Making Money from Climate Change

Tip to reader Fred for pointing it out to me, but the current issue of The Atlantic has a highly provocative look at global warming winners and losers. In other words, how do you make money from climate change?

While the piece itself is only available at the newsstands or to subscribers, you can read the attached interview with writer Gregg Easterbrook, and you’ll get the gist:

Early in this article you ask, “If the world warms, who will win? Who will lose?” But even the winners in this equation would seem to face grave risks. The Inuit of Canada may come to own valuable ports, for instance, but their traditional ways of feeding themselves and making a living will be decimated as the animals they hunt disappear. I suspect many people will consider the question and answer, “We will all lose.”

No, I don’t think so. In economics we don’t find many zero sum games and I don’t think this is a zero sum game. I think a lot of people and nations will come out ahead. The Inuit–the little semi-nation of Nunavut–is going to become significantly more valuable in a warming world. Right now Nunavut’s a frozen wasteland. I would love to be the guy with the Nunavut promotion account twenty years from now because I’m going to rechristen the place “the gateway to the hemispheres” and invite celebrities, and cruise ships will be stopping by, and the sign on the dock will say, “Welcome to Nunavut, Gateway to the Hemispheres!” We’ll see all kinds of wild economic activity up there. There will be change, yes. The traditional way of life will fade and be replaced with something else, maybe something zany, but change seems an inevitability of human experience. Really no society on earth, maybe the ones in the Amazon basin are the only exception, has been able to insulate itself from change. We can’t insulate ourselves from it and I doubt the Inuit will ever be able to do that, either.


  1. Mr Easterbrook’s comments about Nunavut don’t make me want to read more of his material. Does falling through melting ice when you hunt for food sound like an economic gain to any sane person?

  2. What I am more worried about is that he doesn’t seem to understand what a zero-sum game is. If, for example, the earth is hit by a sufficiently large asteroid and every life form on the planet dies, then that is NOT a zero-sum game, it is a everybody-loses game (not counting non-Earth life forms who can now colonize the solar system without worrying about imperialist humans.)
    On the other hand, if global warming makes Nunavut 15C warmer on average WHILE drowning everyone in Bangladesh, then I guess that could be considered a zero sum game. When one party benefits only by someone else being hurt, that is a zero sum.
    Of course, that example isn’t really a zero sum game either – there are about 30,000 people in Nunavut, and while they may enjoy being a new cruise ship destination, I am not sure the deaths/displacement of 150,000,000 Bengalis doesn’t (pun intended) kind of swamp the benefits accruing to Nunavut and its citizens.
    If we accept the global warming hypothesis, then the likely outcomes in the near term are probably a losing game. The population of the world has settled where it has according to current climactic conditions. If those conditions change then human habitation will eventually react and adapt to the new conditions and find a new modus vivendi. But the transition period will have frictional costs that are likely measured in the trillions of dollars and billions of lives disrupted or lost.

  3. Nicely put Duncan. I had a similar reaction to his somewhat glib usage of “zero-sum”, and you’ve picked a pithy example. Not having read the entire piece perhaps it’s more cogent, but I have only the associated interview to go by.

  4. I thought you would have learned your lesson about global warming postings! Glad you were brave enough to venture back in though. I agree with the premise of the original interview and with Duncan’s last paragraph, and I’ve posted my own hypothesis regarding ramifications to the global insurance industry. This WILL happen, regardless of attempts to stop it, so why waste all of our resources trying? Just accept it, plan for it, adapt to it, know that 30 million people won’t drown (this is a gradual, decades-long process, not a tsunami), and watch T. Boone Pickens start buying up future ocean-front property in the Hill Country of central Texas for when the plains of Texas eventually become submerged under the ocean as they were 50 million years ago. Bring it on.

  5. Look for the next best thing and make your move. Make money fast. Make money online

  6. On the other hand, where are the denialists seeking to profit from *no* global warming / climate change? The people investing in ski resorts in Europe, beachfront property on current coastlines, etc.

  7. Max Anacker says:

    It’s true that some will win and some will lose if climate change really does occur. But we really can’t do anything about it, anyway.
    To seriously believe all the hype that man is causing a climate disaster that will destroy the planet is not only basically stupid, it is extremely arrogant.
    We insignificant humans do not have the power to destroy this planet. Never did.
    We also do not have the ability to change the current climate trends, or even to accurately forecast what is going to happen over the next 10 let alone 100 years.
    Let’s hope things will get warmer, rather than colder. We don’t need another ice age.
    Forget all the junk science by so-called experts that are all in on the multi-billion dollar “climate research scam”.
    Forget all the disaster reports being sold by environmental activists via the sensationalist media.
    Forget all the self-righteous calls for action by power-hungry politicians.
    Use your common sense. It’s all a hoax.