The Controversy over Climate Change and Global Warming - Article Example

report by the World Bank warning that the planet is on track of having a global mean of 4 degrees Celsius that are above the pre-industrial levels by 2100. Klaus Desmet of the Universidad Carlos II in Madrid as well as Esteban Rossi-Hansberg of Princeton University in their working paper are wondering whether there are ways of managing the impact of changing weather patterns by moving the location of economic activity. These writers note that about 90% of global production makes use of only 10% of the land available. When that 10% is threatened, activity may at least theoretically shift to bits of the 90% made more hospitable by climate change.

Thus Messrs Desmet and Rossi-Hansberg created a model economy and battered it with various temperature rises to gauge its reaction. In this analysis, the two writers allow people to move around as they want in this response. In worst situations, freedom from movement does not make much difference since temperatures lead to a reduction of global agricultural productivity to almost zero, meaning “the end of human life on earth”. Nevertheless, in more moderate situations, rising global temperatures enhance agricultural productivity in northerly climes. Restrictions on movement on the other hand, dramatically increase the cost of welfare. This model is simplistic and suggests that limits on migration have a huge impact on global warming costs. Mr. Mathew Kahn (University of California) claims that the warming of the climate will lead vulnerable areas such as lower Manhattan to become less desirable to rival centers such as New York’s suburbs, Manhattan and Chicago. It is therefore important that rational firms and workers assess the dangers of floods or such and migrate, to raise the productivity of the destination locations as they appear. This move would come with its costs and investors in places such as lower Manhattan property would for instance suffer big losses. Nevertheless, Mr. Kahn argues that there may also be gains as activity shifts from ancient cities to more modernized areas.