Guns and Melting Butter: Climate Change and Military Spending Dynamics

Abstract

This study examines how climate change influences military spending, using temperature variation and the frequency of adverse climatic events as proxies for climate stress. Employing a panel dataset of 143 countries from 1980 to 2018, the analysis explores the long-term relationship. The results indicate significant long-run negative associations between adverse climatic events, temperature changes, and military spending, along with a positive relationship with health spending. These patterns may suggest that, in response to climate-induced fiscal pressures, countries tend to shift resources - at least partially - away from defense and toward disaster response and health-related needs. The findings contribute to the emerging literature on the fiscal impacts of climate change, demonstrating how climate-induced pressures on public budgets may reshape national security priorities. Overall, this research provides empirical insights into the interplay between climate change and military spending, addressing a critical gap in both climate-security and defense economics literature.