This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added. (JEL E01, L94, Q53, Q56)
Measurement of the likely magnitude of the economic impact of climate change on African agriculture has been a challenge. Using data from a survey of more than 9,000 farmers across 11 African countries, a cross-sectional approach estimates how farm net revenues are affected by climate change compared with current mean temperature. Revenues fall with warming for dryland crops (temperature elasticity of -1.9) and livestock (-5.4), whereas revenues rise for irrigated crops (elasticity of 0.5), which are located in relatively cool parts of Africa and are buffered by irrigation from the effects of warming. At first, warming has little net aggregate effect as the gains for irrigated crops offset the losses for dryland crops and livestock. Warming, however, will likely reduce dryland farm income immediately. The final effects will also depend on changes in precipitation, because revenues from all farm types increase with precipitation. Because irrigated farms are less sensitive to climate, where water is available, irrigation is a practical adaptation to climate change in Africa.
This paper examines the impact of climate change on rich and poor countries across the world. We measure two indices of the relative impact of climate across countries, impact per capita, and impact per GDP. These measures sum market impacts across the climate-sensitive economic sectors of each country. Both indices reveal that climate change will have serious distributional impact across countries, grouped by income per capita. We predict that poor countries will suffer the bulk of the damages from climate change. Although adaptation, wealth, and technology may influence distributional consequences across countries, we argue that the primary reason that poor countries are so vulnerable is their location. Countries in the low latitudes start with very high temperatures. Further warming pushes these countries ever further away from optimal temperatures for climate-sensitive economic sectors.
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