Climatopolis: How Our Cities Will Thrive in the Hotter Future, by Matthew E. Kahn, Basic Books RRP $26.95, 261 pages

When it comes to climate change, economics is hardly a dismal science. While climatology and ecology are steeped in foreboding, economics anticipates that things will work themselves out.

Climate change is being driven by economic activity and will have to be tackled by economic measures. UCLA economist Matthew Kahn discusses these with enthusiasm and energy in his new book. But if his treatment of the issues is a reliable indicator, his discipline is limited in its capacity to comprehend the impacts of climate change or the solutions they demand.

Kahn’s argument is based on three premises: that we are warming the planet; that we can’t stop ourselves; and that as people are faced with the consequences, they will devise ways of adapting to them.

Kahn relishes what he calls the “delicious irony” that capitalism will provide solutions to the problem it has created. At times he seems to verge on hailing climate change as a stimulus to innovation.

Even so, he is inclined to hedge his bets. He cautions against lulling people into thinking there is no need to mitigate climate change; but this disclaimer does little to offset the force of his argument that people will be far less motivated to mitigate than to adapt. Asking people to incur costs to prevent climate change is inviting them to make donations to the future – whereas if the world gets hotter, people spending money on the changed climate will be gaining the benefits themselves.

Deferring responses to climate change until its impact makes it amenable to market solutions would be a market failure on a planetary scale. Kahn acknowledges that the consequences for the poor would be grave, not to mention the toll taken on the natural world. But his focus on cities puts the emphasis on the potential for shielding people. His enthusiasm for markets fires his optimism about the power of competition between cities: people will bring about adaptation by moving to cities that end up with better climates or are less at risk from rising seas.

Kahn argues that householders and businesses should be encouraged to make wise choices by having to bear the costs, such as high insurance premiums, of living on flood plains. But such costs would be offset by low property prices, and flood plains could well fill with poorer people who had little choice but to accept the risks.

He casts a rosy glow on migration, suggesting that many of the Miami residents who left after an influx from Cuba had been thinking of going anyway. Yet there is a price to be paid in community, cohesion and solidarity that may also rise if cities bear their own climate change costs.

In a climate-stressed world, undermining co-operation could eventually challenge Kahn’s underlying assumption that the world will continue to trade freely and globally. Climate change may suppress mobility as well as drive it.

Marek Kohn is the author of ‘Turned Out Nice’ (Faber)

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