The biophysical changes occurring due to global warming are also reallocating global wealth in unpredictable - and potentially destabilizing - ways, suggested a new study.
"People are mostly focused on the physical reallocation of these assets, but I don't think we've really started thinking enough about how climate change can reallocate wealth and influence the prices of those assets," said lead author Eli Fenichel from the Yale School of Forestry and Environmental Studies.
‘The biophysical changes occurring due to global warming are also reallocating global wealth in unpredictable and potentially destabilizing ways.’
"We think these price impacts can be really, really important," Fenichel added.
The study, published in the Nature Climate Change
, suggests the impacts on net global wealth may not be that straightforward. In fact, changes are more likely than not to produce an overall net loss in global wealth.
Fenichel said, "The reason is the inevitable and unpredictable price impacts in places where the quantities of fish stocks increase depending on the quality of its resource management, existing institutions, and fishing regulations. We don't know how this will unfold, but we do know there will be price effects. It's just Economics 101 - prices reflect quantity and scarcity and natural capital is hard for people to move. It's as inevitable as the movement of these fish species."
"These impacts on the value of natural capital highlight the need for coherent climate policies that integrate biophysical and social measurements," the study said.