Navigating the ‘Problem from Hell’: A Guide to Climate Damages

Derek Lemoine, Catherine Hausman and Jeffrey Shrader

No 34348, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Multiple lines of research aim to quantify the economic impacts of climate change. We show that the effects of climate change on economic activity depend on how climate change alters weather across time and space. Changes in contemporary weather have direct effects on output; changes in past weather and in expectations of future weather induce adaptation; and changes in weather elsewhere around the globe introduce a general equilibrium effect. Using this framework, we argue that estimation of climate impacts faces a trilemma. A methodology can have at most two of: (i) robustness to a particular economic model’s structure, (ii) interpretation as effects of persistent, widespread, anticipated climate change, and (iii) quasi-experimental identification. We summarize the literature on climate damages in light of the trilemma. Asolid body of knowledge has developed around direct effects, and recent work has made substantial progress towards understanding adaptation and spatial spillovers.

JEL-codes: C23 C51 F18 O13 Q17 Q51 Q54 R11 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-agr and nep-env
Note: EEE EFG
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.nber.org/papers/w34348.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

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:nbr:nberwo:34348

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34348
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().