By Matthew Kahn
In Climatopolis, I argue that urban growth will help us to adapt to climate change. Cities make us richer (due to trade, learning and specialization) and income will help people to adapt to the challenge of climate change. Productivity in cities takes place indoors and is more immune to climate conditions than agriculture. This new paper provides some evidence in favor of my broad hypothesis. The "Dream Team" of Burgess, Deschenes, Donaldson and Greenstone report that; "We also show that hot and dry weather depresses agricultural output and wages, and raises agricultural prices, in rural areas|. but that similar effects are absent in urban areas. Using the coeffi cients from our analysis of Indian districts combined with two leading models of climate change we demonstrate that the mortality increasing impacts of global warming are likely to be far more strongly felt by rural Indians relative to their counterparts in urban India or the US."
So, this suggests that India’s best strategy for reducing climate change impacts is to have its population urbanize. Which cities should they move to? That’s up to them. Abstracting from local congestion and pollution, the invisible hand will guide this rural to urban migration and the household’s optimal choice will mirror where a benevolent planner would have sent.
To quote the authors;
"Put simply, hot weather is a major source of excess mortality in India but not in the US. The results we uncover suggest weather in India kills by denting agricultural incomes via the interruptions it imposes on agricultural production and employment. We observe no effect of weather on death in urban areas of India. This is true even for infants".
The Authors Conclude
"The effects of weather on death, in short, are highly unequal even within a single country. This in turn suggests that the effects of climate change will be highly unequal. Using the coefficients from our analysis of Indian districts combined with two leading models of climate change we con rm this by demonstrating that the mortality increasing impacts of global warming will be far more keenly felt by rural Indians relative to their counterparts in urban India or the US."
Now, as India grows richer must agriculture be harmed by heat waves? I don’t think this is a law of physics. Forward looking farmers who have increased access to capital markets have the right incentives to think through what investments they can make to reduce the impacts of heat waves and other climate change induced shocks on their yields.