Climate Change's Winners and Losers

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Amid the concerns about potential damage wrought by climate change, some may stand to gain from global warming. Gregg Easterbrook talks about his cover story in the latest The Atlantic Monthly.

MADELEINE BRAND, host:

And here are some other ways to make money off bad news. Gregg Easterbrook is with us now. He's a fellow at the Brookings Institution. He's just written an article for The Atlantic Monthly on which industries will win and which will lose with global warming. And he joins us now. Welcome to the program.

Mr. GREGG EASTERBOOK (Writer, The Atlantic Monthly): Hi, Madeleine.

BRAND: Well, you take a cold, hard look at what climate change could mean for our economic well-being, and there are all sorts of bad news associated with this - land grabs, fights over water shortages - worse, people dying, their communities being flooded, disease is running rampant. What, though, is the upside?

Mr. EASTERBROOK: There are going to be a lot of losers if the world's climate changes the way scientists project, but there are going to be winners, too. Some people will end up ahead. Some regions of the world especially will be better off than other ones. And the big winners are likely to be in the Northern Hemisphere.

Just look at the Mercader projection of the world. We would guess that in a warming world, high-latitude land mass will become more valuable while equatorial land will become less valuable. Where is all the high-latitude landmass in the world? Well, it's all in Russia, Canada, the United States and Scandinavia. These places are likely to get a lot more valuable in a warming world.

BRAND: Greenland.

Mr. EASTERBROOK: In Greenland potentially also, yes. No nation covets Greenland's frozen expanse. Suppose Greenland were green again and warm, the countries of the world might be fighting over it. Think especially of Russia's situation. For centuries, poets have bemoaned the fact that Russia is cursed by this vast foreboding frozen, worthless Siberia. What if Siberia suddenly was warm, temperate and inviting? If the ice melts in Siberia, imagine how that will affect the global balance of power if Russia suddenly is sitting on the most valuable new thing found in the world in the 21st century.

BRAND: And what about in terms of investments? You say in your article that big pharmaceuticals are a good bet. Why is that?

Mr. EASTERBROOK: Well, if you're thinking long term and your 401K's, a warming world may see a spread of equatorial diseases - malaria and others. So the big pharma companies would be the ones who would fight them and the sort of odd silver lining to this may be that if malaria threatened the wealthy countries of the world - today, it plagues only the poor nations. If malaria threatened the wealthy nations, it might finally get cured. We might finally have a vaccine to it. But also, you would expect if the northern latitudes warm, that people's life spans will continue to extend because warmth is good for the human life span. So people are going to live longer anyway, but we would expect that in warming world there would be more geriatric citizens. They use more health care than other people do, so invest in big pharma companies.

BRAND: And anything else? Any other industries you'd recommend?

Mr. EASTERBROOK: Well, certainly, power production is going to be increasingly important to the world and increasingly also a political question because if there is green house gas regulation - and I think almost everyone believes that the United States will soon have serious green house gas regulation and yet we need more energy especially more electricity.

The ability to generate electricity with a lower amount of green house gasses is going to be at a premium in decades to come, and this means that smart, knowledge-oriented companies that have shown that they can do that are going to be the companies you want to be affiliated with. Duke Power is one that we mention in the article - always one of the leading edge utility corporations. Whereas on the other hand, I would be unloading my ExxonMobil, Exxon and Mobil may be rolling in money today, but they have no investments at all in green energy. As a company, they've always scoffed at green energy. Ten years from now, they may wish they hadn't.

BRAND: Do you find this discussion just a wee bit morally distasteful? I mean, you're talking about making money off a large portion of the world's misery.

Mr. EASTERBROOK: Well, no. This is pragmatism. If global warming theory is right - and increasingly, it looks like it's right - the world is going to change. Our economy will change. Our political structure will change. The sooner we prepare for it, the better off we'll be and the less painful the changes will be. I mean, the big worry about global warming when you talk about equity issues and money is that the nations that are likely to suffer are the equatorial nations that are already the worst off in the world.

Current economic trends are toward rising global equality. The per capita income of the developing world is currently going up faster than it is in the developed world. So you would think, well, you know, all other things being equal, that poor nations will become less poor in the decade to come. But if the climate changes, all the other things won't be equal. So we better get ready for this now and figure out what our response will be.

BRAND: Gregg Easterbrook is a contributor to the "Atlantic Monthly." His article on the economic affects of climate change is in the current issue. Thanks a lot, Gregg.

Mr. EASTERBROOK: thanks Madeleine.

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