Motivation

When envisioning our future, a key factor is economic growth rate (Christensen et al 2018). Long-term GDP forecasts are vital for assessing the economic impact of climate change and other societal factors, such as public health, food prices, and armed conflict. Such projections exist and are widely used.

However, the leading models are based on well-functioning Western economies and applied globally. They rely on projections of demographic shifts and education, assuming that technological advances will boost productivity. These models expect less advanced economies to adopt new technologies and gradually converge to Western income levels.

This approach is problematic. Consider the OECD’s prominent economic growth model. In the figure below, GDP per capita is plotted for Afghanistan, Bangladesh, France, and the Democratic Republic of the Congo from 1970 to 2016, with OECD forecasts extending to 2100 (Dellink et al 2017). It predicts that France will maintain its consistent economic growth from the past 50 years at a similar rate. However, the OECD model also projects that the Democratic Republic of the Congo, which was wealthier than Bangladesh in 1970 but became much poorer by 2016 after decades of corruption and civil war, will reach France’s wealth levels by 2100. Is this plausible?

The conflict trap

A major flaw in current growth models is their neglect of the economic impacts of armed conflict and the inability or unwillingness of weak governments to invest in essential infrastructure like roads and electricity. These models also fail to consider the potential exodus of skilled and resourceful citizens seeking safety from violence, and simply projects convergence as if all countries had equal quality of governance.

In our paper (Petrova et al. 2023), we put forward a new model that incorporates the likely economic costs of armed conflict into forecasting the economic outlook of a country. The required adjustment for armed conflict is significant—accounting for it, expected national income is on average 25% lower by century's end across countries. Countries like Afghanistan, Niger, Yemen, and the Philippines are expected to lose 50 to 70% of their potential income over the next 80 years.

Implications

These findings have serious implications, indicating that today's most marginalized societies will be far more vulnerable to climate change than current income projections suggest. If accurate, the quality of governance and ability to manage climate impacts could be much worse than anticipated.

Persistent conflict impacts population health, migration, and education, which in turn can change the future growth trajectories of nations. While these effects are most pronounced in countries experiencing conflict, neighboring countries and regions may also feel the impact through changes in trade and political spillovers.

Planning for our future on a changing planet necessitates scenarios that consider all challenges, particularly those where history points to the need for preparing for more pessimistic outcomes.

References