The evangelist for climate migration
Parag Khanna thinks things will be OK. He has faith in humanity’s ability to adapt to climate-juiced natural disasters, as long as the market is allowed to respond accordingly.
His company, Climate Alpha, forecasts real estate values based on exposure to climate risk and other factors, and just launched a tool for home buyers to see the expected effects of climate change on property values down to the individual parcel.
Khanna is hoping to harness Inflation Reduction Act funding and other resources to help governments respond more efficiently to climate change — and avoid consequences like towns running out of water. One of his investors alerted him to impending shortages in Rio Verde, Ariz., eight months before the town got cut off from supplies in January.
This interview has been edited and condensed for clarity.
So you have moved a lot yourself. And you are an advocate of migration.
In the context of generational change, I view it as migrants being the winners because young people are the free agents of a demographically deflating world. So in a world where demographics, population patterns are plateauing, which they are, young people are in higher demand than ever before.
If you are a young and skilled person, you are absolutely the Lionel Messi of the 21st century labor market. That’s what the whole nomad visa remote worker movement is about. Countries are in an arms race to attract young people to come and live there. If you can do your job anywhere, you can be in Panama right now. You can be in Puerto Rico, you can be in Iceland. You can be in Athens, Portugal, Bali, Thailand, or all of the above any month.
OK, but people also moved back to where they were from during the pandemic to be closer to their families and child care. They’re not going to move somewhere else from where they moved back to.
All movement is migration. And by the way, all domestic migration is also migration. People may move in the next five years to thriving Zoom towns.
It could be Denver, Austin, Boise, whatever. Which of them scores the highest in our proprietary resilience index? That’s what we use to rank locations by not just environmental, but also socioeconomic resilience and stability and so forth. Could be low crime, but also high groundwater availability.
I can imagine in the not too distant future young people saying, ‘OK, Mom, Dad, it’s been lovely, thanks for letting me save on rent. I’m off to Columbus, Ohio, because there’s lots of new affordable housing and it’s thriving and there’s craft breweries,’ or whatever. Nothing is linear, is the point.
How does that affect return to office, what’s going to happen with that?
I’m on the side of remote work. Because I think it’s a secular technological trend. It’s a cultural trend. Even though unemployment may be ticking up in tech and a couple other areas, that doesn’t mean that employers have all the leverage all of a sudden. Because at the end of the day, there’s still a lot of remote work out there that’s growing, so I don’t buy that kind of inevitable RTO thesis.
“If you are a young and skilled person, you are absolutely the Lionel Messi of the 21 st century labor market”
So what should we be losing sleep over?
The whole IPCC, UN COP process has lulled us into thinking that there are these linear timelines and, ‘Oh, you’ve got to meet your Paris targets, otherwise, this really needs an orderly, predictable fashion and in 2040 things will go bad.’ Sorry, that’s not how climate works.
So what should we be doing?
People have to move. People have to adapt, and institutions, geographies. Policy has to adapt.
We’re going to spend a trillion dollars on infrastructure, which we’re not, but let’s just call it a big round number. You really don’t want to be spending it in, like, coastal Louisiana. People are leaving, they’re not going to come back. Restoring power lines there and building dikes and dams there, don’t do that.
Take that money, give everyone $250,000, and send them on their way. And say, ‘Here’s a map of resilient geographies. Here’s ZIP codes and counties that are not climate-stressed, where there’s building permitting, where there’s homes and schools, go live there and start a new life.’ Because otherwise you, as a human being, are going to spend 240 days a year just dealing with climate disaster. We’re Americans, we’re not meant to be survivalists, it’s not a way for a modern society to be.
Where is the next Rio Verde? Where are people going to be talking about in eight months that you were like, ‘I predicted that’?
One of the things we do is to say, let’s look at two years of American migration behavior and intercounty migration patterns. Let’s look at the places where people left and where they went to and compare them according to their resilience characteristics. If another 100 people were to leave due to a climate event, where would they go?
Chances are they would move to the next most proximate location that has high resilience scores, and this is what we did for South Florida. We looked at the areas of damage and we’re like, OK, there’s a ring of ZIP codes inland from Fort Myers, Sarasota and whatnot, that actually have fairly high resilience characteristics. And they actually have good infrastructure. And if you had higher building permitting in those areas, you would actually want to right now go and build, like, 50,000 homes in those ZIP codes. So the people of Fort Myers could leave and reliably find a new place to live and never have to deal with the next hurricane.
New Orleans is a good example. Map out the next-closest place where any family in New Orleans can take their Ford F-150 truck, their children in some cases, and toys. Where do you go? You can tell them and guide them, advise them. Say, ‘You know what, it’s a very resilient area and it’s quite affordable. Here’s your payout from HUD or whatever it is, your $230,000, like, go and live there.’
It’s so not hard to do this. We literally have an algorithm to do this. But from a policy standpoint, oh my god, it’s like pulling teeth.
Politically, that’s crazy.
There’s a ban on cross-subsidization of mortgages. And it’s perfectly rational; you should not be penalizing people for living in certain areas, and privileging people in others because that’s going to lead to all sorts of distortions, but that law was before climate change.
So my point is that the mortgage markets should eventually be allowed to act like the insurance market, which is to say that premiums are lower in lower-stress areas, and that will encourage Americans to buy homes at preferential mortgage rates and resilient geographies to preserve the American dream. That is exactly the view of plenty of intelligent people out there. That’s a rational, utilitarian approach and position to have.