Climate Change and Economic Growth: Evidence from the Last Half Century

Dell, Melissa; Jones, Benjamin; Olken, Benjamin A.

doi:10.3386/w14132

Cited by 198 publications

(187 citation statements)

References 37 publications

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“…On the other hand, if the two effects are opposite, the direct effect would prevail at first, then the capital accumulation will eventually drive the economic growth, possibly inverting the sign of the total effects. Dell et al (2008) find evidence that changes in temperature have a long lasting impact on economic growth, particularly for poor countries, but do not provide a convincing explanation for this effect. 7 In the ICES model, instead, we are able to analyze how the various climate change impacts may affect the capital rate of return, thereby influencing the allocation of international investments.…”

Section: The Ices Modelmentioning

confidence: 85%

Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model

Eboli

Parrado

Roson³

2010

Envir. Dev. Econ.

172

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SummaryHuman-generated greenhouse gases depend on the level of economic activity. Therefore, most climate change studies are based on models and scenarios of economic growth. Economic growth itself, however, is likely to be affected by climate change impacts. These impacts affect the economy in multiple and complex ways: changes in productivity, resource endowments, production and consumption patterns. We use a new dynamic, multi-regional Computable General Equilibrium (CGE) model of the world economy to answer the following questions: Will climate change impacts significantly affect growth and wealth distribution in the world? Should forecasts of human-induced greenhouse gases emissions be revised, once climate change impacts are taken into account? We found that, even though economic growth and emission paths do not change significantly at the global level, relevant differences exist at the regional and sectoral level. In particular, developing countries appear to suffer the most from climate change impacts. SummaryHuman-generated greenhouse gases depend on the level of economic activity. Therefore, most climate change studies are based on models and scenarios of economic growth. Economic growth itself, however, is likely to be affected by climate change impacts. These impacts affect the economy in multiple and complex ways: changes in productivity, resource endowments, production and consumption patterns. We use a new dynamic, multi-regional Computable General Equilibrium (CGE) model of the world economy to answer the following questions: Will climate change impacts significantly affect growth and wealth distribution in the world? Should forecasts of human induced greenhouse gases emissions be revised, once climate change impacts are taken into account? We found that, even though economic growth and emission paths do not change significantly at the global level, relevant differences exist at the regional and sectoral level. In particular, developing countries appear to suffer the most from climate change impacts.

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Section: The Ices Modelmentioning

confidence: 85%

Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model

Eboli

Parrado

Roson³

2010

Envir. Dev. Econ.

172

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“…Using historical data on temperatures and precipitation over the past 50 years for a panel of 136 countries, Dell, Jones, and Olken (2008) have shown that higher temperatures reduce GDP growth rates but not levels. The impact they estimate is large -a decrease of 1.1 percentage points of growth for each 1 • C rise in temperature -but significant only for poorer countries.…”

Section: Economic Impactmentioning

confidence: 99%

Uncertain Outcomes and Climate Change Policy

Pindyck¹

2009

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Focusing on tail effects, I incorporate distributions for temperature change and its economic impact in an analysis of climate change policy. I estimate the fraction of consumption w*(tau) that society would be willing to sacrifice to ensure that any increase in temperature at a future point is limited to tau. Using information on the distributions for temperature change and economic impact from studies assembled by the IPCC and from "integrated assessment models" (IAMs), I fit displaced gamma distributions for these variables. Unlike existing IAMs, I model economic impact as a relationship between temperature change and the growth rate of GDP as opposed to its level, so that warming has a permanent impact on future GDP. The fitted distributions for temperature change and economic impact generally yield values of w*(tau) below 2%, even for small values of tau, unless one assumes extreme parameter values and/or substantial shifts in the temperature distribution. These results are consistent with moderate abatement policies.

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“…It remains however, that in spite of their very wide use in the CC impact literature, IAMs are based on aggregation of effects on selected subsets of sectors and impact mechanisms separately measured under a host of strong assumptions (Stern, 2007, Dell et al, 2008.…”

Section: Total Impact Assessment Modelsmentioning

confidence: 99%

“…To address this shortcoming of adding up effects of separately specified impact pathways, Dell et al (2008) analyzed effects of annual variations of rainfall and temperature on aggregate growth indicators for countries across the world. This approach avoids the need to make assumptions about what impact mechanisms to include and how they interact to generate aggregate impacts.…”

Section: Total Impact Assessment Modelsmentioning

confidence: 99%

“…This model therefore represents an asset (land) valuation method which postulates that farmland value reflects the present value of future net farm revenue from all activities. It assesses performance of farms by quantifying impacts on agricultural productivity 1 To address this aspect, the Dell et al (2008) (Kurukulasyriya et al, 2006;Kurukulasyuriya and Mendelsohn, 2008;Hassan and Nhemachena, 2008;Dinar et al, 2008;Seo et al, 2009;Hassan, 2010;Nhemachena et al, 2010). The cross-section method automatically captures farmers' adaptation responses, assuming that cross-section variations reflect different states of long-term equilibria (inter-temporal changes).…”

Section: Cross-section Impact Assessment Modelsmentioning

confidence: 99%

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The double challenge of adapting to climate change while accelerating development in sub-Saharan Africa

Hassan¹

2010

Envir. Dev. Econ.

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ABSTRACT. Accelerating economic growth and social development is necessary to reduce the vulnerability and enhance the adaptive capacity of sub-Saharan Africa to cope with the consequences of predicted unfavorable future climate. This requires major investments and policy reforms to induce a needed radical transformation of the way development is currently pursued to a more climate-sensitive path of low carbon growth. Key gaps in the current knowledge base that call for major investments and urgent attention include the ability to forecast more robust local future climate and to account for the uncertainties associated with climate risks for ecosystems' functions and probable nonconvexities in future impacts to project more plausible scenarios for future development in sub-Saharan Africa and provide better information on the costs and benefits of potential actions to avert the negative consequences of climate change.

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Climate Change and Economic Growth: Evidence from the Last Half Century

Cited by 198 publications

References 37 publications

Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model

Climate-change feedback on economic growth: explorations with a dynamic general equilibrium model

Uncertain Outcomes and Climate Change Policy

The double challenge of adapting to climate change while accelerating development in sub-Saharan Africa

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