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Estimating the Consequences of Climate Change from Variation in Weather

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  • Lemoine, Derek

Abstract

I formally relate the consequences of climate change to the panel variation in weather extensively explored by recent empirical literature. I show that short-run responses to weather shocks differ from long-run responses to climate change when payoffs depend on a capital or resource stock. I develop a new indirect least squares estimator that bounds long-run climate impacts from short-run responses to weather. Applying this new method, I find that an additional 2 degrees Celsius of global warming would eliminate profits from the average acre of current farmland in the eastern U.S.

Suggested Citation

  • Lemoine, Derek, 2021. "Estimating the Consequences of Climate Change from Variation in Weather," CEPR Discussion Papers 16194, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16194
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    Cited by:

    1. Rudik, Ivan & Lyn, Gary & Tan, Weiliang & Ortiz-Bobea, Ariel, 2021. "Heterogeneity and Market Adaptation to Climate Change in Dynamic-Spatial Equilibrium," SocArXiv usghb, Center for Open Science.
    2. Tamma Carleton & Amir Jina & Michael Delgado & Michael Greenstone & Trevor Houser & Solomon Hsiang & Andrew Hultgren & Robert E Kopp & Kelly E McCusker & Ishan Nath & James Rising & Ashwin Rode & Hee , 2023. "Valuing the Global Mortality Consequences of Climate Change Accounting for Adaptation Costs and Benefits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(4), pages 2037-2105.
    3. Gammans, Matthew & Mérel, Pierre & Paroissien, Emmanuel, 2020. "Reckoning climate change damages along an envelope," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304475, Agricultural and Applied Economics Association.
    4. Cristina Cattaneo & Emanuele Massetti, 2019. "Does Harmful Climate Increase Or Decrease Migration? Evidence From Rural Households In Nigeria," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(04), pages 1-36, November.
    5. Garg, Teevrat & Gibson, Matthew & Sun, Fanglin, 2020. "Extreme temperatures and time use in China," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 309-324.
    6. Stephane Bonhomme & Angela Denis, 2023. "Estimating Individual Responses when Tomorrow Matters," Papers 2310.09105, arXiv.org, revised Dec 2023.
    7. Philippe Kabore & Nicholas Rivers, 2023. "Manufacturing output and extreme temperature: Evidence from Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 191-224, February.
    8. Guglielmo Zappalà, 2022. "Drought exposure and accuracy: Motivated reasoning in climate change beliefs," Working Papers 2022.02, FAERE - French Association of Environmental and Resource Economists.
    9. Tamma Carleton & Amir Jina & Michael Delgado & Michael Greenstone & Trevor Houser & Solomon Hsiang & Andrew Hultgren & Robert E Kopp & Kelly E McCusker & Ishan Nath & James Rising & Ashwin Rode & Hee , 2023. "Valuing the Global Mortality Consequences of Climate Change Accounting for Adaptation Costs and Benefits," Journal of Economic Geography, Oxford University Press, vol. 137(4), pages 2037-2105.
    10. Max Vilgalys, 2023. "A Machine Learning Approach to Measuring Climate Adaptation," Papers 2302.01236, arXiv.org.

    More about this item

    Keywords

    climate; weather; Adaptation; forecasts; agriculture; indirect least squares;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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