On the Spatial Economic Impact of Global Warming

Klaus Desmet and Esteban Rossi-Hansberg

No 9220, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We propose a dynamic spatial theory to analyze the geographic impact of climate change. Agricultural and manufacturing firms locate on a hemisphere. Trade across locations is costly, firms innovate, and technology diffuses over space. Energy used in production leads to emissions that contribute to the global stock of carbon in the atmosphere, which affects temperature. The rise in temperature differs across latitudes and sectors. We calibrate the model to analyze how climate change affects the spatial distribution of economic activity, trade, migration, growth, and welfare. We assess quantitatively the impact of migration and trade restrictions, energy taxes, and innovation subsidies.

Keywords: Carbon; Climate change; Growth; International and regional trade; Migration; Mobility frictions; Regional economics; Space (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-ene, nep-env, nep-geo, nep-res and nep-ure
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: On the spatial economic impact of global warming (2015)
Working Paper: On the Spatial Economic Impact of Global Warming (2013)
Working Paper: On the Spatial Economic Impact of Global Warming (2012)
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