Global Warming: Who Loses—and Who Wins? : Land

Real estate might be expected to appreciate steadily in value during the 21st century, given that both the global population and global prosperity are rising. The supply of land is fixed, and if there’s a fixed supply of something but a growing demand, appreciation should be automatic. That’s unless climate change increases the supply of land by warming currently frosty areas while throwing the amount of desirable land into tremendous flux. My hometown of Buffalo, New York, for example, is today so déclassé that some of its stately Beaux-Arts homes, built during the Gilded Age and overlooking a park designed by Frederick Law Olmsted, sell for about the price of one-bedroom condos in Boston or San Francisco. If a warming world makes the area less cold and snowy, Buffalo might become one of the country’s desirable addresses.
At the same time, Arizona and Nevada, blazing growth markets today, might become unbearably hot and see their real-estate markets crash. If the oceans rise, Florida’s rapid growth could be, well, swamped by an increase in its perilously high groundwater table. Houston could decline, made insufferable by worsened summertime humidity, while the splendid, rustic Laurentide Mountains region north of Montreal, if warmed up a bit, might transmogrify into the new Poconos.
These are just a few of many possible examples. Climate change could upset the applecarts of real-estate values all over the world, with low-latitude properties tanking while high latitudes become the Sun Belt of the mid-21st century.
Local changes in housing demand are only small beer. To consider the big picture, examine a Mercator projection of our planet, and observe how the Earth’s landmasses spread from the equator to the poles. Assume global warming is reasonably uniform. (Some computer models suggest that warming will vary widely by region; for the purposes of this article, suffice it to say that all predictions regarding an artificial greenhouse effect are extremely uncertain.) The equatorial and low-latitude areas of the world presumably will become hotter and less desirable as places of habitation, plus less valuable in economic terms; with a few exceptions, these areas are home to developing nations where living standards are already low.
So where is the high-latitude landmass that might grow more valuable in a warming world? By accident of geography, except for Antarctica nearly all such land is in the Northern Hemisphere, whose continents are broad west-to-east. Only a relatively small portion of South America, which narrows as one travels south, is high latitude, and none of Africa or Australia is. (Cape Town is roughly the same distance from the equator as Cape Hatteras; Melbourne is about the same distance from the equator as Manhattan.) More specifically, nearly all the added land-value benefits of a warming world might accrue to Alaska, Canada, Greenland, Russia, and Scandinavia.

Gregg Easterbrook is an Atlantic contributing editor, a visiting fellow at the Brookings Institution, and the author of The Progress Paradox (2003



This raises the possibility that an artificial greenhouse effect could harm nations that are already hard pressed and benefit nations that are already affluent. If Alaska turned temperate, it would drive conservationists to distraction, but it would also open for development an area more than twice the size of Texas. Rising world temperatures might throw Indonesia, Mexico, Nigeria, and other low-latitude nations into generations of misery, while causing Canada, Greenland, and Scandinavia to experience a rip-roarin’ economic boom. Many Greenlanders are already cheering the retreat of glaciers, since this melting stands to make their vast island far more valuable. Last July, The Wall Street Journal reported that the growing season in the portion of Greenland open to cultivation is already two weeks longer than it was in the 1970s.
And Russia! For generations poets have bemoaned this realm as cursed by enormous, foreboding, harsh Siberia. What if the region in question were instead enormous, temperate, inviting Siberia? Climate change could place Russia in possession of the largest new region of pristine, exploitable land since the sailing ships of Europe first spied the shores of what would be called North America. The snows of Siberia cover soils that have never been depleted by controlled agriculture. What’s more, beneath Siberia’s snow may lie geologic formations that hold vast deposits of fossil fuels, as well as mineral resources. When considering ratification of the Kyoto Protocol to regulate greenhouse gases, the Moscow government dragged its feet, though the treaty was worded to offer the Russians extensive favors. Why might this have happened? Perhaps because Russia might be much better off in a warming world: Warming’s benefits to Russia could exceed those to all other nations combined.
Of course, it could be argued that politicians seldom give much thought—one way or the other—to actions whose value will become clear only after they leave office, so perhaps Moscow does not have a grand strategy to warm the world for its own good. But a warmer world may be much to Russia’s liking, whether it comes by strategy or accident. And how long until high-latitude nations realize global warming might be in their interests? In recent years, Canada has increased its greenhouse-gas output more rapidly than most other rich countries. Maybe this is a result of prosperity and oil-field development—or maybe those wily Canadians have a master plan for their huge expanse of currently uninhabitable land.
Global warming might do more for the North, however, than just opening up new land. Temperatures are rising on average, but when are they rising? Daytime? Nighttime? Winter? Summer? One fear about artificially triggered climate change has been that global warming would lead to scorching summer-afternoon highs, which would kill crops and brown out the electric power grid. Instead, so far a good share of the warming—especially in North America—has come in the form of nighttime and winter lows that are less low. Higher lows reduce the harshness of winter in northern climes and moderate the demand for energy. And fewer freezes allow extended growing seasons, boosting farm production. In North America, spring comes ever earlier—in recent years, trees have flowered in Washington, D.C., almost a week earlier on average than a generation ago. People may find this creepy, but earlier springs and milder winters can have economic value to agriculture—and lest we forget, all modern societies, including the United States, are grounded in agriculture.
If a primary impact of an artificially warmed world is to make land in Canada, Greenland, Russia, Scandinavia, and the United States more valuable, this could have three powerful effects on the 21st-century global situation.
First, historically privileged northern societies might not decline geopolitically, as many commentators have predicted. Indeed, the great age of northern power may lie ahead, if Earth’s very climate is on the verge of conferring boons to that part of the world. Should it turn out that headlong fossil-fuel combustion by northern nations has set in motion climate change that strengthens the relative world position of those same nations, future essayists will have a field day. But the prospect is serious. By the middle of the 21st century, a new global balance of power may emerge in which Russia and America are once again the world’s paired superpowers—only this time during a Warming War instead of a Cold War.
Second, if northern societies find that climate change makes them more wealthy, the quest for world equity could be dealt a huge setback. Despite the popular misconception, globalized economics have been a positive force for increased equity. As the Indian economist Surjit Bhalla has shown, the developing world produced 29 percent of the globe’s income in 1950; by 2000 that share had risen to 42 percent, while the developing world’s share of population rose at a slower rate. All other things being equal, we might expect continued economic globalization to distribute wealth more widely. But if climate change increases the value of northern land and resources, while leaving nations near the equator hotter and wracked by storms or droughts, all other things would not be equal.
That brings us to the third great concern: If climate change causes developing nations to falter, and social conditions within them deteriorate, many millions of jobless or hungry refugees may come to the borders of the favored North, demanding to be let in. If the very Earth itself turns against poor nations, punishing them with heat and storms, how could the United States morally deny the refugees succor?
Shifts in the relative values of places and resources have often led to war, and it is all too imaginable that climate change will cause nations to envy each other’s territory. This envy is likely to run both north-south and up-down. North-south? Suppose climate change made Brazil less habitable, while bringing an agreeable mild clime to the vast and fertile Argentinean pampas to Brazil’s south. São Paulo is already one of the world’s largest cities. Would a desperate, overheated Brazil of the year 2037—its population exploding—hesitate to attack Argentina for cool, inviting land? Now consider the up-down prospect: the desire to leave low-lying areas for altitude. Here’s an example: Since its independence, in 1947, Pakistan has kept a hand in the internal affairs of Afghanistan. Today Americans view this issue through the lens of the Taliban and al-Qaeda, but from Islamabad’s perspective, the goal has always been to keep Afghanistan available as a place for retreat, should Pakistan lose a war with India. What if the climate warms, rendering much of Pakistan unbearable to its citizens? (Temperatures of 100-plus degrees are already common in the Punjab.) Afghanistan’s high plateaus, dry and rocky as they are, might start looking pleasingly temperate as Pakistan warms, and the Afghans might see yet another army headed their way.

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.