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Axios Future

The best — and perhaps only — way to respond to huge changes in the climate and global demography may be to facilitate mass migration.

Why it matters: Migration in the future will be subject to powerful push and pull factors — the push of climate change and the pull of rich and aging countries in the West and East Asia that will desperately need younger workers from abroad.

But a big post-COVID migration wave will need to overcome substantial political barriers.

What's happening: In his new book "Move: The Forces Uprooting Us," political geographer Parag Khanna makes the case that the world is poised to enter a new era of mass migration in response to major environmental, economic and political changes — and this will be a largely positive change.

That may come as a surprise. International migration largely shut down during COVID-19, as countries turned to border controls to slow the advance of the virus, while past migration waves often seemed to lead to a right-wing backlash in the U.S. and Europe.

But "migration is a major part of the 100,000-year history of humankind, and the idea that it will be permanently switched off because of the pandemic is preposterous," Khanna tells Axios.

"All the forces driving human migration are in hyperdrive."

Between the lines: The single biggest factor is that whatever they might feel politically about immigration, most rich countries will require large numbers of workers to keep their economies going in the face of population slowdown and decline.

Germany, the richest nation in Europe, could see its population decline from 83 million in 2017 to 60 million or less by the end of the century, with a far higher proportion of elderly citizens beyond working age.

Over the same time period, Nigeria's population could at least more than double to 400 million people, many of them the kind of young workers rich nations will need. 

"The gap between old and young people within countries and across them is worse than ever, and it's only going to get more acute," Khanna says. "One by one, countries are waking up to the reality that they need young people to pay taxes and take care of the old people."

Zoom in: The U.K. is an early example of what can happen to a rich country if it disrupts the importation of labor. Thanks in part to Brexit, Britain is experiencing a labor shortfall of nearly 1 million workers.

Context: At the same time, many of the countries and regions that have a surplus of people will also come under increasing pressure from climate change, while many of the areas that will remain more livable in a hotter future — what Khanna calls "climate oases" — are comparatively empty.  

Within the U.S., heavily populated places like the desert Southwest or wildfire-prone parts of California will become increasingly inhospitable even as colder, depopulating areas like the Great Lakes are poised to better withstand climate change.

The big picture: Put it all together, and the future seems to call for what Khanna terms "cosmopolitan utilitarianism" — a massive redistribution of the global population to the places that get the most out of and offer the most safety to the most people.

"Mass migration is one of the things that we are really good at as a human civilization," says Khanna. "The most successful societies in history are those that continuously absorb migrants and make them their own." 

The catch: The politics of expanding immigration is highly fraught, to say the least. 

In the U.S., President Biden finds himself caught between immigration activists on his left and anti-immigrant forces on his right as he tries to negotiate a southern border crisis that could be just a taste of what's to come.

As German Chancellor Angela Merkel prepares to leave office, Europe will lose the voice of a leader who famously said of the Syrian migrant wave in 2015 that "we can handle this."

Yes, but: Khanna points to the example of the U.K, which even with Brexit admitted more non-EU foreign students in 2020 than it did in 2019, and to the recent defeat of single-issue, anti-migrant EU populist leaders like Czech Prime Minister Andrej Babis.

Even Japan, a country that has long been seen as anti-immigrant, is showing more openness to foreigners — in part because its demographic decline is so severe that adult diapers now outsell infant ones.

The bottom line: As Khanna puts it, citizens in rich countries may need to decide between a future of mass migration and one where "their parents are going to die alone" for lack of young workers. 

The future will depend on letting people move

Rich countries will need to choose between mass migrations and demographic decline

Illustration of a navigation icon made from barbed wire.  

Immigration

The best — and perhaps only — way to respond to huge changes in the climate and global demography may be to facilitate mass migration.Why it matters: Migration in the future will be subject to powerful push and pull factors — the push of climate change and the pull of rich and aging countries in the West and East Asia that will desperately need younger workers from abroad.

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Parag Khanna - Axios

Parag Khanna - Axios

Generate

Axios Generate

A new climate software firm that's announcing itself to the world on Tuesday says it has a competitive edge that other companies lack.

The big picture: Climate Alpha, which just raised a $4 million seed round, uses AI and machine learning to tell customers where to invest and move to in light of climate change and other factors.

Other firms focus on where to avoid, says its founder and CEO, Parag Khanna.

Driving the news: Climate impacts like sea level rise and extreme weather events will interact with socioeconomic trends and other developments to make places more or less desirable places to live.

Zoom in: Climate Alpha uses software to consider as many drivers as possible that could affect real estate values in a warming world.

The result, Khanna told Axios, is a guide to where businesses, governments, individual homeowners and others should invest for a more resilient future. 

Other companies right now are focused on identifying climate risk, rather than adaptation opportunities, he said.

Climate Alpha's customers and partners include the homebuilder Lennar and asset manager BentallGreenOak.

Between the lines: Climate Alpha's models include all U.S. ZIP codes, with different algorithms for each property type.

The company forecasts real estate values for every year out to 2040 under various climate scenarios.

Through a partnership with Mastercard, cities may use Climate Alpha's "Resilience Index" platform to prioritize where to spend resilience grants and funds for public housing, Khanna said.

Of note: The company began as research for Khanna's latest book, "Move: The Forces Uprooting Us," and spun out of another of his ventures, FutureMap.

What they're saying: "The climate analytics industry has been focused on telling people where they'll need to sell, but not where they should buy," Khanna told Axios via email.

One advantage to his company's approach, he says, is that it incorporates factors far afield from climate.

"Risk analytics alone don't predict consumer behavior, otherwise nobody would move to Miami or Phoenix," he said. Its models include other relocation influences, such as affordability and tax rates.

Yes, but: Climate Alpha is predicated on a bet that proactive relocation can keep Americans a step ahead of the climate.

However, this rests in part on the rate of global warming being manageable.

Nasty surprises, such as tipping points, lurk within the climate and are difficult to model.

In addition, growing inequality could limit America's resilience.

Lastly, a big wild card will be how the millions of climate refugees worldwide will affect geopolitics.

Climate Alpha wants to guide real estate through climate change

The company is looking at finding climate adaptation opportunities, not just risks.

Illustration for a for sale sign in the middle of a body of water

Climate change

The skyline of Manhattan in New York City.

A new climate software firm that&#x27;s announcing itself to the world on Tuesday says it has a competitive edge that other companies lack.The big picture: Climate Alpha, which just raised a $4 million seed round, uses AI and machine learning to tell customers where to invest and move to in light of climate change and other factors.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

The Trump administration remains determined to double down on its China trade strategy by escalating tariffs from 10% to as much as 25% on consumer goods, electronics and automobiles by the end of the year. The strategy aims to further reduce America's $500 billion in annual imports from China.

The big picture: While this may cost China as many as 2 to 3 million jobs, it's not clear that it will reduce China’s overall exports. In fact, Trump’s trade war is exacerbating the trade deficit. Perhaps most troublingly for long-term U.S. economic growth, it's steering Asian countries — and their billions of consumers — toward non–U.S. trading partners.

Where it stands: As its economy and consumer confidence grow, the U.S. continues to buy more equipment and finished products from China and others, even as higher import costs have been passed on to American consumers. Meanwhile, a weaker renminbi has contributed to China's recording a much-larger-than-expected trade surplus in September.

Between the lines: Rather than disciplining these trade partners, Trump’s policies are encouraging them to increase trade that bypasses the U.S. For example, Trump withdrew the U.S. from the Trans-Pacific Partnership last year, but Canada promptly ratified a revised version of the agreement and recently announced a major new liquefied natural gas plant that will directly compete with U.S. gas exports to Asia.

Trump’s trade strategy may not have its intended effect In the automotive sector either. His 11th-hour deal with Canada and Mexico to update NAFTA expanded “rules of origin” requirements, but these quotas will actually benefit cheaper steel and auto-part manufacturers, particularly from Asia, while reducing investment in the U.S. and its neighbors. As it is, the administration's tariff hikes have raised costs for U.S. industrial and automotive companies, from Caterpillar to Ford, squeezing their margins. 

The same pattern is occurring in the tech industry. Trump claimed a victory in blocking Qualcomm, Google, and other tech companies and software producers from selling components to Chinese telecom giant ZTE in order to thwart China’s “Made in China 2025” initiative. But most of China’s high-tech imports don't come from the U.S in the first place.

The bottom line: The more Trump tries to isolate China, the more other countries will move to capture the U.S. market share in China and Asia more broadly. "America First" cannot succeed when the world economy and global supply no longer bow to the U.S.

Parag Khanna is the founder of FutureMap and the author of "The Future is Asian: Commerce, Conflict, and Culture in the 21st Century."

As trade gap with China widens, Trump's strategy is isolating the U.S.

Trump's strategy is steering Asia toward other trading partners.

US Treasury Secretary Steven Mnuchin (C) walks through a hotel lobby as he heads to the US embassy in Beijing on May 3, 2018. 

Treasury Secretary Steven Mnuchin heading to the U.S. embassy in Beijing for trade talks on May 3, 2018. Photo: Greg Baker/AFP via Getty Images

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U.S. China trade war

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Trade war

The Trump administration remains determined to double down on its China trade strategy by <a class="gtmContentClick" data-vars-link-text="escalating tariffs" data-vars-click-url="https://www.cnn.com/2018/09/17/politics/us-china-tariff-trade-war/index.html" data-vars-content-id="dca4f110-50a9-46e1-962b-303ac770092a" data-vars-headline="As trade gap with China widens, Trump&#x27;s strategy is isolating the U.S." data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cnn.com/2018/09/17/politics/us-china-tariff-trade-war/index.html" target="_blank">escalating tariffs</a> from 10% to as much as 25% on consumer goods, electronics and automobiles by the end of the year. The strategy aims to further reduce America&#x27;s $500 billion in annual imports from China.The big picture: While this may cost China as many as 2 to 3 million jobs, it&#x27;s not clear that it will reduce China’s overall exports. In fact, Trump’s trade war is <a class="gtmContentClick" data-vars-link-text="exacerbating the trade deficit" data-vars-click-url="http://time.com/5416721/us-trade-deficit-grew-august/" data-vars-content-id="dca4f110-50a9-46e1-962b-303ac770092a" data-vars-headline="As trade gap with China widens, Trump&#x27;s strategy is isolating the U.S." data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://time.com/5416721/us-trade-deficit-grew-august/" target="_blank">exacerbating the trade deficit</a>. Perhaps most troublingly for long-term U.S. economic growth, it&#x27;s steering Asian countries — and their billions of consumers — toward non–U.S. trading partners.

Three weeks ahead of a meeting between President Trump and China's Xi Jinping, Beijing is notching record exports and figuring out how to manage without American goods.  

Why it matters: Despite tariffs on $250 billion in Chinese goods, Trump has appeared to fail to budge Xi on his determination to do whatever it takes to dominate the technologies of the future. 

In August, we flagged an upcoming year-long trade war between the U.S. and China. Now, there is no indication that it will end even then.

Trump says he will tariff the rest of China's $510 billion in trade with the U.S. if he and Xi cannot strike a deal in Buenos Aires on Nov. 29. 

In remarks today, Xi indicated little flexibility, suggesting that Trump needs to respect China's strategic choices, Reuters reports.  

Meanwhile, while China's economy is flagging a bit — in the third quarter, its GDP growth was 6.5% year-on-year, the slowest since the financial crash — it is still humming: Chinese exports keep rising, report the WSJ's Liyan Qi and Grace Zhu. 

The acrimonious U.S.-China trade gap is up 15% from a year ago and China is on pace to post another record surplus. 

One of the trade war's most immediate U.S. victims is Maine lobster fishing, writes Bloomberg's Shawn Donnan. In line with Trump's tariffs, China slapped 25% levies on $128 million-a-year in U.S. lobster imports, and Maine's industry — cultivated over a decade and more — got hit.

China is simply buying its lobsters elsewhere — such as just over the border in Nova Scotia, Canada. 

The list goes on. Parag Khanna, author of the forthcoming, "The Future is Asian," tells Axios that China is finding ways to permanently substitute for American imports. 

Last summer, China slashed U.S. oil imports and started to buy more Russia and Saudi Arabia. 

It has all but halted purchases of U.S. soybeans, buying them instead from Brazil and Argentina. Brad Setser, an economist at the Council on Foreign Relations, said Russia could emerge as another soybean supplier.

China very much wants to make and design its own high-end semiconductors as part of its aspirational Made in China 2025 program. For now, Khanna said a third of its high-tech imports come from U.S. companies. But it can begin to replace these from its Asian neighbors.  

“Imagine China decides to cancel or diminish orders of Boeing aircraft. Of course, it can just boost orders from Airbus.”

Trump is said to want to decouple the U.S. and Chinese economies — and increasing numbers of establishment experts think he is right given China's aggressive economic tactics. 

And the administration pushback is having an impact: In a report by the American Chamber of Commerce in Shanghai, more than 70% of U.S. firms surveyed in southern China said they were moving some or all their manufacturing out of the country, mostly to southeast Asia, Reuters reports. 

But trade experts note that there could be a price for such all-or-nothing brinksmanship should the U.S. decide that it wants trade with China after all. 

“Once the U.S. loses the Chinese market for a product, it is unlikely to get it back even if this round of the trade war ends and tariffs are lifted," said Edward Alden, a trade expert at the Council on Foreign Relations. "This is both because it will establish new sourcing patterns, which tend to be sticky, and because Chinese buyers will not want to run the risk of future U.S. tariffs."

Soybeans are an unlikely political ground zero in Trump's trade war

China figures out how to live without U.S. lobster and soybeans

Two of the trade war's most immediate U.S. victims.

Soy farming in Owings, MD, which already sells its crop to U.S. chicken farmers. Photo: Mark Wilson/Getty