Second- and third-order effects: Immigration, bird flu and climate

It's usually easy to predict first-order effects. Those are effects that follow directly from our actions. For example, the Trump administration's well-publicized campaign to find and deport persons not legally in the United States has had the predictable effects of causing some to leave on their own, others to hide and those who might have crossed the southern border into the United States not to, at least for now, if the large drop in border crossing and arrests is any indication.

But the second-order effects, that is, those that follow from the first-order ones, are often harder to detect and receive far less coverage. For example, Florida, which passed new draconian legislation in 2023 and began its own statewide crackdown on undocumented immigrants, began to see the second-order effects within a year. Agricultural workers were more difficult to find. Farmers could still sign them up for temporary work visas, but the federal system is difficult and costly to navigate. (To get a sense of how complex and demanding that system is, read more about it here.) The hotel, restaurant and construction industries are struggling to find people for the jobs they have open. One report estimated that economic activity in Florida has suffered a $12 billion hit due to the crackdown.

Now come the third-order effects. With the ongoing labor shortage, Florida is considering relaxing child labor laws to make more children available for jobs previously held by immigrants. In all likelihood, the state wouldn't even be considering this change had it not chased away so many immigrant laborers in the first place.

Immigration is just one area the United States is experiencing second- and third-order consequences from government policy. Recent sharp reductions in the federal government workforce undertaken by the Trump administration have led the U.S. Food and Drug Administration (FDA) to suspend an effort to improve bird flu detection in milk, cheese and pet food. Remember that bird flu is now affecting dairy herds across the country, so such testing has become more important. Recent reductions in the FDA's workforce led to the suspension for lack of staff of work on the improvements. The first-order effect, of course, is that the improvements will not get made or be delayed for some time.

We can guess the possible second-order effects. Bird flu virus in these products may go undetected. That would lead to third-order effects including more humans exposed to bird flu with the possibility that they might contract the disease. Of course, even if those who contract it have mild symptoms as most who already have had the disease in the United States have experienced, such infections give the bird flu an avenue for mutating in humans in ways that could lead to a much more human-transmissible and serious strain. That would almost certainly lead to a pandemic.

When it comes to climate change, the stakes are even higher. We know that climate change is already doing economic damage through droughts, floods (from heavier rains and rising sea-level), and severe weather such as more intense hurricanes. These are predictable second-order effects of climate change (the first-order effect being the warming of the earth's surface, oceans and atmosphere).

Now comes the mother of all third-order effects. A new study suggests that a rise of 3 degrees Centigrade in global surface temperatures by 2100 would reduce the size of the global economy by up to 40 percent of its projected size. A 3-degree rise is not out of the question given that in 2023 the global average was already 1.34 degrees C above the preindustrial era temperature and rising at three times the rate prior to 1982, that is, 0.2 degrees C per decade. And, that rate of change is likely to rise as global carbon emissions continue to rise.

So, why has this study found much greater effects on the global economy than previous studies that at most pegged the loss at 23 percent? Previous studies assumed that only the weather in a particular country affected that country's economic output. This new study took into account the effects that weather in other countries have on each country. In other words, it took into account effects that flow from the intertwining of national economies with the global economic system in which floods, droughts and hurricanes in one country can affect the economic well-being of others. The affected country may have to reduce exports to other countries and/or be unable to bring in imports from other countries in quantities comparable to those before the damaging event. The researchers also allowed for the increasing severity of weather events and the damage they can do that doesn't show up in measures of average rainfall, for example.

So, first-order effects are higher temperatures. Second-order effects are drought, floods and more severe weather. Third-order effects are declines in economic output in a country. Fourth-order effects are declines in the output of countries affected by the declines in output of countries most affected by climate change.

(Very longtime readers may remember that I am considerably more pessimistic than this study because I believe the global economic system is teetering on a base of resources—agriculture-, forestry- and energy-related—that are highly vulnerable to climate change and/or depletion and far more crucial to the stability of the world economic system than is normally understood by economists.)

We are now living in an era in which through blindness, willful or otherwise, those in power are failing to take into account the knock-on effects of what they are doing and thereby putting the entirety of civilization at risk of collapse—if we aren't there already.

UPDATE April 6 at 2:14 p.m.: A reader from Sweden looked into what researchers mentioned in the above piece really meant by a 40 percent reduction in the economy at its projected size in the year 2100 and wrote to me the following: "In this particular case, I find that you have been mislead by the researchers. Their calculation is compared to the projected growth of SSP1-2.6, In the SSP1-2.6 average GDP per capita is projected to increase from 13 000 US dollars to 81 000 dollars in real terms (measured in fixed dollar rate), that is an increase of 620 percent (see chart). The 40% reduction in GDP thus corresponds to an increase of 620%*60% = 372 %!" That's almost an increase of four times in the size of the economy. I encourage you to read his analysis for a fuller understanding of the numbers.

Kurt Cobb is a freelance writer and communications consultant who writes frequently about energy and environment. His work has appeared in The Christian Science Monitor, Resilience, Common Dreams, Naked Capitalism, Le Monde Diplomatique, Oilprice.com, OilVoice, TalkMarkets, Investing.com, Business Insider and many other places. He is the author of an oil-themed novel entitled Prelude and has a widely followed blog called Resource Insights. He can be contacted at kurtcobb2001@yahoo.com.