The El Nino Southern Oscillation and Geopolitical Risk

Cullen S. Hendrix ()
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Cullen S. Hendrix: Peterson Institute for International Economics

No WP24-14, Working Paper Series from Peterson Institute for International Economics

Abstract: This paper investigates whether the El Nino Southern Oscillation (ENSO)--the warming and cooling cycle in the central and eastern Pacific Ocean that affects both global atmospheric and ocean conditions--is a driver of geopolitical risk at the global scale. Using nonlinear cross-convergent mapping, a technique for characterizing causal relationships in dynamic systems, it finds ENSO is causally related to geopolitical risk at the global level, but that finding is not replicated at the country level for countries whose economies are most strongly influenced by ENSO cycles. Put differently, ENSO-related geopolitical risk is an emergent phenomenon evident only at the Earth system level. Then, using monthly observations of ENSO and geopolitical risk, the paper reports a curvilinear, contemporaneous relationship between ENSO and risk, with La Nina conditions associated with lessened geopolitical risk relative to El Nino and neutral climate conditions. The effects are statistically and substantively significant, and the relationship is demonstrated to be stronger in more recent decades (post-1990). The effect for geopolitical risk of transitioning from La Nina to neutral ENSO conditions is of similar magnitude to that of the outbreak of a major interstate war.Â

Keywords: climate change; global warming; natural disasters; geopolitical risk; domestic and international conflicts (search for similar items in EconPapers)
JEL-codes: C53 D74 F51 Q34 Q54 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-env and nep-rmg
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