1

North American Regional Dynamics in a 21st Century of Climate Change

Mark PartridgeSwank Professor in Rural-Urban Policy

Ohio State University

Presented at

Plenary SessionRegional Studies Association Annual International Conference

Pécs, Hungary25 May, 2010___________

www.aede.osu.edu/programs/Swank/

2

Outline:1. American migration is not a simple story of

moving to big cities. 2. They move to nice places—good weather,

pleasant landscape, oceans….– QOL is a key theme—matters for climate change

3. Globalization magnifies competitive advantage.4. My capstone focus. Climate change will alter

the ‘landscape’ & affect migration patterns. Ask: are we on the cusp of profound change? This is a key role for Regional Studies.

Why Study Migration? • In North America, net migration is the

key reason for growth differentials.• Migration is regional success? People

vote with their feet to maximize utility?– Because high income may be a regional

compensating differential, it is not the correct metric of regional well being.

• E.g., Fort McMurray in the Oil Sands of Canada

3

4

Amenities—Conceptual Issues• “Household” amenities shift labor supply and/or

household preferences. • Natural amenities: climate, water, landscape,

mountains, clean environment. My focus today.• Philip Graves in the 1970s and 1980s with major

recent contributions by Jordan Rappaport and others.• Urban amenities such as cultural venues,

recreation, urban milieu. (Glaeser et al., 2001; Adamson et al., 2004; Florida, 2004)

Conceptual Issues—cont.• Amenities are normal goods→ rising incomes

over time increase the demand for amenities.• Technological change leads to movement to warm

locations such as air conditioning• Amenities lead to faster population growth & are

capitalized into higher housing costs and lower wages as people crowd into high-amenity areas

• Eventually, high prices and low wages would shut off amenity migration. Perhaps after 2010…..

• Michael Storper and Allen J. Scott dispute the notion of Amenity led growth though they provide no empirical evidence (2009, J. of Economic Geography)

5

What about cities

• Urban agglomeration is clearly a strong force. Either for the largest cities or having access to them—especially Europe and Asia.– London, Blue Banana, etc.

6

Evidence• Massive empirical literature starting with Philip

Graves in the 1970s. • Some key studies are:• Partridge and Rickman (2003) J. of Urban

Economics; • Jordan Rappaport (2007) Regional Science

and Urban Economics,• Mario Polese (2009). The Wealth and Poverty

of Regions: Why Cities Matter. University of Chicago Press. 7

8

1969-2007 Growth By Metro Area Size in 1969 (%)

Large MSA is > 3 million population in 1969. There are 8 MSAs in this category: New York, Los Angeles, Chicago, Philadelphia, Detroit, Boston, San Francisco and Washington DC. The Large-Medium MSA have a 1969 population of 1 million - 3 million ( 27 MSAs). The Small-Medium Metro Areas are 250,000 - 1 million 1969 population ( 85 MSAs). Small MSAs have a 1969 population of 50,000 - 250,00 (230 MSAs).

9

1990-2007 Growth By Metro Area Size in 1969 (%)

Large MSA is > 3 million population in 1969. There are 8 MSAs in this category: New York, Los Angeles, Chicago, Philadelphia, Detroit, Boston, San Francisco and Washington DC. The Large-Medium MSA have a 1969 population of 1 million - 3 million ( 27 MSAs). The Small-Medium Metro Areas are 250,000 - 1 million 1969 population ( 85 MSAs). Small MSAs have a 1969 population of 50,000 - 250,00 (230 MSAs).

10

1969-2007 Growth For Representative Metro Type (%)

The Traditional Core includes New York, Boston, Philadelphia and Chicago. The Rustbelt includes Detroit, Cleveland, Pittsburgh and St Louis. Sunbelt includes Miami, Atlanta, Phoenix, Tampa, Orlando and Las Vegas. Mountain/Landscape includes Seattle, Denver, Portland, and Salt Lake.

11

1990-2007 Growth For Representative Metro Type (%)

The Traditional Core includes New York, Boston, Philadelphia and Chicago. The Rustbelt includes Detroit, Cleveland, Pittsburgh and St Louis. Sunbelt includes Miami, Atlanta, Phoenix, Tampa, Orlando and Las Vegas. Mountain/Landscape includes Seattle, Denver, Portland, and Salt Lake.

What did we learn?• Growth shifted from the core to the

hinterlands even with conditions that favored concentration such as falling transportation costs.

• Agglomeration is not the primary driver of growth. Growth is happening in cities located in nice places, not biggest cities.

• What about amenity growth?

12

Population Growth from 1960 to 2008

0 160 320 480 64080Miles

Population Growth from 1960 to 2008(%)

133.9 - 811.595.6 - 129.552.9 - 88.036.8 - 43.426.2 - 35.8-22.5 - 22.3 Map Created on November 16, 2009

Mean=89.1

Median=43.4

14

2000-2007 Population Growth

151515

1990/91-2006 North American Population Growth

What about Canada?

• Cities matter more in Canada– When there are few cities, each city takes on

added importance. [between Windsor-Montreal• When climate varies less, there is less

migration for weather.• Ergo—Canadian regional growth processes

have a more European flavor though with a little ‘natural resource’ taste.

• Why Regional Studies is so interesting.16

Globalization• Globalization makes our work even more

important. Small gaps in competitiveness or QOL now shift resources around the world.– Not just Cleveland competing with Detroit, but

Cleveland competes with the world. Winners “steal” from the rest of the world. Laggards lose to everywhere in the world.

– Everything is magnified in a global economy.– Higher incomes and the search for QOL creates

a competition for footloose high-skilled workers.

17

Climate Change and Regional Studies

• Most important issue facing human kind.• I believe this is where Regional Studies

can play an important role that has been so far is understudied and under appreciated by policymakers.– Barca report– Every state and city in the U.S. seems to want

to be the green capital of the economic development

18

Climate Change in the U.S.

• Climate change is forecasted to greatly raise temperatures, sea levels, pests, and increase the size and frequencies of storms and hurricanes.

• Arid areas in the Southwest and elsewhere could experience long droughts, creating water shortages.

19

20

Sea-Level Rise in the Gulf Coast

21

What happens to our weather?Illinois becomes the Sunbelt.

What will Climate Change do to Growth and Migration?

• Climate change will mean that infrastructure will have to be realigned or strengthened, raising local taxes in affected areas.

• New infrastructure will be required for water projects with higher water prices.

• Climate change will make the Sunbelt less hospitable and make the Frostbelt more desirable.

22

What will Climate Change do to Growth and Migration?

• Americans will move to high QOL. Movements of people could be into the tens of millions.

• Together, coastal areas (especially on the East Coast and Gulf of Mexico) and the Sunbelt should experience out-migration.

23

What will Climate Change do to Growth and Migration?

• Very little thought into the consequences of this migration and then how ‘we’ should be involved.

• What I do NOT mean about “regions and climate change”:– Most “climate change” regional research has

been very local. E.g., what is the local economic impact of a “green energy” cluster?

24

What will Climate Change do to Growth and Migration?

• What I do not mean: Plop money here, there, everywhere

• Combining environmental policy with job creation programs in order to ‘tick’ 2 boxes. What does US do:– Alternative energy projects that reduce carbon at a higher

cost than energy efficiency– Creates few jobs because alternative energy is capital

intensive– Need heavy subsidies: borrow funds from China to fund

green jobs.– Little job growth and limited positive effects on the

environment, while draining the public treasury. 25

What will Climate Change do to Growth and Migration?

• What I Do mean:• Climate change is too important to be used as

an excuse for ill-conceived jobs programs.• Massive regional realignment—the

interactions of regions– On the positive side, such migration will lower the

adaptation costs of climate change.– It will revitalize parts of the Rustbelt, Northern

Great Plains and Northeast—areas that have faced relative decline for decades.

26

What will Climate Change do to Growth and Migration?

• On the negative side, it will lead to massive adjustment costs in adversely affected areas. – Vicious cycle: higher taxes to support new

infrastructure will lead to out-migration, creating the need to raise taxes even further, starting the process over again.

• The effects of climate change will soon start to be capitalized into property values, beginning the adjustment well before the main negative effects are felt.

27

What is the role of Regional Studies?• Scientists have driven the climate change

research and policy agenda. – Worry about sea/lake levels, crop production,

forest cover, policies to mitigate climate changes.

– Very naïve assumptions about how people may respond, if at all.

– “People” are almost an afterthought.

28

What is the role of Regional Studies?• The massive movements of people in response to

climate change may have much larger effects than the other policies aimed at adaptation and mitigation such as cap and trade.

• Prediction & Planning is essential.• Land-use is important. Are we going to replace

Sunbelt sprawl with Rustbelt sprawl?• Prime farmland would have a higher premium—

further calling for planning for better land-use. • Needs for new infrastructure and water use?

29

What is the role of Regional Studies?

• Regional Studies is ceding too much ground to scientists who do not understand the role of how people respond to incentives.

• Regional studies is ceding too much ground to (say) environmental economists who do not take into account migration.

30

Summary• Americans have moved en masse to nice

places not necessarily big cities.• Globalization makes regional competition

even more acute with the effects of winning or losing even more magnified.

• Climate change will alter the American landscape with the potential to reshape regional patterns.

• Regional Studies is needed to help with these paramount issues.

31

323232

Thank you

Presentation will be posted at The Ohio State University, AED Economics, Swank Program website:

http://aede.osu.edu/programs/Swank/ (under presentations)

3333

1950-2000 Population Growth

Population Growth from 1950-2000

0 160 320 480 64080Miles

Population Growth from 1950 to 2000(%)

167.0 - 1148.3113.3 - 147.864.9 - 98.242.9 - 61.232.4 - 42.6-28.7 - 30.6 Map Created on November 16, 2009

Mean=116.3

Median=61.2

35

2000-2007 Population Growth in NC U.S.