Cut and dry
Climatic Constraints on Aggregate Economic Output
Marshall Burke & Vincent Tanutama
NBER Working Paper, April 2019
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.
Children can foster climate change concern among their parents
Danielle Lawson et al.
Nature Climate Change, forthcoming
Abstract:
The collective action that is required to mitigate and adapt to climate change is extremely difficult to achieve, largely due to socio-ideological biases that perpetuate polarization over climate change. Because climate change perceptions in children seem less susceptible to the influence of worldview or political context, it may be possible for them to inspire adults towards higher levels of climate concern, and in turn, collective action. Child-to-parent intergenerational learning — that is, the transfer of knowledge, attitudes or behaviours from children to parents — may be a promising pathway to overcoming socio-ideological barriers to climate concern. Here we present an experimental evaluation of an educational intervention designed to build climate change concern among parents indirectly through their middle school-aged children in North Carolina, USA. Parents of children in the treatment group expressed higher levels of climate change concern than parents in the control group. The effects were strongest among male parents and conservative parents, who, consistent with previous research, displayed the lowest levels of climate concern before the intervention. Daughters appeared to be especially effective in influencing parents. Our results suggest that intergenerational learning may overcome barriers to building climate concern.
Destructive Behavior, Judgment, and Economic Decision-making under Thermal Stress
Ingvild Almås et al.
NBER Working Paper, April 2019
Abstract:
Accumulating evidence indicates that environmental temperature substantially affects economic outcomes and violence, but the reasons for this linkage are not well understood. We systematically evaluate the effect of thermal stress on multiple dimensions of economic decisionmaking, judgment, and destructive behavior with 2,000 participants in Kenya and the US who were randomly assigned to different temperatures in a laboratory. We find that most dimensions of decision-making are unaffected by temperature. However, heat causes individuals to voluntarily destroy other participants’ assets, with more pronounced effects during a period of heightened political conflict in Kenya.
Deceptive sustainability: Cognitive bias in people’s judgment of the benefits of CO2 emission cuts
Mattias Holmgren et al.
Journal of Environmental Psychology, forthcoming
Abstract:
People’s beliefs in the actions necessary to reduce anthropogenic carbon dioxide (CO2) emissions are important to public policy acceptability. The current paper addressed beliefs concerning how periods of small emission cuts contribute to the total CO2 concentration in the atmosphere, by asking participants to rate the atmospheric CO2 concentration for various time periods and emission rates. The participants thought that a time period with higher emission rates combined with a period of lower emission rates generates less atmospheric CO2 in total, compared to the period with high emission rates alone – demonstrating a negative footprint illusion (Study 1). The participants appeared to base their CO2 estimates on the average, rather than on the accumulated sum, of the two periods’ emissions – i.e. an averaging bias (Study 2). Moreover, the effect was robust to the wordings of the problem presented to the participants (Study 3). Together, these studies suggest that the averaging bias makes people exaggerate the benefits of small emission cuts. The averaging bias could make people willing to accept policies that reduce emission rates although insufficiently to alleviate global warming.
Hurricanes, Climate Change Policies and Electoral Accountability
Stefano Gagliarducci, Daniele Paserman & Eleonora Patacchini
NBER Working Paper, May 2019
Abstract:
This paper studies how politicians and voters respond to new information on the threats of climate change. Using data on the universe of federal disaster declarations between 1989 and 2014, we document that Congress members from districts hit by a hurricane are more likely to support bills promoting more environmental regulation and control in the year after the disaster. The response to hurricanes does not seem to be driven by logrolling behavior or lobbyists' pressure. The change in legislative agenda is persistent over time, and it is associated with an electoral penalty in the following elections. The response is mainly promoted by representatives in safe districts, those with more experience, and those with strong pro-environment records. Our evidence thus reveals that natural disasters may trigger a permanent change in politicians' beliefs, but only those with a sufficient electoral strength or with strong ideologies are willing to engage in promoting policies with short-run costs and long-run benefits.
Nudging out support for a carbon tax
David Hagmann, Emily Ho & George Loewenstein
Nature Climate Change, forthcoming
Abstract:
A carbon tax is widely accepted as the most effective policy for curbing carbon emissions but is controversial because it imposes costs on consumers. An alternative, ‘nudge,’ approach promises smaller benefits but with much lower costs. However, nudges aimed at reducing carbon emissions could have a pernicious indirect effect if they offer the promise of a ‘quick fix’ and thereby undermine support for policies of greater impact. Across six experiments, including one conducted with individuals involved in policymaking, we show that introducing a green energy default nudge diminishes support for a carbon tax. We propose that nudges decrease support for substantive policies by providing false hope that problems can be tackled without imposing considerable costs. Consistent with this account, we show that minimizing the perceived economic cost of the tax and disclosing the small impact of the nudge eliminates crowding-out without diminishing support for the nudge.
Making Carbon Taxation a Generational Win-Win
Laurence Kotlikoff et al.
NBER Working Paper, April 2019
Abstract:
Carbon taxation has been studied primarily in social planner or infinitely lived agent models, which trade off the welfare of future and current generations. Such frameworks obscure the potential for carbon taxation to produce a generational win-win. This paper develops a large-scale, dynamic 55-period, OLG model to calculate the carbon tax policy delivering the highest uniform welfare gain to all generations. The OLG framework, with its selfish generations, seems far more natural for studying climate damage. Our model features coal, oil, and gas, each extracted subject to increasing costs, a clean energy sector, technical and demographic change, and Nordhaus (2017)’s temperature/damage functions. Our model’s optimal uniform welfare increasing (UWI) carbon tax starts at $30 tax, rises annually at 1.5 percent and raises the welfare of all current and future generations by 0.73 percent on a consumption-equivalent basis. Sharing efficiency gains evenly requires, however, taxing future generations by as much as 8.1 percent and subsidizing early generations by as much as 1.2 percent of lifetime consumption. Without such redistribution (the Nordhaus “optimum”), the carbon tax constitutes a win-lose policy with current generations experiencing an up to 0.84 percent welfare loss and future generations experiencing an up to 7.54 percent welfare gain. With a six-times larger damage function, the optimal UWI initial carbon tax is $70, again rising annually at 1.5 percent. This policy raises all generations’ welfare by almost 5 percent. However, doing so requires levying taxes on and giving transfers to future and current generations ranging up to 50.1 percent and 10.3 percent of their lifetime consumption. Delaying carbon policy, for 20 years, reduces efficiency gains roughly in half.
Loss-Framed Arguments Can Stifle Political Activism
Adam Seth Levine & Reuben Kline
Journal of Experimental Political Science, forthcoming
Abstract:
Research commonly finds that citizens are loss averse: they dislike losses far more than similarly sized gains. One implication is that arguments for policy change framed in terms of losses to be avoided often have a larger impact on public opinion than arguments framed in terms of gains to be enjoyed. Although several scholars have observed this pattern with respect to public opinion, we know far less about the effect of loss- and gain-framed arguments on political activism. This is a critical omission given the disproportionate impact of political activists on the policymaking process. Using field and survey experiments, we investigate the impact of gain- and loss-framed arguments on climate change activism. We find that loss-framed arguments can be less mobilizing, even when they are otherwise more persuasive, than gain-framed arguments. Our results deepen our theoretical understanding of what motivates political activism, especially in an era of professionalized politics.
Unemployment, Labor Mobility, and Climate Policy
Kenneth Castellanos & Garth Heutel
NBER Working Paper, May 2019
Abstract:
We develop a computable general equilibrium model of the United States economy to study the unemployment effects of climate policy and the importance of cross-sectoral labor mobility. We consider two alternate extreme assumptions about labor mobility: either perfect mobility, as is assumed in much previous work, or perfect immobility. The effect of a $35 per ton carbon tax on aggregate unemployment is small and similar across the two labor mobility assumptions (0.2–0.3 percentage points). The effect on unemployment in fossil fuel sectors is much larger under the immobility assumption – a 30 percentage-point increase in the coal sector – suggesting that models omitting labor mobility frictions may greatly under-predict sectoral unemployment effects. Returning carbon tax revenue through labor tax cuts can dampen or even reverse negative impacts on unemployment, while command-and-control policies yield larger unemployment effects.
Weather, Climate and Total Factor Productivity
Marco Letta & Richard Tol
Environmental and Resource Economics, May 2019, Pages 283–305
Abstract:
Recently it has been hypothesized that climate change will affect total factor productivity growth. Given the importance of TFP for long-run economic growth, if true this would entail a substantial upward revision of current impact estimates. Using macro TFP data from a recently developed dataset in the Penn World Table, we test this hypothesis by directly examining the nature of the relationship between annual temperature shocks and TFP growth rates in the period 1960–2006. The results show a negative relationship only exists in poor countries, where a 1 °C annual increase in temperature decreases TFP growth rates by about 1.1–1.8 percentage points, whereas the impact is indistinguishable from zero in rich countries. Extrapolating from weather to climate, the possibility of dynamic effects of climate change in poor countries increases concerns over the distributional issues of future impacts and, from a policy perspective, restates the case for complementarity between climate policy and poverty reduction.
Climate change and educational attainment in the global tropics
Heather Randell & Clark Gray
Proceedings of the National Academy of Sciences, 30 April 2019, Pages 8840-8845
Abstract:
Climate change may negatively impact education among children via exposure to extreme temperature and precipitation conditions. We link census data from 29 countries across the global tropics to high-resolution gridded climate data to understand how climatic conditions experienced in utero and during early childhood affect educational attainment at ages 12 to 16. We show that exposure to higher-than-average temperatures during the prenatal and early-life period is associated with fewer years of schooling in Southeast Asia. In this region, a child who experiences temperatures 2 SDs above average is predicted to attain 1.5 fewer years of schooling than one who experiences average temperatures. In addition, early-life rainfall is positively correlated with attainment in West and Central Africa as well as Southeast Asia, and negatively correlated with attainment in Central America and the Caribbean. While we expected that children from the most educated households would be buffered from these effects, we discover that they tend to experience the greatest educational penalties when exposed to hotter early-life conditions and, in some regions, to drier conditions. For example, among the most educated households in West and Central Africa, predicted schooling is 1.8 years lower for children who experience early-life rainfall 2 SDs below average versus 2 SDs above average, while the difference is just 0.8 years for children from the least educated households. These results suggest that development and educational gains in the tropics could be undermined by climate change, even for better-off households.
The impact of climate change on fertility
Gregory Casey et al.
Environmental Research Letters, May 2019
Abstract:
We examine the potential for climate change to impact fertility via adaptations in human behavior. We start by discussing a wide range of economic channels through which climate change might impact fertility, including sectoral reallocation, the gender wage gap, longevity, and child mortality. Then, we build a quantitative model that combines standard economic-demographic theory with existing estimates of the economic consequences of climate change. In the model, increases in global temperature affect agricultural and non-agricultural sectors differently. Near the equator, where many poor countries are located, climate change has a larger negative effect on agriculture. The resulting scarcity in agricultural goods acts as a force towards higher agricultural prices and wages, leading to a labor reallocation into this sector. Since agriculture makes less use of skilled labor, climate damage decreases the return to acquiring skills, inducing parents to invest less resources in the education of each child and to increase fertility. These patterns are reversed at higher latitudes, suggesting that climate change may exacerbate inequities by reducing fertility and increasing education in richer northern countries, while increasing fertility and reducing education in poorer tropical countries. While the model only examines the role of one mechanism, it suggests that climate change could have an impact on fertility, indicating the need for future work on this important topic.
Twentieth-century hydroclimate changes consistent with human influence
Kate Marvel et al.
Nature, 2 May 2019, 59–65
Abstract:
Although anthropogenic climate change is expected to have caused large shifts in temperature and rainfall, the detection of human influence on global drought has been complicated by large internal variability and the brevity of observational records. Here we address these challenges using reconstructions of the Palmer drought severity index obtained with data from tree rings that span the past millennium. We show that three distinct periods are identifiable in climate models, observations and reconstructions during the twentieth century. In recent decades (1981 to present), the signal of greenhouse gas forcing is present but not yet detectable at high confidence. Observations and reconstructions differ significantly from an expected pattern of greenhouse gas forcing around mid-century (1950–1975), coinciding with a global increase in aerosol forcing. In the first half of the century (1900–1949), however, a signal of greenhouse-gas-forced change is robustly detectable. Multiple observational datasets and reconstructions using data from tree rings confirm that human activities were probably affecting the worldwide risk of droughts as early as the beginning of the twentieth century.
Future Extreme Event Risk in the Rural Northeastern United States
Jonathan Winter et al.
Annals of the American Association of Geographers, forthcoming
Abstract:
Future climate change impacts on humans will be determined by the convergence of evolving physical climate and socioeconomic systems. Rural areas of the northeastern United States have experienced increased temperature and precipitation extremes, especially over the past three decades, and face unique challenges due to their physical isolation, natural-resource–dependent economies, and high poverty rates. To explore the impacts of future extreme events on vulnerable, rural populations in the Northeast, we analyzed future (2046–2075) annual maximum daily maximum temperature, annual minimum daily minimum temperature, annual maximum daily precipitation, and annual minimum two-week summer precipitation for two greenhouse gas emissions scenarios using four global climate models and gridded temperature and precipitation observations. We then combined those projections with estimates of county-level population and relative income for 2060 to calculate changes in extreme person-events compared to a historical period (1976–2005), with a focus on Northeast counties that are rural (less than 250,000 people) and vulnerable (in the bottom income quartile). For all counties and lowest income quartile counties in the rural Northeast, extreme heat person-events increase nineteen-fold and twenty-nine fold, respectively, under the high greenhouse gas emissions scenario, far exceeding the decrease in extreme cold person-events. The number of extreme precipitation and drought person-events does not significantly change across the rural Northeast. For the high greenhouse gas emissions scenario, counties in the bottom two income quartiles experience the 1976–2005 once-per-year daily heat event twenty-three times per year by 2046–2075; the lower greenhouse gas emissions scenario reduces the incidence to eleven times per year.
Considering adaptive genetic variation in climate change vulnerability assessment reduces species range loss projections
Orly Razgour et al.
Proceedings of the National Academy of Sciences, 21 May 2019, Pages 10418-10423
Abstract:
Local adaptations can determine the potential of populations to respond to environmental changes, yet adaptive genetic variation is commonly ignored in models forecasting species vulnerability and biogeographical shifts under future climate change. Here we integrate genomic and ecological modeling approaches to identify genetic adaptations associated with climate in two cryptic forest bats. We then incorporate this information directly into forecasts of range changes under future climate change and assessment of population persistence through the spread of climate-adaptive genetic variation (evolutionary rescue potential). Considering climate-adaptive potential reduced range loss projections, suggesting that failure to account for intraspecific variability can result in overestimation of future losses. On the other hand, range overlap between species was projected to increase, indicating that interspecific competition is likely to play an important role in limiting species’ future ranges. We show that although evolutionary rescue is possible, it depends on a population’s adaptive capacity and connectivity. Hence, we stress the importance of incorporating genomic data and landscape connectivity in climate change vulnerability assessments and conservation management.
Greater vulnerability to warming of marine versus terrestrial ectotherms
Malin Pinsky et al.
Nature, 2 May 2019, Pages 108–111
Abstract:
Understanding which species and ecosystems will be most severely affected by warming as climate change advances is important for guiding conservation and management. Both marine and terrestrial fauna have been affected by warming but an explicit comparison of physiological sensitivity between the marine and terrestrial realms has been lacking. Assessing how close populations live to their upper thermal limits has been challenging, in part because extreme temperatures frequently drive demographic responses and yet fauna can use local thermal refugia to avoid extremes. Here we show that marine ectotherms experience hourly body temperatures that are closer to their upper thermal limits than do terrestrial ectotherms across all latitudes — but that this is the case only if terrestrial species can access thermal refugia. Although not a direct prediction of population decline, this thermal safety margin provides an index of the physiological stress caused by warming. On land, the smallest thermal safety margins were found for species at mid-latitudes where the hottest hourly body temperatures occurred; by contrast, the marine species with the smallest thermal safety margins were found near the equator. We also found that local extirpations related to warming have been twice as common in the ocean as on land, which is consistent with the smaller thermal safety margins at sea. Our results suggest that different processes will exacerbate thermal vulnerability across these two realms. Higher sensitivities to warming and faster rates of colonization in the marine realm suggest that extirpations will be more frequent and species turnover faster in the ocean. By contrast, terrestrial species appear to be more vulnerable to loss of access to thermal refugia, which would make habitat fragmentation and changes in land use critical drivers of species loss on land.