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An Inquiry into the Nature and Causes of Climate Wealth of Nations: What Temperature Finance Gravitates Toward? Sketching a Climate-Finance Nexus and Outlook on Climate Change-Induced Finance Prospects

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Abstract

The contemporary attention to global warming and climate shocks is assumed to affect the price expectations and hence actual market prices of commodities. Paying attention to supply and demand side perspectives, inflated prices surrounding scarcity will be first modelled and then back-tested on data about prices in commodities of food and beverages. Future wealth of nations will be introduced by the concept of climate flexibility defined as the range of temperature variation of a country. So far, a broad spectrum of climate zones has not been defined as asset but climate change will require territories being more flexible in terms of changing economic production. The more climate variation a nation state possesses, this chapter argues, the more degrees of freedom a country has in terms of GDP production capabilities in a differing climate. These preliminary insights aid in answering what financial patterns can we expect given predictions the earth will become hotter. Already now this chapter presents human capital flows and financial market inflows into areas that are winning economically from a warming globe. The degree of climate flexibility is found to be related to human migration inflow.

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Authors and Affiliations

  1. 1.The New School & Columbia UniversityNew YorkUSA

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