Nature Loss and Climate Change: The Twin-Crises Multiplier

Stefano Giglio, Theresa Kuchler, Johannes Stroebel and Olivier Wang

AEA Papers and Proceedings, 2025, vol. 115, 409-14

Abstract: We study the economic effects of the interaction of nature loss and climate change in a model that incorporates important aspects of both processes. We capture the distinct ways in which they affect economic activity—with nature constituting a key factor of production and climate change destroying parts of output—but also the ways in which they interact: Climate change causes nature loss, and nature provides both a carbon sink and adaptation tools to reduce climate damages. Our analysis of these feedback loops reveals a novel amplification channel—the twin-crises multiplier—that systematically affects optimal climate and nature conservation policies.

JEL-codes: Q28 Q54 Q57 Q58 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Nature Loss and Climate Change: The Twin-Crises Multiplier (2025)
Working Paper: Nature Loss and Climate Change: The Twin-Crises Multiplier (2025)
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DOI: 10.1257/pandp.20251074

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