As one of the elements constituting the earth's natural endowments, climate not only provides critical life support services but economic goods and services. When some uses of the atmosphere adversely affect delivery of those goods and services, climate resources, like other resources, can become scarce. Along with the need to adapt to climate change, this consideration suggests that technology may provide partial substitutes and complements to climate resources. Indeed, technical and institutional innovations may be needed to avoid long-term climate resource scarcity.
Natural resources can be defined as the elements that make up the earth's natural endowments. Broadly conceived, they are energy, matter, and aesthetics, all of which have the potential to yield services that are valued by society. They include not only material assets such as mineral ores, soils, and water, but environmental assets such as wildlife and clean air and aesthetic ones such as a visually pleasing landscape.
Climate can also be considered a natural resource. A composite of all states of the atmosphere such as mean temperatures and precipitation, as well as meteorological events such as heat and cold waves and storms, climate provides a wide range of services to man and the biosphere. The atmosphere and its motions provide a vehicle for the delivery and removal of energy and matter. Cloudiness and turbidity affect the quantity and quality of solar radiation received by the earth. Winds sweep carbon dioxide to plants, making photosynthesis possible; they also disperse industrial wastes away from smokestacks. Wind and wind-driven ocean currents transport heat from warm equatorial regions poleward to regions that otherwise would be much colder. Winds and currents bring colder air and water to the tropics. Water vapor from the ocean surface is transported over land and deposited as precipitation. These are examples of the enormous capacity of the atmosphere to provide resource services. In addition to rendering these critical life support services, climate contributes to a number of economic goods and services. The economic importance of climate is readily apparent in agricultural production. Under a given cropping system, a climate that provides adequate solar radiation, rainfall, and warmth is necessary if farming is to succeed. When deliveries of these "climatic inputs" are curtailed, as in prolonged cloudy or cloudless periods, crop productivity diminishes and so, often, do profits.
Despite the many services climate renders, there are some difficulties in conceiving of it as a natural resource. Climate is so thoroughly involved in determining the quality and quantity of other natural resources such as energy and water that its distinction as a natural resource is obscured. It is not as easy to value the goods and services provided by climate as those of some other natural resources. The atmosphere, and hence climate, is a common property resource—that is, it is freely accessible to all. Since it is not exclusively owned by any individual or group, it cannot readily be valued and, therefore, priced. Consequently, it cannot be as easily managed as those resources for which clear and enforceable property rights have been established. Moreover, unlike most natural resources, climate cannot be depleted in quantity. As it relates to climate, quantity can be defined as the capacity of climate to transport matter and energy; and the quality of climate can be viewed as the efficiency of a given quantity of climate in providing services such as snowfall for recreation or rainfall to fill reservoirs. The quality of climate can be reduced or enhanced at a particular location, but the quantity of climate is, for all practical purposes, always constant or fixed.
Use of the atmosphere as a sink for residual production wastes can adversely affect the delivery of climatic goods and services.
The atmosphere and its motions provide a vehicle for the delivery and removal of energy and matter
Can climate become "scarce"?
What makes a resource scarce is the difficulty—and therefore the costliness—of obtaining the services, or uses, of it. If a resource does not become scarce, there is no significant economic problem in allocating that resource. But are climatic goods, as resources, consumed in ways that lead to problems of resource scarcity?
To be sure, most uses of climate resources such as rainfall for crops, solar radiation for space and water heating, and wind power for electrical generation, do not diminish the availablity of those resources. Even climate fluctuations such as droughts, heat waves, or severe storms, which disrupt the normal flow of climate resources, pose few long-term problems as long as the fluctuations are expected and plans are made for adapting to their occurrence. For example, large water storage projects are sized and managed according to the historical probability of droughts or floods of critical magnitude that would occur during the lifetime of the project. That is, they are designed to absorb the effects of a relatively severe climatic fluctuation without a disruption in water distribution to end users.
On the other hand, some uses of climate resources can adversely affect deliveries of climatic goods and services. The use of the atmosphere as a sink for residual wastes from production processes is one example. Industrial emissions of carbon dioxide, oxides of sulphur and nitrogen, methane, chlorofluorocarbons, and particulate matter can eventually alter the quality of climate. Oxides of sulfur and nitrogen emitted into the atmosphere are precursors to airborne acids, which can make rainfall acidic enough to potentially harm the environment. Particulate matter from urban sources enhances the formation of clouds, which may cause rainfall in regions downwind to increase in amount and intensity. The emission of carbon dioxide, methane, and other radiatively-active trace gases strengthens the greenhouse effect. A stronger greenhouse effect could cause a gradual rise in the temperature of the lower layers of the earth's atmosphere and a cooling of the upper layers of the atmosphere. The persistence of this phenomenon could lead to global warming. Thus alteration of the quality of climate—at least when that quality is diminished—can be interpreted as a disruption in deliveries of climatic goods and services.
But even if deliveries of climate resources are altered by the use of the atmosphere as a waste dump, is there a long-term problem of climate resource scarcity? In Scarcity and Growth Reconsidered (1980), the economist Joseph E. Stiglitz proposes a set of criteria that sheds light on this question. He suggests that one fundamental concern with regard to common property resources is whether, with a growing population, a sustained per capita level of resource consumption can be maintained. In the case of climate resources, this concern might be interpreted as the likelihood of maintaining per capita consumption of climatic goods and services not only in the face of a growing population but under conditions of long-term shifts in the reliability of those goods and services. That likelihood depends, in part, on the degree to which technical progress, in general, can complement climate resources and lead to the development of production inputs that can be substituted for climatic inputs if existing climate resources' are or become less effective, or less reliable, or both.
Substitutes and complements
In general, inputs that are required for the production of a good or service are considered substitutes for one another when a decrease in the price of one input (for example, fertile cropland) leads to a decrease in the demand for a quantity of the other (for example, fertilizer). Thus if the price of fertile cropland were to fall, a farmer might maintain constant output levels by putting more cropland into production and using less fertilizer, which would now be a relatively more expensive input than land.
Production inputs are complements to one another when a decrease in the price of one input (say, iron ore for steel production) leads to an increase in the demand for a quantity of another (say, coal for producing coke, an ingredient of steel). Thus iron ore is not a substitute for coal, but fluctuations in its price affect the level at which coal is exploited for coke.
The concepts of substitution and complementarity can be applied to climate resources. While it is pointless to look for complete substitutes for climate resources—apart from the occurrence of some unimaginable or highly improbable geophysical calamity, it can be assumed that some form of climate will always exist—partial substitutes can be realized through the application of technical advances that offset deficiencies in existing climate resource services. For example, meteorological research has improved the timeliness and accuracy of short-term weather forecasts to the point that they can be reliably used in the making of certain climate-sensitive economic decisions. Weather forecasts provide information that allows farmers to choose between alternative courses of action that would either reduce the negative effects or take advantage of the positive effects of weather variations. Technological advances have made possible the substitution of irrigation water for rainwater, making farming more productive.
Other research has led to the development of complements to existing climate resources by making the harvesting of the energy and material resources embodied in climate more efficient. Research on alternative energy sources has shown how to capture the energies of the sun and wind and put them to work to complement conventional forms of energy. As solar and wind collection technologies become cheaper and more efficient, they could increase the demand for solar and wind resources, which have not been economically feasible thus far.
Agricultural research has led to the development of strains of crops that are tolerant of climatic stresses such as drought, severe cold, and extreme heat. In examining the expansion of the zone in which hard red winter wheat is grown across steep thermal and moisture gradients in the North American Great Plains, Norman J. Rosenberg, a researcher at Resources for the Future, has found that the expansion was aided by the development of temperature-hardy wheat strains and the development and application of tillage practices that conserve moisture. Before cold-hardy wheat strains were developed, virtually no hard red winter wheat was grown within a few hundred miles of its current northern limit in southern Canada. This is the kind of technical progress that increases the productivity of the existing climate resource.
Partial climate substitutes can be realized through technical advances that offset deficiencies in climate resource services.
Another way of increasing the productivity of climate resources is by reducing society's vulnerability to the vagaries of climate. Droughts, severe storms, and heat and cold waves continue to cause economic hardship, environmental damage, and human suffering, especially in less developed countries that may lack the human and material resources to deal with climatic hazards. It is important to identify activities that are both directly and indirectly vulnerable to climate fluctuations. Ongoing research is aimed at describing and quantifying the risks of climatic hazards includes retrospective regional assessments of the frequencies and magnitudes of droughts, hail storms, tornadoes, early and late frosts, and other climatic extremes.
Future use of climate resources
It would be unwise to assume that the productivity of climate resources in the coming decades will be the same as it is today. Even if the current climatic regime persists—and it may not—a wide range of technical innovations could make climate resources more productive. Agricultural research is likely to produce new crop varieties, through conventional procedures and biotechnology, that are better adapted to regional climatic conditions. Improvements in irrigation efficiency are likely. Depending on the direction of future energy prices, solar photovoltaics, a technology for converting solar energy directly into electrical current, could be a major method of generating electricity. Should economical solar energy lead to cheaper electricity, desalinization of sea water could provide water that might open deserts for a variety of uses. The ability to predict climate itself is expected to improve through the development of faster computers and better representation of the physical properties of the atmosphere in climate models.
But there may be a dark side to the future use of climate resources. The possibility of global warming in the coming decades may bring pressure on the research establishment to develop technical and institutional innovations that are apace with or in advance of the changing climate in order to prevent the degradation of usable climate resources in some regions. To be effective in responding to climate change, technical and institutional progress must follow two paths. The first can be called adaptive response, and would include efforts to change production processes in ways that minimize the costs of deleterious changes in climate or, conversely, maximize the benefits of positive changes in climate. An example of adaptive response would be the development of crop varieties that are better able to utilize the higher carbon dioxide concentrations that would accompany greenhouse warming than do current varieties.
Technical and institutional innovations apace with or in advance of changes in climate could mitigate the degradation of usable climate resources.
Institutions can facilitate adaptive responses to climate change. Pierre R. Crosson of Resources for the Future has argued that the international food research institutions making up the Consultative Group for International Agricultural Research could serve as a model for organizing future agricultural research aimed at adapting to climate change. Another adaptive institutional response to greenhouse warming would be to make reductions in trade barriers that would allow countries disadvantaged by climate change to have easier access to food and fiber from advantaged countries.
The second path important to technical and institutional progress can be called mitigative response. This would include efforts to slow the rate of climate change to the point that degradation of usable climate resources is curtailed or lessened enough so that adaptive measures are not overwhelmed. The reduction of greenhouse gas emissions is one obvious strategy, though it would be difficult to implement because of its high costs to national economies. Another mitigative strategy, however, would serve to increase the productivity of current and future climate resources; this is the planting of forests to sequester carbon (helping to abate greenhouse warming) and to produce fuel wood (making wider use of the potential of existing climate resources to produce biomass). The costs of this strategy are unknown.
In conclusion, climate resources, like other resources, can become scarce in the sense that expected delivery of the energy and mass needed is not made. Normal fluctuations in the existing climate that produce droughts, severe storms, and other climate hazards do not necessarily point to a long-term problem of climate resource scarcity. Rather, they point to the continuing need to better adapt climate-sensitive economic activities to the normal variability in climate. However, in the future, if climate warming continues unabated and population and economic growth place mounting pressures on climate-dependent resources, then appropriate technical and institutional innovations will be necessary if we are to avoid a long-term problem of climate resource scarcity.
Population and economic growth, as well as climate warming, could result in a long-term problem of climate scarcity.
Climate is a natural resource that can change in such a way that it is no longer productive to those who are dependent on it. The result may be per capita decreases in the beneficial use of climatic services. Recognition of problems created by overconsumption of common property resources such as public grazing lands, groundwater, and fish and wildlife leads to a demand for resource management. Why should climate resources be treated any differently?
Depending on the direction of future energy prices, solar photo voltaics could be a major method of generating electricity
William E. Easterling III is a fellow in the Energy and Natural Resources Division at RFF.
A version of this article appeared in print in the June 1990 issue of Resources magazine.
