Global warming will drive vast unpredictable shift in natural wealth

Washington: A new study has warned that global warming will drive vast and unpredictable shift in natural wealth by taking from the poor and giving to the rich.

Many studies have shown that critical natural resources, including fish stocks, are moving poleward as the planet warms. The study from Yale, Rutgers, Princeton, and Arizona State universities suggests that these biophysical changes are also reallocating global wealth in unpredictable, and potentially destabilizing, ways.

On its surface, these biophysical movements will shift resources from communities and nations closer to the equator into places closer to the poles. In many cases this would seem to exacerbate inequalities between richer and poorer communities.

The researchers suggest that the impacts on net global wealth may not be that straightforward. In fact, they make the case that changes are more likely than not to produce an overall net loss in global wealth.

The reason, says lead author Eli Fenichel, is the inevitable and unpredictable price impacts in places where the quantities of fish stocks increase depending on the quality of its resource management, existing institutions, and fishing regulations.

Co-author Malin Pinsky said, "We tend to think of climate change as just a problem of physics and biology. But people react to climate change as well, and at the moment we don't have a good understanding for the impacts of human behavior on natural resources affected by climate change."

To illustrate their case, the authors model potential outcomes in two fictitious fishing communities (Northport and Southport) in the face of climate-driven shifts in fish populations. Southport's fish stocks decline as the climate changes while Northport's stock increases; it's a scenario that reflects changes anticipated in areas such as the mid-Atlantic and the waters off New England in the eastern US.

According to their analysis, if fish quantities increase in a northern community, for instance, it will likely cause a devaluation of that resource locally, particularly if that community isn't equipped to manage the resource efficiently. "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," Fenichel said. "So the aggregate could go down."

"To be clear, the 'gainers' here are clearly better off," he said. "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."

The analysis suggests that policy discussions around climate change should address how the physical changes will affect wealth reallocation, rather than allowing nature to redistribute this wealth in an unpredictable, "willy-nilly" manner.

The study appears in the journal Nature Climate Change.