The impact of climate conditions on economic production
- We present a novel data set of subnational economic output, Gross Regional Product (GRP), for more than 1500 regions in 77 countries that allows us to empirically estimate historic climate impacts at different time scales. Employing annual panel models, long-difference regressions and cross-sectional regressions, we identify effects on productivity levels and productivity growth. We do not find evidence for permanent growth rate impacts but we find robust evidence that temperature affects productivity levels considerably. An increase in global mean surface temperature by about 3.5°C until the end of the century would reduce global output by 7–14% in 2100, with even higher damages in tropical and poor regions. Updating the DICE damage function with our estimates suggests that the social cost of carbon from temperature-induced productivity losses is on the order of 73–142$/tCO2 in 2020, rising to 92–181$/tCO2 in 2030. These numbers exclude non-market damages and damages from extreme weather events or sea-level rise.
Author details: | Matthias KalkuhlORCiDGND, Leonie WenzORCiDGND |
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DOI: | https://doi.org/10.1016/j.jeem.2020.102360 |
ISSN: | 0095-0696 |
ISSN: | 1096-0449 |
Title of parent work (English): | Journal of Environmental Economics and Management |
Subtitle (English): | evidence from a global panel of regions |
Publisher: | Elsevier |
Place of publishing: | San Diego |
Publication type: | Article |
Language: | English |
Date of first publication: | 2020/08/04 |
Publication year: | 2020 |
Release date: | 2024/01/11 |
Tag: | climate change; climate damages; climate impacts; cross-sectional regression; damage; function; global warming; growth regression; panel regression; social costs of carbon |
Volume: | 103 |
Article number: | 102360 |
Number of pages: | 20 |
Funding institution: | European Union Seventh Framework Programme FP7/2007-2013 [603864]; S. V.; Ciriacy-Wantrup Fellowship programme at UC Berkeley; Volkswagen; foundationVolkswagen |
Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften |
Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Volkswirtschaftslehre | |
DDC classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
5 Naturwissenschaften und Mathematik / 55 Geowissenschaften, Geologie / 550 Geowissenschaften | |
Peer review: | Referiert |
Publishing method: | Open Access / Hybrid Open-Access |
License (German): | CC-BY-NC-ND - Namensnennung, nicht kommerziell, keine Bearbeitungen 4.0 International |