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Climate change and the opportunity cost of conflict

Significance There is growing consensus among academics that climate change may amplify the risk of violent conflicts. While underlying mechanisms are poorly understood, negative income shocks associated with climate variability have been long hypothesized to play an important role. We relate recent hydrologic and microeconomic advances to investigate the theoretical foundation of this claim. Results prescribe caution in interpreting empirical relations between climate variability and conflict in the context of climate change. While fighting preferentially occurs during climate anomalies, more frequent anomalies may not yield more conflicts. By shifting the entire distribution of rainfall, climate change effectively redefines the very notion of climate anomaly. Adaptation to this new normal can have a dominant, and often counterintuitive, effect on conflict probability. A growing empirical literature associates climate anomalies with increased risk of violent conflict. This association has been portrayed as a bellwether of future societal instability as the frequency and intensity of extreme weather events are predicted to increase. This paper investigates the theoretical foundation of this claim. A seminal microeconomic model of opportunity costs—a mechanism often thought to drive climate–conflict relationships—is extended by considering realistic changes in the distribution of climate-dependent agricultural income. Results advise caution in using empirical associations between short-run climate anomalies and conflicts to predict the effect of sustained shifts in climate regimes: Although war occurs in bad years, conflict may decrease if agents expect more frequent bad years. Theory suggests a nonmonotonic relation between climate variability and conflict that emerges as agents adapt and adjust their behavior to the new income distribution. We identify 3 measurable statistics of the income distribution that are each unambiguously associated with conflict likelihood. Jointly, these statistics offer a unique signature to distinguish opportunity costs from competing mechanisms that may relate climate anomalies to conflict.