Apr 23, 2019 - Energy & Environment

Global warming is worsening the global wealth gap, study finds

Global warming has already created winners and losers across the world, with poorer, tropical nations suffering the most even though they contributed far less to the problem in the first place, a new study finds.

Adapted from Diffenbaugh, et. al., "Global warming has increased global economic inequality", 2019; Chart: Axios Visuals
Adapted from Diffenbaugh, et. al., "Global warming has increased global economic inequality", 2019; Chart: Axios Visuals

Why it matters: This is the first study to find that global warming to date has already affected the gap between rich and poor nations. It suggests that countries like Norway have benefited from warming air temperatures and other associated impacts, while nations like India, Brazil and Nigeria have seen far slower growth in per capita GDP as a result of warming.

The big picture: The study, published Monday in Proceedings of the National Academy of Sciences, finds that from 1961 to 2010, global warming decreased the per capita wealth in the world's poorest countries by about 17% to 30%.

  • Meanwhile, the gap between the group of nations with the highest and lowest per capita GDP is now about 25% wider than it would have been without climate change, the study found.
  • While economic inequality between countries has narrowed in recent decades, the new study shows this should've happened at a more rapid rate, and it suggests that future narrowing of this gap may be harder to achieve due to climate change.

Details: The study by two Stanford University professors, Noah Diffenbaugh and Marshall Burke, uses previous research that analyzed the relationship between temperature and GDP and found that economic output declines once average temperatures become too hot.

  • This is due to declines in agricultural productivity and labor productivity, among other factors.

For the new study, Diffenbaugh and Burke used the previous estimates and data in more than a dozen climate models to determine how each country has warmed as a result of climate change.

The metric they were interested in was how much each nation's economy would have grown without human-caused global warming.

What they found:

  • It's clear that global warming has harmed economic growth in tropical countries in particular.
  • It's less evident from the new research whether warming has aided economic growth in cooler regions in the middle latitudes, such as the U.S., China, the European Union and Canada.

"We have very high confidence that a large subset of countries in the low latitudes where it is warm have been negatively impacted by historical global warming, so they have lower per capita GDP today than they would have had global warming not occurred," Diffenbaugh tells Axios.

“We’re not arguing that global warming created inequality. We’re not arguing that it’s caused a rise in inequality. What we find is that it has slowed the decline in global inequality," he says.

The study finds, for example:

  • In India, climate change caused 31% lower per capita GDP growth relative to a scenario without human-caused warming.
  • In Brazil, the impact was minus 25% per capita GDP.
  • In Nigeria, it was minus 29% per capita GDP.
  • Yet Canada showed a positive 32% increase in per capita GDP due to global warming.

The other side: The study is not without its critics. Solomon Hsiang, a public policy researcher at UC Berkeley and Stanford, who studies the economic impacts of climate change and has collaborated with Diffenbaugh and Burke in the past, was critical of the new paper.

He told Axios that its conclusions are stronger than merited by the evidence.

  • "I think the study’s statement that warming should have already harmed economic opportunities in poor countries is extremely important and almost definitely correct," Hsiang told Axios via email.
  • "But the conclusion that rich countries should have benefited from warming is far less clear with limited support in this study... When one considers the possibility that warming in the current year might affect growth in future years, then the method employed by the study would suggest that most or all rich countries probably have also lost income."
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