Estimating the Consequences of Climate Change from Variation in Weather

Derek Lemoine

No 16194, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: I formally relate the consequences of climate change to the panel variation in weather extensively explored by recent empirical literature. I show that short-run responses to weather shocks differ from long-run responses to climate change when payoffs depend on a capital or resource stock. I develop a new indirect least squares estimator that bounds long-run climate impacts from short-run responses to weather. Applying this new method, I find that an additional 2 degrees Celsius of global warming would eliminate profits from the average acre of current farmland in the eastern U.S.

Keywords: climate; weather; Adaptation; forecasts; agriculture; indirect least squares (search for similar items in EconPapers)
JEL-codes: C23 Q12 Q51 Q54 (search for similar items in EconPapers)
Date: 2021-05
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Working Paper: Estimating the Consequences of Climate Change from Variation in Weather (2018)
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