New research finds that global warming has exacerbated global economic inequality, making already-wealthy nations even richer while slowing economic growth in poorer countries.
According to the study, published in PNAS late last month, between 1961 and 2010 rising temperatures led to a 17 to 30 percent decrease in per-capita wealth in the world’s poorest countries.
Economic inequality has actually decreased in recent decades, but the research suggests that the gap between rich and poor countries would have shrunk even more quickly without global warming. The advantage that countries with the highest economic output per-person have over countries with the lowest economic output per-person grew approximately 25 percent more since the 1960s than it would have in the absence of global climate change and its impacts, per the study.
“Our results show that most of the poorest countries on Earth are considerably poorer than they would have been without global warming,” Noah Diffenbaugh, a climate scientist at Stanford University in the United States and lead author of the study, said in a statement. “At the same time, the majority of rich countries are richer than they would have been.”
Many of the countries with the most robust, growing economies have benefited disproportionately from the activities that caused global warming in the first place, such as the burning of fossil fuels for energy. These nations are, therefore, also responsible for outsized shares of the current and historical greenhouse gas emissions that are driving global warming — and they’re actually benefiting from the climate crisis they created. The world’s biggest emitters, on average, have seen their per-capita gross domestic product (GDP) grow about 10 percent higher today than they would have in a world without warming, the study found.
The lowest emitters, meanwhile, have seen their economies dragged down by about 25 percent. “This is on par with the decline in economic output seen in the U.S. during the Great Depression,” Marshall Burke, an assistant professor of Earth system science at Stanford and study co-author, said. “It’s a huge loss compared to where these countries would have been otherwise.” India’s economy, for example, is currently 31 percent smaller than it would be in the absence of changing climatic conditions, the study states.
The impacts of temperature rises are not large year to year, but they accumulate over time and can lead to dramatic gains or losses, Diffenbaugh explains: “This is like a savings account, where small differences in the interest rate will generate large differences in the account balance over 30 or 50 years.”
The study builds on previous research led by Burke, an analysis of 50 years’ worth of data on temperatures and GDP in 165 countries that showed that economic growth accelerated in cool nations and slowed in warm nations during years with above-average temperatures.
For the present study, Diffenbaugh and Burke combined those previous findings with data from more than 20 different climate models to examine country-specific temperature rises driven by global warming and how those increased temperatures affected economic output. In order to account for the volatile and unpredictable nature of economies, the researchers made more than 20,000 projections of what each country’s annual economic growth rate could have been without global warming. The estimates of economic impact due to rising temperatures that they report in their paper reflect the range of outcomes produced by those projections.
The researchers determined that tropical countries were most likely to be subject to temperatures exceeding the ideal for economic growth. “For most countries, whether global warming has helped or hurt economic growth is pretty certain,” Burke said. “There’s essentially no uncertainty that they’ve been harmed.”
For temperate-climate nations in the middle latitudes, such as the United States, China, and Japan, the researchers discovered economic impacts have been less than 10 percent — but even they won’t remain sheltered from the economic impacts of the changing global climate if and when temperatures keep rising in future decades.
“A few of the largest economies are near the perfect temperature for economic output. Global warming hasn’t pushed them off the top of the hill, and in many cases, it has pushed them toward it,” Burke said. “But a large amount of warming in the future will push them further and further from the temperature optimum.”
Poor countries that, by and large, have not enjoyed the benefits of fossil fuel energy have been made relatively poorer by the energy consumption of wealthy countries — but renewable energy sources might offer a partial solution to both the climate crisis and global inequality. Diffenbaugh and Burke write: “Given the magnitude of the warming-induced growth penalties that poor countries have already suffered, expansion of low-carbon energy sources can be expected to provide a substantial secondary development benefit (by curbing future warming-induced growth penalties), in addition to the primary benefits of increased energy access.”
• Burke, M., Davis, W. M., & Diffenbaugh, N. S. (2018). Large potential reduction in economic damages under UN mitigation targets. Nature, 557(7706), 549. doi:10.1038/s41586-018-0071-9
• Diffenbaugh, N. S. & Burke, M. (2019). Global warming has increased global economic inequality. Proceedings of the National Academy of Sciences. doi:10.1073/pnas.1816020116
Banner image: Drought-ravaged land in India. Photo by Samarth Singhai.