Global Warming: Who Loses—and Who Wins?
A warming climate could cause other landgrabs on a national scale. Today Greenland is a largely self-governing territory of Denmark that the world leaves in peace because no nation covets its shivering expanse. Should the Earth warm, Copenhagen might assert greater jurisdiction over Greenland, or stronger governments might scheme to seize this dwarf continent, which is roughly three times the size of Texas. Today Antarctica is under international administration, and this arrangement is generally accepted because the continent has no value beyond scientific research. If the world warmed for a long time—and it would likely take centuries for the Antarctic ice sheet to melt completely—international jockeying to seize or conquer Antarctica might become intense. Some geologists believe large oil deposits are under the Antarctic crust: In earlier epochs, the austral pole was densely vegetated and had conditions suitable for the formation of fossil fuels.
And though I’ve said to this point that Canada would stand to become more valuable in a warming world, actually, Canada and Nunavut would. For centuries, Europeans drove the indigenous peoples of what is now Canada farther and farther north. In 1993, Canada agreed to grant a degree of independence to the primarily Inuit population of Nunavut, and this large, cold region in the country’s northeast has been mainly self-governing since 1999. The Inuit believe they are ensconced in the one place in this hemisphere that the descendants of Europe will never, ever want. This could turn out to be wrong.
For investors, finding attractive land to buy and hold for a warming world is fraught with difficulties, particularly when looking abroad. If considering plots on the pampas, for example, should one negotiate with the current Argentinian owners or the future Brazilian ones? Perhaps a safer route would be the contrarian one, focused on the likelihood of falling land values in places people may leave. If strict carbon-dioxide regulations are enacted, corporations will shop for “offsets,” including projects that absorb carbon dioxide from the sky. Growing trees is a potential greenhouse-gas offset, and can be done comparatively cheaply in parts of the developing world, even on land that people may stop wanting. If you jump into the greenhouse-offset business, what you might plant is leucaena, a rapidly growing tree species suited to the tropics that metabolizes carbon dioxide faster than most trees. But you’ll want to own the land in order to control the sale of the credits. Consider a possible sequence of events: First, climate change makes parts of the developing world even less habitable than they are today; then, refugees flee these areas; finally, land can be snapped up at Filene’s Basement prices—and used to grow leucaena trees.
If Al Gore’s movie, An Inconvenient Truth, is to be believed, you should start selling coastal real estate now. Gore’s film maintains that an artificial greenhouse effect could raise sea levels 20 feet in the near future, flooding Manhattan, San Francisco, and dozens of other cities; Micronesia would simply disappear below the waves. Gore’s is the doomsday number, but the scientific consensus is worrisome enough: In 2005, the National Academy of Sciences warned that oceans may rise between four inches and three feet by the year 2100. Four inches may not sound like a lot, but it would imperil parts of coastal Florida and the Carolinas, among other places. A three-foot sea-level rise would flood significant portions of Bangladesh, threaten the national survival of the Netherlands, and damage many coastal cities, while submerging pretty much all of the world’s trendy beach destinations to boot. And the Asian Tigers? Shanghai and Hong Kong sit right on the water. Raise the deep a few feet, and these Tiger cities would be abandoned.
The global temperature increase of the last century—about one degree Fahrenheit—was modest and did not cause any dangerous sea-level rise. Sea-level worries turn on the possibility that there is some nonlinear aspect of the climate system, a “tipping point” that could cause the rate of global warming to accelerate markedly. One reason global warming has not happened as fast as expected appears to be that the oceans have absorbed much of the carbon dioxide emitted by human activity. Studies suggest, however, that the ability of the oceans to absorb carbon dioxide may be slowing; as the absorption rate declines, atmospheric buildup will happen faster, and climate change could speed up. At the first sign of an increase in the rate of global warming: Sell, sell, sell your coastal properties. Unload those London and Seattle waterfront holdings. Buy land and real property in Omaha or Ontario.
An artificial greenhouse effect may also alter ocean currents in unpredictable ways. Already there is some evidence that the arctic currents are changing, while the major North Atlantic current that moves warm water north from the equator may be losing energy. If the North Atlantic current falters, temperatures could fall in Europe even as the world overall warms. Most of Europe lies to the north of Maine yet is temperate because the North Atlantic current carries huge volumes of warm water to the seas off Scotland; that warm water is Europe’s weathermaker. Geological studies show that the North Atlantic current has stopped in the past. If this current stops again because of artificial climate change, Europe might take on the climate of present-day Newfoundland. As a result, it might depopulate, while the economic value of everything within its icy expanse declines. The European Union makes approximately the same contribution to the global economy as the United States makes: Significantly falling temperatures in Europe could trigger a worldwide recession.
While staying ready to sell your holdings in Europe, look for purchase opportunities near the waters of the Arctic Circle. In 2005, a Russian research ship became the first surface vessel ever to reach the North Pole without the aid of an icebreaker. If arctic sea ice melts, shipping traffic will begin transiting the North Pole. Andrew Revkin’s 2006 book, The North Pole Was Here, profiles Pat Broe, who in 1997 bought the isolated far-north port of Churchill, Manitoba, from the Canadian government for $7. Assuming arctic ice continues to melt, the world’s cargo vessels may begin sailing due north to shave thousands of miles off their trips, and the port of Churchill may be bustling. If arctic polar ice disappears and container vessels course the North Pole seas, shipping costs may decline—to the benefit of consumers. Asian manufacturers, especially, should see their costs of shipping to the United States and the European Union fall. At the same time, heavily trafficked southern shipping routes linking East Asia to Europe and to America’s East Coast could see less traffic, and port cities along that route—such as Singapore—might decline. Concurrently, good relations with Nunavut could become of interest to the world’s corporations.
Oh, and there may be oil under the arctic waters. Who would own that oil? The United States, Russia, Canada, Norway, and Denmark already assert legally complex claims to parts of the North Pole seas—including portions that other nations consider open waters not subject to sovereign control. Today it seems absurd to imagine the governments of the world fighting over the North Pole seas, but in the past many causes of battle have seemed absurd before the artillery fire began. Canada is already conducting naval exercises in the arctic waters, and making no secret of this.
Then again, perhaps ownership of these waters will go in an entirely different direction. The 21st century is likely to see a movement to create private-property rights in the ocean (ocean property rights are the most promising solution to overfishing of the open seas). Private-property rights in the North Pole seas, should they come into existence, might generate a rush to rival the Sooners’ settlement of Oklahoma in the late 1800s.
Gregg Easterbrook is an Atlantic contributing editor, a visiting fellow at the Brookings Institution, and the author of The Progress Paradox (2003).
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