1932

Abstract

Identifying the effect of climate on societies is central to understanding historical economic development, designing modern policies that react to climatic events, and managing future global climate change. Here, I review, synthesize, and interpret recent advances in methods used to measure effects of climate on social and economic outcomes. Because weather variation plays a large role in recent progress, I formalize the relationship between climate and weather from an econometric perspective and discuss the use of these two factors as identifying variation, highlighting trade-offs between key assumptions in different research designs and deriving conditions when weather variation exactly identifies the effects of climate. I then describe recent advances, such as the parameterization of climate variables from a social perspective, use of nonlinear models with spatial and temporal displacement, characterization of uncertainty, measurement of adaptation, cross-study comparison, and use of empirical estimates to project the impact of future climate change. I conclude by discussing remaining methodological challenges.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-resource-100815-095343
2016-10-05
2024-04-17
Loading full text...

Full text loading...

/deliver/fulltext/resource/8/1/annurev-resource-100815-095343.html?itemId=/content/journals/10.1146/annurev-resource-100815-095343&mimeType=html&fmt=ahah

Literature Cited

  1. Albouy D, Graf W, Kellogg R, Wolff H. 2010. Aversion to extreme temperatures, climate change and quality of life Work. Pap., Univ. Mich., Ann Arbor, MI
  2. Angrist JD, Pischke JS. 2008. Mostly Harmless Econometrics: An Empiricist's Companion Princeton, NJ: Princeton Univ. Press [Google Scholar]
  3. Annan F, Schlenker W. 2015. Federal crop insurance and the disincentive to adapt to extreme heat. Am. Econ. Rev. 105:262–66 [Google Scholar]
  4. Anttila-Hughes JK, Hsiang SM. 2012. Destruction, disinvestment, and death: economic and human losses following environmental disaster Work. Pap., Univ. San Francisco
  5. Aroonruengsawat A, Auffhammer M. 2011. Impacts of climate change on residential electricity consumption: evidence from billing data. The Economics of Climate Change: Adaptations Past and Present, ed. GD Libecap, RH Steckel311–42 Chicago: Univ. Chicago Press [Google Scholar]
  6. Auffhammer M, Aroonruengsawat A. 2011. Simulating the impacts of climate change, prices and population on California's residential electricity consumption. Clim. Change 109:191–210 [Google Scholar]
  7. Auffhammer M, Hsiang S, Schlenker W, Sobel A. 2013. Using weather data and climate model output in economic analyses of climate change.. Rev. Environ. Econ. Policy 7:181–98
  8. Auffhammer M, Mansur ET. 2014. Measuring climatic impacts on energy consumption: a review of the empirical literature. Energy Econ. 46:522–30
  9. Auffhammer M, Ramanathan V, Vincent JR. 2006. Integrated model shows that atmospheric brown clouds and greenhouse gases have reduced rice harvests in India. PNAS 10319668–72
  10. Auffhammer M, Schlenker W. 2014. Empirical studies on agricultural impacts and adaptation. Energy Econ. 46:555–61
  11. Bai Y, Kung J. 2011. Climate shocks and Sino-nomadic conflict. Rev. Econ. Stat. 93:970–81
  12. Barreca A, Clay K, Deschênes O, Greenstone M, Shapiro JS. 2013. Adapting to climate change: the remarkable decline in the US temperature-mortality relationship over the 20th century NBER Work. Pap. 18692
  13. Barreca A, Deschênes O, Guldi M. 2015. Maybe next month? Temperature shocks, climate change, and dynamic adjustments in birth rates NBER Work. Pap. 21681
  14. Baxter M, King RG. 1999. Measuring business cycles: approximate band-pass filters for economic time series. Rev. Econ. Stat. 81575–93
  15. Baylis P. 2015. Temperature and temperament: evidence from a billion tweets Work. Pap. 265, Energy Inst., Univ. Calif., Berkeley, CA
  16. Bertrand M, Duflo E, Mullainathan S. 2004. How much should we trust differences-in-differences estimates?. Q. J. Econ. 119:249–75 [Google Scholar]
  17. Burgess R, Deschênes O, Donaldson D, Greenstone M. 2014. The unequal effects of weather and climate change: evidence from mortality in India Work. Pap., London Sch. Econ., London
  18. Burke M, Dykema J, Lobell DB, Miguel E, Satyanath S. 2015a. Incorporating climate uncertainty into estimates of climate change impacts. Rev. Econ. Stat. 97461–71
  19. Burke M, Emerick K. 2016. Adaptation to climate change: evidence from US agriculture. Am. Econ. J. Econ. Policy 8(3)106–40
  20. Burke M, Hsiang SM, Miguel E. 2015b. Climate and conflict. Annu. Rev. Econ. 7:577–617
  21. Burke M, Hsiang SM, Miguel E. 2015c. Global non-linear effect of temperature on economic production. Nature 527:235–39 [Google Scholar]
  22. Burke M, Miguel E, Satyanath S, Dykema J, Lobell D. 2009. Warming increases the risk of civil war in Africa. PNAS 10620670
  23. Camargo SJ, Hsiang SM. 2016. Tropical cyclones: from the influence of climate to their socioeconomic impacts. Extreme Events: Observations, Modeling, and Economics M Chavez, M Ghil, J Urrutia-Fucugauchi 303–42 Washington, DC: AGU/Wiley [Google Scholar]
  24. Carleton T, Hsiang S. 2016. Social and economic impacts of climate. Science. In press
  25. Colmer J. 2016. Weather, labour reallocation, and industrial production: evidence from India Work. Pap., London Sch. Econ., London
  26. Conley T. 1999. GMM estimation with cross sectional dependence. J. Econom. 921–45
  27. Costinot A, Donaldson D, Smith C. 2016. Evolving comparative advantage and the impact of climate change in agricultural markets: evidence from a 9 million-field partition of the earth. J. Polit. Econ. 124(1)205–48
  28. Couttenier M, Soubeyran R. 2014. Drought and civil war in sub-Saharan Africa. Econ. J. 124:201–44 [Google Scholar]
  29. Dell M, Jones BF, Olken BA. 2009. Temperature and income: reconciling new cross-sectional and panel estimates. Am. Econ. Rev. Pap. Proc. 99198–204
  30. Dell M, Jones BF, Olken BA. 2012. Temperature shocks and economic growth: evidence from the last half century. Am. Econ. J. Macroecon. 466–95
  31. Dell M, Jones BF, Olken BA. 2014. What do we learn from the weather? The new climate-economy literature. J. Econ. Lit. 52740–98
  32. Deryugina T. 2015. Disaster insurance versus social insurance in the aftermath of hurricanes Work. Pap., Cent. Energy Environ. Policy, MIT, Cambridge, MA
  33. Deryugina T, Hsiang SM. 2014. Does the environment still matter? Temperature and income in the United States NBER Work. Pap. 20750
  34. Deschênes O. 2014. Temperature, human health, and adaptation: a review of the empirical literature. Energy Econ 46606–19
  35. Deschênes O, Greenstone M. 2007. The economic impacts of climate change: evidence from agricultural output and random fluctuations in weather. Am. Econ. Rev. 97354–85
  36. Deschênes O, Greenstone M. 2011. Climate change, mortality, and adaptation: evidence from annual fluctuations in weather in the US. Am. Econ. J. Appl. Econ. 3152–85
  37. Deschênes O, Moretti E. 2009. Extreme weather events, mortality and migration. Rev. Econ. Stat. 91659–81
  38. Desmet K, Rossi-Hansberg E. 2015. On the spatial economic impact of global warming. J. Urban Econ. 8816–37
  39. Fankhauser S. 1995. Valuing Climate Change: The Economics of the Greenhouse London: Earthscan
  40. Fetzer T. 2014. Can workfare programs moderate violence? Evidence from India Work. Pap., London Sch. Econ., London
  41. Fishman R. 2016. More uneven distributions overturn benefits of higher precipitation for crop yields. Environ. Res. Lett. 11024004
  42. Gelman A, Carlin JB, Stern HS, Rubin DB. 2004. Bayesian Data Analysis Boca Raton, FL: CRC
  43. Graff Zivin J, Neidell M. 2014. Temperature and the allocation of time: implications for climate change. J. Labor Econ. 321–26
  44. Graff Zivin J, Hsiang SM, Neidell MJ. 2015. Temperature and human capital in the short- and long-run NBER Work. Pap. 21157
  45. Guiteras R, Jina A, Mobarak AM. 2015. Satellites, self-reports, and submersion: exposure to floods in Bangladesh. Am. Econ. Rev. 105232–36
  46. Guo Y, Gasparrini A, Armstrong B, Li S, Tawatsupa B. et al. 2014. Global variation in the effects of ambient temperature on mortality: a systematic evaluation. Epidemiology 25:781–89 [Google Scholar]
  47. Harari M, La Ferrara E. 2013. Conflict, climate and cells: a disaggregated analysis Disc. Pap. DP9277, Cent. Energy Environ. Policy, MIT, Cambridge, MA
  48. Heal G, Park J. 2015. Goldilocks economies? Temperature stress and the direct impacts of climate change NBER Work. Pap. 21119
  49. Hidalgo F, Naidu S, Nichter S, Richardson N. 2010. Economic determinants of land invasions. Rev. Econ. Stat. 92505–23
  50. Hocking C, Silberstein RB, Lau WM, Stough C, Roberts W. 2001. Evaluation of cognitive performance in the heat by functional brain imaging and psychometric testing. Comp. Biochem. Physiol. A 128:719–34 [Google Scholar]
  51. Holland P. 1986. Statistics and causal inference. J. Am. Stat. Assoc. 81945–60
  52. Hornbeck R. 2012. The enduring impact of the American Dust Bowl: short and long-run adjustments to environmental catastrophe. Am. Econ. Rev. 102:1477–507 [Google Scholar]
  53. Hornbeck R, Keskin P. 2015. Does agriculture generate local economic spillovers? Short-run and long-run evidence from the Ogallala Aquifer. Am. Econ. J. Econ. Policy 7192–213
  54. Houser T, Hsiang SM, Kopp R, Larsen K, Delgado M. et al. 2015. Economic Risks of Climate Change: An American Prospectus New York: Columbia Univ. Press
  55. Hsiang SM. 2010. Temperatures and cyclones strongly associated with economic production in the Caribbean and Central America. PNAS 107:15367–72 [Google Scholar]
  56. Hsiang SM, Burke M. 2014. Climate, conflict, and social stability: What does the evidence say?. Clim. Change 123:39–55 [Google Scholar]
  57. Hsiang SM, Burke M, Miguel E. 2013. Quantifying the influence of climate on human conflict. Science 3411235367
  58. Hsiang SM, Burke M, Miguel E, Cane MA, Meng KC. 2015. Analysis of statistical power reconciles climate-conflict results in Africa Work. Pap. 053, Cent. Eff. Glob. Action, Univ. Calif., Berkeley, CA
  59. Hsiang SM, Jina AS. 2014. The causal effect of environmental catastrophe on long-run economic growth: evidence from 6,700 cyclones NBER Work. Pap. 20352
  60. Hsiang SM, Jina AS. 2015. Geography, depreciation, and growth. Am. Econ. Rev. 105:252–56 [Google Scholar]
  61. Hsiang SM, Meng KC. 2014. Reconciling disagreement over climate–conflict results in Africa. PNAS 111:2100–3 [Google Scholar]
  62. Hsiang SM, Meng K, Cane M. 2011. Civil conflicts are associated with the global climate. Nature 476438–41
  63. Hsiang SM, Narita D. 2012. Adaptation to cyclone risk: evidence from the global cross-section. Clim. Change Econ. 31–28
  64. Huntington E. 1922. Civilization and Climate New Haven, CT: Yale Univ. Press
  65. Kopp RE, Hsiang SM, Oppenheimer M. 2013. Empirically calibrating damage functions and considering stochasticity when integrated assessment models are used as decision tools Presented at Int. Conf. Clim. Change Eff., Potsdam, Ger.
  66. Kousky C. 2014. Informing climate adaptation: a review of the economic costs of natural disasters. Energy Econ 46576–92
  67. Kurukulasuriya P, Mendelsohn RO. 2008. A Ricardian analysis of the impact of climate change on African cropland. Afr. J. Agric. Resour. Econ. 2:1105–26 [Google Scholar]
  68. Lobell DB, Asner GP. 2003. Climate and management contributions to recent trends in US agricultural yields. Science 2991032
  69. Lobell DB, Burke MB, Tebaldi C, Mastrandrea MD, Falcon WP, Naylor RL. 2008. Prioritizing climate change adaptation needs for food security in 2030. Science 319:607–10 [Google Scholar]
  70. Lobell DB, Hammer GL, McLean G, Messina C, Roberts MJ, Schlenker W. 2013. The critical role of extreme heat for maize production in the United States. Nat. Clim. Change 3497–501
  71. Lobell DB, Roberts MJ, Schlenker W, Braun N, Little BB. et al. 2014. Greater sensitivity to drought accompanies maize yield increase in the US midwest. Science 344516–19
  72. Lobell DB, Schlenker W, Costa-Roberts J. 2011. Climate trends and global crop production since 1980. Science 333616–20
  73. Maccini S, Yang D. 2009. Under the weather: health, schooling, and economic consequences of early-life rainfall. Am. Econ. Rev. 991006
  74. Mackworth NH. 1946. Effects of heat on wireless telegraphy operators hearing and recording morse messages. Br. J. Ind. Med. 3143–58
  75. Mas-Colell A, Whinston MD, Green JR. 1995. Microeconomic Theory New York: Oxford Univ. Press, 1st ed..
  76. McCord G. 2016. Malaria ecology and climate change.. Eur. Phys. J. Spec. Top. 225:459–70 [Google Scholar]
  77. Mendelsohn R, Emanuel K, Chonabayashi S, Bakkensen L. 2012. The impact of climate change on global tropical cyclone damage. Nat. Clim. Change 2205–9
  78. Mendelsohn R, Nordhaus WD, Shaw D. 1994. The impact of global warming on agriculture: a Ricardian analysis. Am. Econ. Rev. 84753–71
  79. Miller NL, Hayhoe K, Jin J, Auffhammer M. 2008. Climate, extreme heat, and electricity demand in California. J. Appl. Meteorol. Climatol. 471834–44
  80. Moore FC, Diaz DB. 2015. Temperature impacts on economic growth warrant stringent mitigation policy. Nat. Clim. Change 5127–31
  81. Moore FC, Lobell DB. 2014. Adaptation potential of European agriculture in response to climate change. Nat. Clim. Change 4610–14
  82. Moulton BR. 1986. Random group effects and the precision of regression estimates. J. Econom. 32385–97
  83. Newey WK, West KD. 1987. A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix. Econometrica 55703–8
  84. Nordhaus WD. 1993. Optimal greenhouse-gas reductions and tax policy in the “DICE” model. Am. Econ. Rev. 83:313–17 [Google Scholar]
  85. Nordhaus WD. 2006. Geography and macroeconomics: new data and new findings. PNAS 103:3510–17 [Google Scholar]
  86. Nordhaus WD. 2010. The economics of hurricanes and implications of global warming. Clim. Change Econ. 11–20
  87. Nybo L, Secher NH. 2004. Cerebral perturbations provoked by prolonged exercise. Prog. Neurobiol. 72223–61
  88. Pachauri RK, Allen M, Barros V, Broome J, Cramer W. et al. 2014. Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Bremerhaven, Ger.: Alfred-Wegener-Inst.
  89. Ranson M. 2014. Crime, weather, and climate change. J. Environ. Econ. Manag. 67274–302
  90. Roberts MJ, Schlenker W. 2011. The evolution of heat tolerance of corn: implications for climate change. The Economics of Climate Change: Adaptations Past and Present GD Libecap, RH Steckel 225–51 Chicago: Univ. Chicago Press [Google Scholar]
  91. Roberts MJ, Schlenker W. 2013. Identifying supply and demand elasticities of agricultural commodities: implications for the US ethanol mandate. Am. Econ. Rev. 103:2265–95 [Google Scholar]
  92. Sarsons H. 2015. Rainfall and conflict: a cautionary tale. J. Dev. Econ. 115:62–72 [Google Scholar]
  93. Schlenker W. 2010. Crop responses to climate and weather: cross-section and panel models. Climate Change and Food Security: Adapting Agriculture to a Warmer World D Lobell, M Burke 99–108 New York: Springer [Google Scholar]
  94. Schlenker W, Hanemann WM, Fisher AC. 2006. The impact of global warming on US agriculture: an econometric analysis of optimal growing conditions. Rev. Econ. Stat. 88113–25
  95. Schlenker W, Roberts M. 2009. Nonlinear temperature effects indicate severe damages to U.S. crop yields under climate change. PNAS 106:15594–98 [Google Scholar]
  96. Schlenker W, Roberts MJ, Lobell DB. 2013. US maize adaptability. Nat. Clim. Change 3690–91
  97. Seppanen O, Fisk WJ, Lei Q. 2006. Room temperature and productivity in office work Tech. Rep., Lawrence Berkeley Natl. Lab., Berkeley, CA
  98. Stern N. 2006. Stern Review: The Economics of Climate Change Cambridge, UK: Cambridge Univ. Press
  99. Tol RSJ. 2002. Estimates of the damage costs of climate change. Part 1: Benchmark estimates. Environ. Resour. Econ. 21:47–73 [Google Scholar]
  100. Tol RSJ. 2009. The economic effects of climate change. J. Econ. Perspect. 23:29–51 [Google Scholar]
  101. Tol RSJ, Wagner S. 2010. Climate change and violent conflict in Europe over the last millennium. Clim. Change 9965–79
  102. Urban DW, Sheffield J, Lobell DB. 2015. The impacts of future climate and carbon dioxide changes on the average and variability of US maize yields under two emission scenarios. Environ. Res. Lett. 10045003
  103. Welch JR, Vincent JR, Auffhammer M, Moya PF, Dobermann A, Dawe D. 2010. Rice yields in tropical/subtropical Asia exhibit large but opposing sensitivities to minimum and maximum temperatures. PNAS 107:14562–67 [Google Scholar]
  104. Wooldridge J. 2002. Econometric Analysis of Cross Section and Panel Data Cambridge, MA: MIT Press
  105. Yang D. 2008. Coping with disaster: the impact of hurricanes on international financial flows, 1970–2002. Adv. Econ. Anal. Policy 81903
  106. Zhang DD, Brecke P, Lee HF, He YQ, Zhang J. 2007. Global climate change, war and population decline in recent human history. PNAS 104:19214–19 [Google Scholar]
/content/journals/10.1146/annurev-resource-100815-095343
Loading
/content/journals/10.1146/annurev-resource-100815-095343
Loading

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error