Estimating the Consequences of Climate Change from Variation in Weather

Derek Lemoine

No 25008, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I formally define the limits of what we can learn about the consequences of long-run climate change from short-run weather shocks. I show that conventional approaches to estimating climate impacts require assuming that payoffs are independent of capital and resource stocks. I derive a new indirect least squares estimator that bounds long-run climate impacts from short-run responses to weather under less restrictive assumptions. In an application to the U.S. economy, I project that climate change will reduce steady-state income per capita by at least 1.8% in the Midwest, by at least 1% in the Northeast, and by at least 0.23% in the West. Each lower bound implies damages beyond the 95% confidence intervals produced by the conventional approach.

JEL-codes: D84 H43 Q54 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-agr and nep-env
Note: EEE
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Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Estimating the Consequences of Climate Change from Variation in Weather (2021)
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