperature increase.

Burke demonstrated that growth accelerated in cool countries in years which were warmer than average, while in hot nations it slowed down.

"The historical data clearly show that crops are more productive, people are healthier and we are more productive at work when temperatures are neither too hot nor too cold," he said.

He argues that cold countries have reaped "warming benefits" from rising mercury, while hot countries have been given a "warming penalty" by being pushed further away from their optimum temperature.

"There are a number of pathways by which the building blocks of aggregate economic activity are influenced by temperature," says lead researcher Noah Diffenbaugh.  

"For example, agriculture. Cold countries have a very limited growing season because of the winter. On the other hand we have substantial evidence that crop yields declined sharply at high temperatures," Diffenbaugh says.

"Likewise, there is evidence that labour productivity declines at high temperatures, that cognitive performance declines at high temperatures, interpersonal conflict increases at high temperatures."

For richer and poorer?

The researchers say while there is some uncertainty regarding the benefits reaped by colder, richer countries, the impact on warmer countries over history has been unequivocal.

In fact, if they were to consider global warming since the beginning of the Industrial Revolution, they say the observed effects would be larger.

"The findings of this study are consistent with what has been known for years, that climate change acts as a threat multiplier, and takes existing vulnerabilities  and makes them worse," says Happy Khambule, senior political advisor at Greenpeace Africa.

"This means that the poorest and most vulnerable are on the frontlines of climate change, and developing countries have to deal with the increasingly extreme climate impacts at the expense of their own development."

Mozambique's lack of resilience was apparent after cyclone Kenneth, which caused more than 40 deaths since making landfall on 25 April, Khambule adds.

In March, more than 900 people died across Mozambique, Malawi and Zimbabwe as a consequence of Cyclone Idai.

But even South Africa, which benefits from a more sophisticated infrastructure, has struggled in the face of extreme weather events like the Day Zero water crisis in 2018 and the recent floods in Kwa-Zulu Natal, Khambule says.

"African countries have contributed very little to creating climate change, and are nonetheless facing deep impacts that they are ill-equipped to deal with."

No sharing of the wealth

According to the study, between 1961 and 2010 all of the 18 countries whose total historical emissions are less than 10 tons of CO2 per capita (nine tonnes) have suffered a negative impact from global warming - with a median reduction of 27% in their GDP per capita compared to the scenario without rising temperatures.

By contrast, 14 of the 19 countries whose cumulative emissions exceed 300 tons of CO2 per capita (272 tonnes) have benefitted from global warming, with a median contribution to GDP per capita of 13%.

"Not only have poor countries not shared in the full benefits of energy consumption, but many have already been made poorer (in relative terms) by the energy consumption of wealthy countries," the study says.

But the findings haven't been received without criticism.

Solomon Hsiang, Public Policy professor at UC Berkeley, who has collaborated with the two researchers in the past, says that although the impact of global warming on poorer, hotter countries is "most definitely correct", its negative impacts are also felt in richer countries.

"We see delayed harms show up in richer countries, using the methods of that analysis. So if you look beyond the first year of impacts, you see damages show up in the colder, richer countries as well as the hotter, poor countries," Hsian says.

It is also less clear how growth has been affected in countries in the middle latitudes, including the US, China and Japan - the world's three largest economies.

"In the long term, climate change benefits no-one," Khambule says. "If it continues unabated, we will face runaway climate change. It is critical that the world's largest emitters act to reduce their emissions urgently."

"Policy makers need to take climate change much more seriously than they currently do, and ensure that there is an urgent transition away from fossil fuels and towards renewable energy."

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