Climate Damages in Convergence-Consistent Growth Projections

Tony Harding, Juan Moreno-Cruz, Martin Quaas, Wilfried Rickels and Sjak Smulders

No 10490, CESifo Working Paper Series from CESifo

Abstract: Projections of climate change damages based on climate-econometric estimates suggest that, without mitigation, global warming could reduce average global incomes by over 20% towards the end of the century (Burke et al., 2015). This figure significantly surpasses climate damages in Integrated Assessment Models (IAMs). For example, global climate damages obtained with the seminal DICE model are just a 7% reduction in output (Nordhaus, 2018). Here, we show that the discrepancy between the projections can be resolved by accounting for growth convergence in a climate-econometric approach that is consistent with the macroeconomic models underlying most IAMs. By re-estimating the global non-linear relationship between temperature and country-level economic growth, our convergence-consistent projections reveal that under an unmitigated warming scenario, global climate damages amount to 6%.

Keywords: climate change; economics growth; convergence; integrated assessment models (search for similar items in EconPapers)
JEL-codes: O40 O44 Q54 Q55 Q56 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp10490.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10490

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().