Climate Change: A Simple Punter’s Guide To The Winners And Losers

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Depending on your view, climate change is either a ‘good thing’, or a bad thing. Specifically, a good thing if you’re rich, a bad thing if you’re poor. Dr Terry Russell explains.

It’s hard to find good news about climate change. From 1950 to 2013, the level of carbon dioxide (CO2) in the atmosphere sky-rocketed to 400 parts per million, 30 per cent higher than any other time in human history, and in 2016 it’s risen to 404 parts per million. An October 2016 study found a growing risk of desertification in southern Europe.

But there may be good news for some wealthy countries and wealthy people. All that burning of fossil fuel could be benefitting the rich, at least if they can build high enough walls to keep out all the climate refugees. If we hear someone say ‘climate change is not all bad’, it’s probably because they are in one of the three ‘winning’ groups: geographic winners, business winners and those with coping measures.

 

Geographic winners

Some countries are likely to profit from climate change. Countries in the far northern hemisphere are likely to benefit from longer growing seasons, improved fishing and more efficient shipping routes through an ice-free Arctic.

Russian scholars have projected that, as the climate warms, “at least half of central Siberia would be occupied by steppe and forest-steppe that may become suitable for agriculture”. Similarly in Nuuk in Greenland, farmers are now harvesting crops never before possible, like potatoes, radishes and broccoli.

Fishing villages in the far northern hemisphere are pleased that less ice means boats can fish closer to shore year round, and that some new fish species are arriving from further south. Harbour towns like Hofn in Iceland are expecting economic growth as melting ice opens the Northwest Passage to increased shipping traffic.

Sunset on Hofn harbour, Iceland. (IMAGE: Emmanuel Milou, Flickr)
Sunset on Hofn harbour, Iceland. (IMAGE: Emmanuel Milou, Flickr)

But even bigger economic gains are in oil, especially for Arctic nations like Russia, Norway, the United States (through one of its states, Alaska) and Canada.

Oil companies are excited at the prospect of increased oil exploration in and near the Arctic as melting ice reduces the cost of exploration. Just one part of the Arctic, the Chukchi Sea, is estimated to hold at least 132 trillion cubic feet of natural gas and 27 billion barrels of oil.

Russia’s state-owned oil company Rosneft and US ExxonMobil were planning a jaw-dropping joint investment of $500 billion in the Arctic and Black Sea Region before political disputes arose in late 2014.

Today, Russian drilling and military build-up in the Russian Arctic is increasing rapidly, while US oil companies are pressuring President Obama to approve a five-year plan for offshore drilling in Alaska.

 

Business winners

Across the globe, some businesses are likely to profit from climate change. One newspaper notes that climate change adaptation will require large-scale infrastructure changes – such as building defences to protect against sea-level rise or improving the quality of road surfaces to withstand hotter temperatures.

It will also require farmers to plant different crops and households and businesses to buy more insurance. That’s good news for businesses that build sea walls, canals and tougher road surfaces, along with businesses that sell agricultural seeds.

It’s also good news for insurance companies. In fact, a 2016 World Bank paper was bullish about the rising role of insurance companies in climate change adaptation.

Well actually the 108-page paper about disasters such as floods and hurricanes only managed to mention ‘climate change’ five times, but it mentioned ‘insurance’ over 100 times before even reaching chapter 5, called Finance is The Glue.

Unlike many fossil fuel companies which are still funding propaganda to undermine climate science, insurance companies like AXA have accepted that climate change is happening and that reducing fossil fuel consumption can slow climate change.

However, their CEO has referred to climate change, “Both as a risk and as an opportunity.” The World Bank and AXA know that insurance companies can be winners from climate change.

The World Bank Headquarters, in Washington DC. (IMAGE: World Bank Photo Collection, Flickr)
The World Bank Headquarters, in Washington DC. (IMAGE: World Bank Photo Collection, Flickr)

There are also businesses that benefit from climate change indirectly, by maintaining high demand for fossil fuels, whose extraction and burning contribute greatly to the problem in the first place.

Five of the world’s largest 10 companies by revenue are fossil fuel companies. To protect their profits, some fossil fuel companies are also major contributors to clouding the climate change debate. They do this by funding false science, lobbyists and key politicians who are climate change deniers.

The National Center for Policy Analysis, a think-tank which has argued that polar bears ‘need broken ice’, is bankrolled by US oil tycoons David and Charles Koch. Similarly, Exxon is estimated to have pumped about $22m into research and activist groups promoting disinformation about global warming since 1998.

There has been change since 2014, with oil behemoths like BP and Royal Dutch Shell conceding climate change is real and announcing plans to invest in renewable energy, but cynics note that fossil fuel companies can still benefit from blocking and delaying climate protection legislation.

As recently as 2016, a number of recently bankrupt US coal mining companies (Peabody, Arch Coal and Alpha Natural Resources) have been found to have had debts to high profile climate change deniers.

 

Those with resources to cope

As climate change leads to increasingly extreme weather, some of the proposed adaptions are infrastructure improvements to protect against floods and hurricanes, climate resilient seeds, access to personal savings or insurance, and new technologies for water and soil conservation.

These are feasible solutions if you have money. Most people in developed countries will be able to access these adaptions by paying directly or through the services of relatively competent, well-funded governments. Most people in developing countries will struggle to access these adaptions.

As climate change leads to increasingly extreme weather, another form of adaptation is migration. Indeed, this has already begun happening.

A file image of Syrian refugees.
A file image of Syrian refugees.

A drought in Syria in 2006-2011 and the ongoing expansion of the Sahara desert are contributing to conflict and poverty in those areas. This, along with the war in Syria, led to increased migration to Europe. Whilst developed countries have generally been warm and welcoming to migrants with sought-after skills or big bank accounts, the perceived influx of unskilled migrants was a major reason for the Brexit campaign earlier this year.

Developed countries have generally been less warm and welcoming to the poor.

 

The losers

The biggest non-winners are the people who flit across our television screens as refugees, disaster victims and subsistence farmers – the world’s poor. They do not have a seat in the powerful global forums alongside well-dressed politicians, financiers, and oil company executives. So here are some of their voices:

“In our country, farmers do not have control over the supply of seeds… Things become particularly difficult after natural calamities.” – Farida, Bangladesh

“The weather is abnormal, it’s not really following the pattern as we have seen before… I feel scared about it. And even our children too are often scared. Because it’s beyond our reach, what we are going to do about it.” – Peter Wate, Solomon Islands

The poor are steadily finding ways to adapt to climate change. Farida in Bangladesh is organising a seed bank – a different kind of insurance to that envisaged by the World Bank.

Peter Wate and other villagers have relocated to a nearby island after their own, Walande Island, was inundated by the rising sea level.

Iraqi children look out at the sunset over the Bamarne informal camp for Internally Displaced Persons, in northern Iraq. (IMAGE: DFID, Flickr)
Iraqi children look out at the sunset over the Bamarne informal camp for Internally Displaced Persons, in northern Iraq. (IMAGE: DFID, Flickr)

But another way to adapt is to emigrate. This will be a growing issue as desertification, rising sea levels, floods, pestilences and hurricanes displace tens of millions.

Way back in 2003, a US Government-commissioned study described the following scenario as plausible: “Nations with the resources to do so may build virtual fortresses around their countries, preserving resources for themselves.”

From this ‘fortress’ point of view, Australia’s ‘turning back the boats’, the UK’s withdrawal from the European Union and Donald Trump’s plans to build a wall across the Mexican border are just trial runs for ‘dealing with’ the impending hordes of climate refugees in the future.

The countries that created the climate catastrophe are planning to avoid its worst effects simply by closing their gates to the poor.

 

WEALTHY individuals may be able to buffer the impacts of climate change by building stronger homes, spending large portions of their incomes on new hi-tech seeds and insurance packages, and flying off to greener countries.

Wealthy countries may be able to build high enough walls to keep out climate refugees, reducing refugees to fleeting images on the television.

But there’s a solution that’s far less risky and far more inclusive.

In the COP22 climate change talks in Morocco this month, we could close the gates on fossil fuel lobbyists instead of the poor.

We could redesign our economic system, with strong incentives to get carbon dioxide levels in the atmosphere back down far below 400 parts per million.

* Dr Terry Russell has previously worked in humanitarian responses in post-conflict societies (East Timor, Aceh) and communities affected by floods and earthquakes (Jakarta, West Sumatra). He currently works as an international aid practitioner for ABM in Australia but the above thoughts are purely his own.

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Terry Russell

Terry Russell was John Hirst’s student at La Trobe University in 1992 and remained a personal friend thereafter. He worked in East Timor between 1999 and 2002 and is currently Sydney-based, working for an Australian NGO.

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