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January 2016, Volume 22, Number 1

Climate Change, Development

World leaders met November 30-December 11, 2015 in Paris to tackle the impacts of human activities on the world's climate that could lead to hard-to-reverse changes. The Intergovernmental Panel on Climate Change recommended that world leaders hold the warming of the earth's temperature to two degrees Celsius (3.6 F) compared with pre-industrial age levels.

The agreement signed in Paris commits 195 countries to reduce their carbon emissions by developing voluntary national emission-reduction plans by 2020 and having them reviewed regularly; the emission-reduction plans are not legally binding. The hope is that country plans will do more to reduce emissions as clean technology improves, so that after 2050 there will fewer carbon-emitting activities.

Industrial countries pledged $100 billion after 2020 to help developing countries to reduce their emissions.

World leaders did not embrace the solution urged by economists, carbon budgets. This involves setting a cap on greenhouse gas emissions and allocating shares of allowable emissions by country and further by sector. Permits to emit can be tradable under cap-and-trade systems, so that market prices would determine the price of emitting a ton of carbon and encourage firms who can reduce emissions at lowest cost to do so.

China is the world's major emitter, followed by the US and India. Developing countries are reluctant to slow economic growth now to benefit future generations who are likely to be richer and to have more technologies at their disposal to cope with climate change. Instead of a carbon budget with binding shares of emissions allocated to countries, 186 countries presented voluntary plans to curb greenhouse gas emissions in Paris during the so-called COP21.

Developing countries led by India oppose plans to reduce their emissions, arguing that they are not responsible for the buildup of greenhouse gas emissions, and that their plans to burn carbon fuels to reduce poverty should not be slowed by the carbon already emitted by today's richer countries. India, which plans to double its burning of coal by 2019 to bring electricity to 300 million more people, says it needs "carbon space" to reduce poverty.

Indonesia is the fourth-largest emitter of greenhouse gases, largely because over six million acres of forest are burned each September-October to clear land for palm oil and paper and pulp plantations; Indonesia produces over half of the world's palm oil. Brazil has sharply reduced deforestation, but Indonesia lost 15 million acres of primary forest between 2000 and 2012.

Climate change could have many effects, leading to more frequent severe storms that threaten coastal cities and prompting prolonged droughts and floods that displace people, especially in poor countries. Will affected people in poor countries migrate to richer ones?

Researchers have speculated about how many people from poorer countries may migrate to richer countries because of climate change. The range is wide, from 50 million to a billon between 2015 and 2050, reflecting varying assumptions about how climate change is likely to affect poor people, how they respond and how destination countries react. One estimate is that an average 26 million people a year were displaced by floods, storms, earthquakes and other natural disasters between 2008 and 2014.

Many economists emphasize that migration, whether rural to urban within countries or from poorer to richer countries, costs money, so that the poorest people in developing countries may not be able to migrate if climate change lowers their incomes, that is, there is a difference between the need to migrate and the ability to migrate. Less-poor people adversely affected by climate change are more likely to migrate because they can afford to do so. Climate change could spur more migration from middle-income developing countries in Northern Africa before affecting migration patterns in sub-Saharan Africa.

Development. Most of today's rich countries began as agricultural societies and industrialized, drawing workers from agriculture to staff assembly lines in factories before shifting workers to services such as health care and finance. In Europe and Japan, per capita income was about $25,000 when the manufacturing share of employment peaked at 25 percent in the 1960s and 1970s.

In the US, manufacturing employment peaked at 26 percent of US workers in 1953, when per capita income was $17,000 in 2015 dollars. US manufacturing today employs nine percent of US workers.

In Mexico and China, per capita income was lower, about $10,000, when the manufacturing share of employment peaked at 20 percent. Indian per capita income is even lower, about $3,300 at PPP, and the manufacturing share of employment began falling from a peak of 20 percent in the 1990s toward 15 percent today. Between 2005 and 2012, India's labor force rose by 55 million, and the country created an additional six million manufacturing and 21 million service jobs.

Where will the youth entering the labor force in India and Africa find jobs if there are few factories? A combination of freer trade, robots replacing workers in factories, and the rise of China as the world's factory makes it harder for newcomer nations to compete on the basis of low wages to attract investment in manufacturing. India, Kenya and some other countries export services such as IT support and accounting, but these jobs, which require education and skills, do not absorb the large numbers of less-educated workers joining the labor force.

There are normally 105 boys born for every 100 girls. A cultural preference for boys, especially in China and India, has led to a dearth of women for men to marry in these countries. One study estimated that there were 126 million "missing women" in 2010, almost 90 percent in Asia.

If sex ratios are not reversed, there will be almost 200 men for every woman of marriageable age by 2050. Korea has brought the ratio of male to female babies closer to the 105-100 norm, and China and India have announced policies to follow suit, but today's skewed ratios ensure that 15 to 20 percent of Chinese and Indian men in 2050 will not find women to marry. Some analysts believe that too many men unable to marry increase aggression and crime.

Pope Francis, on visit to the Nairobi slum of Kangemi in November 2015, condemned "policies typical of the culture of waste, like those aimed at lowering the birthrate." Francis blamed outside powers for imposing these policies on African countries in a "new form of colonialism," but he also called for African countries to reduce the ethnic rivalries that lead to corruption and violence.

Africa's population is projected to double to 2.5 billion by 2050. Nigeria, which currently has fewer than 200 million people, is expected to become the world's third most populous country by 2050, with over 400 million people. Fewer than 10 percent of Nigerian adults are employed full time for wages, raising the question of what will happen to youth entering the labor force. Rapid population growth overwhelms infrastructure, from roads to schools, and inadequate infrastructure deters foreign investors.

Africa has 50 cities with over a million residents, including 21 million in Lagos. In 1950, there were 77 metro areas with over a million residents; today there are 501. The UN defines an urban area as a place with more than 1,500 residents per square mile, and reported that over half of the world's people lived in urban areas in 2009.

Oil production is rising as demand in China and elsewhere falls, reducing prices to less than $35 a barrel in Fall 2015, when there were three billion barrels awaiting buyers, a month's global supply. The price of oil was above $100 a barrel in summer 2014.

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