Thongchai Thailand

Climate Change & Income Inequality

Posted on: April 25, 2019

bandicam 2019-04-25 15-33-37-018

bandicam 2019-04-25 15-34-14-151

 

 

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FIGURE 1: LOW LATITUDE COUNTRIES IN THE SAMPLELOW-LATITUDE

 

FIGURE 2: HIGH LATITUDE COUNTRIES IN THE SAMPLEHIGH-LATITUDE

 

FIGURE 3: LOW LATITUDE PER CAPITA GDP 1960-1980: COOLINGlow-gdp-cooling

 

FIGURE 4: HIGH LATITUDE PER CAPITA GDP 1960-1980: COOLINGhigh-gdp-cooling

 

FIGURE 5: INCOME INEQUALITY 1960-1980: COOLINGinequality-cooling

 

FIGURE 6: LOW LATITUDE PER CAPITA GDP 1981-2017: WARMINGlow-gdp-warming

 

FIGURE 7: HIGH LATITUDE PER CAPITA GDP 1981-2017: WARMINGhigh-gdp-warming

 

FIGURE 8: INCOME INEQUALITY 1981-2017: WARMINGinequality-warming

 

FIGURE 9: LOW LATITUDE %GDP GROWTH FULL SPAN 1960-2017LOWLATGROWTH

 

FIGURE 10: HIGH LATITUDE %GDP GROWTH FULL SPAN 1960-2017HIGHLATGROWTH

 

FIGURE 11: GROWTH INEQUALITY FULL SPAN 1960-2017PCTGROWTHINEQUALITY

 

 

  1. Climate scientists published a paper in 2019 with the finding that climate change causes income inequality between hot low latitude countries, eg India, and cool high latitude countries, eg Sweden.  (CITATION: Global warming has increased global economic inequality, Noah S. Diffenbaugh, Marshall Burke, Proceedings of the National Academy of Sciences Apr 2019, 201816020). The income inequality is shown as an increasing spread between per capital GDP between the cool rich country and the hot poor country. The abstract appears below in the next paragraph. The full text of the paper may be downloaded from an online archive [LINK]
  2. The ABSTRACT of the article states as follows: Understanding the causes of economic inequality is critical for achieving equitable economic development. To investigate whether global warming has affected the recent evolution of inequality, we combine counterfactual historical temperature trajectories from a suite of global climate models with extensively replicated empirical evidence of the relationship between historical temperature fluctuations and economic growth. Together, these allow us to generate probabilistic country-level estimates of the influence of anthropogenic climate forcing on historical economic output. We find very high likelihood that anthropogenic climate forcing has increased economic inequality between countries. For example, per capita gross domestic product (GDP) has been reduced 17–31% at the poorest four deciles of the population-weighted country-level per capita GDP distribution, yielding a ratio between the top and bottom deciles that is 25% larger than in a world without global warming. As a result, although between-country inequality has decreased over the past half century, there is ∼90% likelihood that global warming has slowed that decrease. The primary driver is the parabolic relationship between temperature and economic growth, with warming increasing growth in cool countries and decreasing growth in warm countries. Although there is uncertainty in whether historical warming has benefited some temperate, rich countries, for most poor countries there is >90% likelihood that per capita GDP is lower today than if global warming had not occurred. Thus, our results show that, in addition to not sharing equally in the direct benefits of fossil fuel use, many poor countries have been significantly harmed by the warming arising from wealthy countries’ energy consumption.
  3. The authors also provide a summary about the significance of their finding as follows: SIGNIFICANCE: We find that global warming has very likely exacerbated global economic inequality, including ∼25% increase in population-weighted between-country inequality over the past half century. This increase results from the impact of warming on annual economic growth, which over the course of decades has accumulated robust and substantial declines in economic output in hotter, poorer countries—and increases in many cooler, wealthier countries—relative to a world without anthropogenic warming. Thus, the global warming caused by fossil fuel use has likely exacerbated the economic inequality associated with historical disparities in energy consumption. Our results suggest that low-carbon energy sources have the potential to provide a substantial secondary development benefit, in addition to the primary benefits of increased energy access.
  4. The essence of the argument is that global warming is inherently unfair in terms of per capital GDP because the per capita GDP of the rich temperature countries that are mostly to blame for fossil fuel emissions face a lesser impact of climate change than the per capita GDP of poor equatorial countries where it is hot. This unequal and unfair impact of climate change therefore results in a rising wealth gap between the rich industrialized temperate countries like Sweden and the poor struggling countries like India located in the hotter equatorial zone of the planet.
  5. This post is a test of the this income inequality hypothesis. The data are per capita GDP values for all countries 1960 to 2017 provided by the World Bank. Two samples of countries are taken from the World Bank dataset. A large sample of hot equatorial countries is taken with absolute value of latitude from Φ=0 to Φ=25. A smaller sample of rich industrialized temperate countries is take at the higher latitudes of Φ=46 (France) to Φ=64 (Finland). The selected countries are listed above in Figure 1 and Figure 2.
  6. The sample period of the GDP data, 1960 to 2017, includes a period of cooling 1960-1980 and a period of warming thereafter 1981-2017. In Figure 3, Figure 4, and Figure 5, we use the per capital GDP data for the hot low latitude countries and the cool high latitude countries in the cooling period 1960-1980 to compute the trend in income inequality. Figure 5 shows a rising trend in the difference between cool rich countries and and hot poor countries.
  7. This comparison is repeated for the warming period 1981-2017 in Figure 6, Figure 7, and Figure 8. We find that the warming period and the cooling period are indistinguishable in terms of growth in income inequality. This result is not consistent with the attribution of the growing difference between the per capita GDP of rich and poor countries to global warming.
  8. This is because of the nature of economic growth in which the richer the country is the more it can invest and therefore the faster it can increase its wealth. Therefore the difference between per capita GDP is not the appropriate metric for this comparison. Instead, the comparison must be made with percent growth in per capita GDP. This comparison is made in Figure 9, Figure 10, and Figure 11. The income inequality displayed in Figure 11 does not show rising income inequality.
  9. CONCLUSION: We conclude that the evidence of rising inequality in the Diffenbaugh 2019 paper cited above is an artifact of the nature of economic growth and not a valid computation of income inequality. We find that when this error is corrected and percent economic growth is compared in Figure 11, no evidence of rising income inequality is found. Therefore, the Diffenbaugh 2019 paper cited above has not shown that climate change has caused rising income inequality between rich cool countries and poor hot countries. The per capita GDP of cool rich countries grows faster than the per capita GDP of hot poor countries not because they are cooler but because they are richer.
  10. For example, if you invest $100,000 in 10-year treasuries at 2.5% and Al Gore invests 1,000,000 in the same instrument. Ten years from now you will have $102,500 and Al will have $1025,000. After the next decade you will have $105,062 and Al Gore will have $1050625 and so on with your income inequality increasing as shown in the chart below. This is why small countries and large countries and poor countries and rich countries can’t be compared on the basis of dollar per capita GDP but must be evaluated on the basis of percent growth.  ALGORE

 

 

 

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