In my new book, Climatopolis, I argue that anticipation is the first step in developing pro-active strategies to cope with climate change. Even if we could reduce our greenhouse gas emissions to zero today, we would still face climate change due to the cumulative stock of emissions. My book examines how cities around the world will cope. Major cities such as New York City and San Diego have been commissioning “crystal ball” studies for what their cities will be like in the mid-21st century.
Sea level rise represents a serious threat for coastal cities. The amount and the timing of such sea level rise remains an open question. In California, the Pacific Institute is using GIS software to identify areas around California that are likely to face significant flooding due to climate change. In the typical GIS analysis, researchers superimpose maps to identify the land area that is likely to be affected by climate change induced flooding. These researchers then overlay Census demographic information counting how many people and housing units are currently located in this new flood zone. The payoff of such an analysis is that we see who and how much economic activity is at risk from climate change. Within city migration protects the population against this risk.
To reduce this expected damage, society can use insurance pricing and zoning to nudge economic activity away from such at risk areas or encourage the “victims” to take actions to reduce their risk from natural disaster (i.e elevate their homes or re-enforce them with better materials).
Not all cities will suffer equally from climate change. There are over 300 major cities to choose from in the United States. A city such as Seattle may suffer much less. An implicit assumption throughout Climatopolis is that there will always be some safe area where our cities can thrive and we can migrate to. If the entire 7 billion people on the planet lived at Hong Kong’s density then we would need 1.1 million square kilometers of habitable land. This represents just .7% of the world’s land mass.
Suppose that California’s coastal cities suffer greatly from climate change due to the combined punch of sea level rise, hotter summers, drought and rising electricity prices.
Self interested households will see that California cities are no longer great places to live and they will “vote with their feet” and migrate to other cities that have suffered less from climate change or perhaps even gained due to warmer winter temperatures.
Growth economists have long argued that human capital (attracting and retaining the footloose, skilled) is the key for a nation or a city to enjoy sustainable growth. If a city such as Los Angeles loses its quality of life edge, then the skilled will move elsewhere and firms will be less likely to move to Los Angeles. Similar to a neighborhood with high crime or bad schools, local real estate prices will fall. The owners of such assets will bear the incidence of this “new news”. While real estate values would decline in cities deemed to be increasingly at risk, there are other cities that could actually experience a windfall. Today, you can trade one home near UCLA for 100 Detroit homes. In 2070, will this exchange rate still hold or will there be parity?
Our ability to migrate means that urban places can suffer while urban people continue to prosper. Within the New York City metropolitan area, New Jersey employment centers may gain if Southern Manhattan and Wall Street are under siege from sea level rise. Land owners in Southern Manhattan will suffer but workers at downtown Goldman Sachs would not.
Does this same optimism hold in the developing world? In the United States, there are a large number of cities scattered across various geographical regions. In other nations such as Bangladesh, there is unlikely to be the same menu to choose from. As “environmental refugees” seek out safer havens they may cross political boundaries into nations where they are not welcome. Developed countries could ease adaptation in the developing world if they loosen immigration restrictions. Migration also represents an upfront investment that requires resources. The poorest of the poor may be unable to move and not to have the information or social networks concerning potential beneficial destinations.
Not all is bleak here. Self interested migrants have the right incentives to seek out cities offering them jobs and opportunities. Cities with a growing upper middle class gain when low skilled workers enter as this makes basic services more affordable. There are gains to trade across income groups in the city as the less skilled provide time intensive services such as cooking and cleaning and gardening. Urban growth offers such migrants the opportunity to increase their household income and their children’s educational prospects. My grandfather arrived in Ellis Island in the 1920s from Poland with a 5th grade education and his son (my father) went to medical school. Such “Horatio Alger” transitions will continue to take place.
Optimists can point to Japan, South Korea and recent poverty reduction in China and India as examples of the sharp growth that can take place as economies open up to global markets. Do not forget your Law of 72. A nation whose income grows at 4% per year doubles its per-capita income in 18 years. Cities foster growth through trade and specialization. As urbanites in LDC cities grow richer, they will eat a better diet, live in better housing and be able to afford electricity and durables that we take for granted. Each of these choices will enhance their ability to adapt to climate change.
In the developing world, most of the migration induced by climate change will be poor farmers choosing to move to cities. For many farmers, climate change may make farming so unprofitable that they choose to try their luck in the cities. As the urban poor’s count rises in such mega-cities, local rents will rise and the low skill wages will fall due to competition. How rural to urban migration affects a city’s income inequality and overall well being for the poor will be an important research future topic.