Future Climate Wealth of Nations' Winners and Losers

Abstract

Mapping Climate Justice proposed a 3-dimensional climate justice approach to share the burden of climate change right, just and fair around the globe. First, climate justice within a country should pay tribute to the fact that low- and high-income households carry the same burden proportional to their dispensable income, for instance, enabled through a progressive carbon taxation. Secondly, fair climate change change burden sharing between countries ensures those countries benefiting more from a warmer environment also bear a higher responsibility regarding climate change mitigation and adaptation efforts. Thirdly, climate justice over time is proposed in an innovative bonds climate change burden sharing strategy. All these recommendations are aimed at ensuring to share the burden but also the benefits of climate change within society in an economically efficient, legally equitable and practically feasible way. Future wealth of nations is introduced by the concept of climate flexibility defined as the range of temperature variation of a country. In a changing climate, temperature range flexibility is portrayed as a future asset for international trade of commodities but also for production flexibility leading to comparative advantages of countries. A broad spectrum of climate zones has never been defined as asset and comparative edge in free trade but climate change will require territories being more flexible in terms of changing economic production. The more climate variation a nation state possesses, this paper argues, the more degrees of freedom a country has in terms of GDP production capabilities in a differing climate. These preliminary insights aid in answering what financial patterns can we expect given predictions the earth will become hotter. Already now, the degree of climate flexibility is found to be related to human migration inflow and is predicted to determine future climate wealth of nations in a climate changing world. The previously defined climate change winner and loser index will be blended with the novel insights on climate flexibility, leading to an unprecedented outlook on future climate wealth of nations. Lastly, future climate change induced market changes are pegged to scarcity of agriculture production and a prospect of commodity price spikes is given.