Climatic Constraints on Aggregate Economic Output

Marshall Burke · Vincent Tanutama

126 citations0/0 files storedNational Bureau of Economic Research

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Climate Change Policy and Economics Climate change impacts on agriculture Climate Change and Health Impacts

Abstract

Efficient responses to climate change require accurate estimates of both aggregate damages and where and to whom they occur.While specific case studies and simulations have suggested that climate change disproportionately affects the poor, large-scale direct evidence of the magnitude and origins of this disparity is lacking.Similarly, evidence on aggregate damages, which is a central input into the evaluation of mitigation policy, often relies on country-level data whose accuracy has been questioned.Here we assemble longitudinal data on economic output from over 11,000 districts across 37 countries, including previously nondigitized sources in multiple languages, to assess both the aggregate and distributional impacts of warming temperatures.We find that local-level growth in aggregate output responds non-linearly to temperature across all regions, with output peaking at cooler temperatures (<10°C) than estimated in earlier country analyses and declining steeply thereafter.Long difference estimates of the impact of longer-term (decadal) trends in temperature on income are larger than estimates from an annual panel model, providing additional evidence for growth effects.Impacts of a given temperature exposure do not vary meaningfully between rich and poor regions, but exposure to damaging temperatures is much more common in poor regions.These results indicate that additional warming will exacerbate inequality, particularly across countries, and that economic development alone will be unlikely to reduce damages, as commonly hypothesized.We estimate that since 2000, warming has already cost both the US and the EU at least $4 trillion in lost output, and tropical countries are >5% poorer than they would have been without this warming.

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References

2015Global non-linear effect of temperature on economic production 2012Temperature Shocks and Economic Growth: Evidence from the Last Half Century 2016Social and economic impacts of climate 2017Estimating economic damage from climate change in the United States 2017The irreversible momentum of clean energy 2015Shock Waves: Managing the Impacts of Climate Change on Poverty 2017Temperature effects on productivity and factor reallocation: Evidence from a half million chinese manufacturing plants 2009Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates

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