Economic impact of energy consumption change caused by global warming

Peter A. Lang and Kenneth B. Gregory

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper tests the hypothesis that global warming would be detrimental to the global economy this century. It compares empirical data of energy expenditure and average temperatures of the US states and census divisions against projections using the FUND [1] energy impact functions holding time-dependent parameters, except temperature, constant at 2010 values. It finds that energy expenditure reduces as temperatures increase. This suggests that global warming, by itself, would reduce, not increase, US energy expenditure and so would have a positive, not a negative, impact on US economic growth. Next, these findings are compared against FUND energy expenditure projections for the world for the 21st century. The findings suggest that warming, by itself, would also reduce global energy expenditure. If these findings are correct, and if FUND projections of the non-energy impact sectors are valid, warming would benefit the global economy up to around 4° C increase in average global temperature from 1900. If this is true, the hypothesis is false. In this case, greenhouse gas mitigation policies are detrimental to the global economy. The analysis and conclusions warrant further investigation. We recommend the FUND energy impact functions be modified and recalibrated against empirical data.

Keywords: Economic impacts; global warming; climate change; energy consumption; empirical evidence; impact function; damage function. (search for similar items in EconPapers)
Pages: 40 pages
Date: 2018-10
New Economics Papers: this item is included in nep-ene and nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cama.crawford.anu.edu.au/sites/default/fil ... 018_lang_gregory.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:een:camaaa:2018-55

Access Statistics for this paper

More papers in CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University Contact information at EDIRC.
Bibliographic data for series maintained by Cama Admin ().