Climate-related natural disasters, economic growth, and armed civil conflict
| DOI | 10.1177/0022343311426167 |
| Published date | 01 January 2012 |
| Date | 01 January 2012 |
| Subject Matter | Research Articles |
Climate-related natural disasters, economic
growth, and armed civil conflict
Drago Bergholt
Department of Economics, Norwegian Business School (BI)
Pa
¨ivi Lujala
Department of Economics & Department of Geography, Norwegian University of Science and Technology
(NTNU) & Centre for the Study of Civil War, PRIO
Abstract
Global warming is expected to make the climate warmer, wetter, and wilder. It is predicted that such climate change will
increase the severity and frequency of climate-related disasters like flash floods, surges, cyclones, and severe storms. This
article uses econometric methods to study the consequences of climate-induced natural disasters on economic growth,
and how these disasters are linked to the onset of armed civil conflict either directly or via their impact on economic
growth. The results show that climate-related natural disasters have a negative effect on growth and that the impact is
considerable. The analysis of conflict onset shows that climate-related natural disasters do not increase the risk of armed
conflict. This is also true when we instrument the change in GDP growth by climatic disasters. The result is robust to
inclusion of country and time fixed effects, different estimation techniques, and various operationalization of the dis-
asters measure, as well as for conflict incidence and war onset. These findings have two major implications: if climate
change increases the frequency or makes weather-related natural disasters more severe, it is an economic concern for
countries susceptible to these types of hazards. However, our results suggest – based on historical data – that more fre-
quent and severe climate-related disasters will not lead to more armed conflicts through their effects on GDP growth.
Keywords
armed civil conflict, climate change, climate-related natural disasters, economic growth
Introduction
Catastrophes such as typhoons and floods have caused
significant economic and human losses throughout
history. The heavy monsoon that hit Pakistan in July
2010 caused floods that ravaged the country, bringing
enormous damage to homes, schools, fields, and infra-
structure. The reported death toll for the event is about
2,000, while an estimated 20.3 million people, or more
than 10% of the Pakistani population, were affected
(OFDA, 2010).
We might be able to grasp the gravity of disaster dam-
ages through testimonies from victims, relief workers,
and journalists, but the short- and long-term effects on
economic growth and peace remain largely unknown.
What happens to production and national income in
the short run? Furthermore, with regard to ongoing
transnational efforts to prevent armed civil conflicts,
what are the effects of climate-related events?
The potential impact of climate change in the form of
natural disasters is relevant not only for Pakistan: on
average more than 270 devastating floods and storms are
reported every year throughout the world (CRED,
2011).
1
Although it is the large-scale events that make
the headlines, the frequency of smaller events is equally
striking: even in the absence of large-scale events in
Corresponding author:
Drago.Bergholt@bi.no
1
In fact, these two disaster classes alone represent more than 70% of
all disasters reported in CRED’s EM-DAT database for the latest
decade. See http://www.emdat.be.
Journal of Peace Research
49(1) 147–162
ªThe Author(s) 2012
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DOI: 10.1177/0022343311426167
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eace
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ESEARCH
journal of
2009, more than 100 million people were victims of cli-
matic disasters (Vos et al., 2010).
Questions about the impacts of such disasters are
clearly of great importance for the livelihoods of a large
number of people and countries and hence for interna-
tional development agencies and policymakers through-
out the global community. As global warming is
expected to lead to an increase in both the severity and
the frequency of climate-related disasters (IPCC, 2007:
43–54), it is important to understand how climate change
will affecteconomies, and whetherthese changes will trans-
late into more armed conflicts, directly or via impacts on
economic growth. However, only a few studies have
attempted to quantify the impact of these events using
econometric methods and large N-scale panel datasets.
In this article, we examine how climate-related natural
disasters, including flash floods, surges, cyclones,
blizzards, and severe storms, affect economic growth
and peace. We label these events climatic disasters
throughout the analysis.
By using ordinary least squares (OLS) and panel data
on climate-related disasters and short-run economic
growth,
2
we confirm that climate-related disasters have
a negative impact on growth. However, our analysis of
disaster data and conflict onset shows that climate-
related natural disasters do not have any direct effect
on conflict onset. We then instrument economic growth
using our disaster measure in a two-stage least squares
(2SLS) analysis to study whether climate-related disasters
have an indirect effect on conflict onset via slowdown in
economic growth. By doing this, we also address the
simultaneity problem between income and conflict: we
recognize that slow and negative economic growth may
cause conflict, but also that an approaching conflict may
lead to slow growth, for example, when extractive indus-
tries withdraw from unstable countries that are on the
brink of sliding into conflict. Instrumenting growth
using climatic disasters allows us to impose exogenous
variation in growth. However, we do not find any evi-
dence that economic shocks caused by climate-related
disasters have an effect on conflict onset. This result
differs from the negative causal link between economic
growth and conflict found in other studies, including
Collier & Hoeffler (2004) and Miguel, Satyanath &
Sergenti(2004). However, our findingsare similar to those
in the recent cross-country study by Ciccone (2011).
Our study differs from previous work on natural
disasters, economic growth, and conflict onset in several
important ways. First, much of the previous work
considers the economic effects of large-scale disasters.
By contrast, this study includes small disasters in
the analysis and, thereby, takes into consideration that
the large majority of what we define as natural disasters
are actually small-scale events. Second, we use fixed-
effects methods to control for unobserved factors that
may affect the results. For example, climate and closeness
to coastline may affect both the occurrence of natural
disasters and economic growth, or there may be overre-
porting on disaster magnitude in less developed countries
to attract international aid. Finally, while most previous
disaster studies ignore the possibility that different disas-
ter types have different effects on the economy
(for instance, by aggregating geophysical events such as
volcano eruptions and earthquakes, biological events
such as famines, and slow-onset events such as droughts,
and then treat them as one), we only look at climatic
disasters that come as sudden shocks and last for no
longer than one month.
The article proceeds as follows. We begin by discussing
the effect of climatic disasters on economic performance,
drawing on recent literature, and how previous studies
have considered natural phenomena in armed civil con-
flict research. Then we present our main hypotheses.
Before turning to the analysis, we present our data and
how our disaster variables have been constructed.
We conclude by discussing the main results and their
implications.
Economic effects of natural disasters
As the devastating 2010 floods in Pakistan demonstrate,
climate-related natural disasters undoubtedly cause very
real economic damage when they occur: lives are lost,
people are forced to leave their homes, buildings and
other infrastructure collapse, and extractable resources
become unavailable. All these consequences can be defined
as direct impacts in the sense that they arise as immediate
outcomes of disasters. Such impactsare obviously negative
for most of the affected individuals and their economic
activities. There are also a numberof indirect impacts that
may followin the aftermath of natural disastersand that are
linked to economic activity such as income changes,
demand and supply shocks, shifting terms of trade, and
increased inflation.
The net effect on overall economic performance is the
sum of the direct and indirect impacts. Although many
authors believe that natural disasters are likely to have
a negative impact on economic growth (Noy, 2009), this
is not so clear from a theoretical point of view, at least
2
We define the short run as the current year and next year.
148 journal of PEACE RESEARCH 49(1)
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