Monday, March 23, 2009
In Climate Shocks and Economic Growth: Evidence from the Last Half Century (www.aeaweb.org/annual_mtg_papers/2009/retrieve.php?pdfid=218), Melissa Dell, Benjamin F. Jones, and Benjamin A. Olken report: “Our main results show large, negative effects of higher temperatures on growth, but only in poor countries. In poorer countries, we estimate that a 1◦C rise in temperature in a given year reduced economic growth in that year by about 1.1 percentage points. In rich countries, changes in temperature had no discernable effect on growth. Changes in precipitation had no substantial effects on growth in either poor or rich countries. We find broadly consistent results across a wide range of alternative specifications.” Suppose that is right and right for more than 1 degree. Then does the West have anything to gain by changing its behavior? Societies that can adapt to the effects of climate change will be favored, and those are largely in the Developed World, which has the advantages, resources and the geographical location. But to reap such benefits such an argument has to be taken to the extreme. Only if the climate crisis eliminated the populations of the Developing World would the Developing World reap those advantages by living in a world with a radically diminished population. I would like to provide an economic argument based on the interdependence of the world economy to undermine this argument. But I am not confident that such an argument can be made. A moral argument can be made, but I am not confident that such an argument has much practical force. Instead I argue that it is implausible to think the Developed World could isolate itself from the turmoil that catastrophic climate change would produce in the Developing World. Short term security considerations will trump any long term analysis.