IDEAS home Printed from https://ideas.repec.org/a/sae/emeeco/v16y2024i3p295-320.html

Temperature Rising, Growth Descending: Climate Change Impacts on Asian Economies

Author

Listed:
  • Nikhil Kaushik
  • Ashish Sharma
  • Poornima Mishra
  • Sunil Kumar

Abstract

This study investigates the impact of temperature and rainfall on economic growth in Asian countries using panel data regression analysis from 1991 to 2021. The results reveal a significant negative relationship between temperature and economic growth, with a 1°C rise leading to a 0.385% reduction in growth. High-temperature countries experience a more significant adverse effect compared to low-temperature countries. However, despite displaying a negative trend, rainfall does not significantly influence economic growth statistically. The study also finds differences in the impact of climate variables across different income groups. Additionally, temperature negatively affects the growth rate of agrarian countries, while rainfall does not significantly influence their growth dynamics. These findings underscore the importance of considering climate change in understanding economic growth and highlight the need for policymakers to prioritize climate risk assessment and adopt appropriate climate change mitigation and resilience strategies in Asian countries. JEL Classification E23, O13, Q54

Suggested Citation

  • Nikhil Kaushik & Ashish Sharma & Poornima Mishra & Sunil Kumar, 2024. "Temperature Rising, Growth Descending: Climate Change Impacts on Asian Economies," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(3), pages 295-320, September.
    • Handle: RePEc:sae:emeeco:v:16:y:2024:i:3:p:295-320
    DOI: 10.1177/09749101241242214
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/09749101241242214
    Download Restriction: no
    File URL: https://libkey.io/10.1177/09749101241242214?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    2. Haron Agegnehu Endalew & Subir Sen, 2021. "Effects of climate shocks on Ethiopian rural households: an integrated livelihood vulnerability approach," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 64(3), pages 399-431, February.
    3. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    4. Ashish Sharma & Subir Sen, 2021. "Impact of drought on economy: a district level analysis of Madhya Pradesh, India," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 64(6), pages 1021-1043, May.
    5. Chen, Xiaoguang & Yang, Lu, 2019. "Temperature and industrial output: Firm-level evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 257-274.
    6. E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2021. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1797-1827.
    7. Fankhauser, Samuel & S.J. Tol, Richard, 2005. "On climate change and economic growth," Resource and Energy Economics, Elsevier, vol. 27(1), pages 1-17, January.
    8. Damania, R. & Desbureaux, S. & Zaveri, E., 2020. "Does rainfall matter for economic growth? Evidence from global sub-national data (1990–2014)," Journal of Environmental Economics and Management, Elsevier, vol. 102(C).
    9. Gregory Casey & Stephie Fried & Ethan Goode, 2023. "How Long Do Rising Temperatures Affect Economic Growth?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2023(15), pages 1-6, June.
    10. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Global non-linear effect of temperature on economic production," Nature, Nature, vol. 527(7577), pages 235-239, November.
    11. Patrycja Klusak & Matthew Agarwala & Matt Burke & Moritz Kraemer & Kamiar Mohaddes, 2023. "Rising Temperatures, Falling Ratings: The Effect of Climate Change on Sovereign Creditworthiness," Management Science, INFORMS, vol. 69(12), pages 7468-7491, December.
    12. Maximilian Kotz & Leonie Wenz & Annika Stechemesser & Matthias Kalkuhl & Anders Levermann, 2021. "Day-to-day temperature variability reduces economic growth," Nature Climate Change, Nature, vol. 11(4), pages 319-325, April.
    13. Zhang, Peng & Deschenes, Olivier & Meng, Kyle & Zhang, Junjie, 2018. "Temperature effects on productivity and factor reallocation: Evidence from a half million chinese manufacturing plants," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 1-17.
    14. Frances C. Moore & Delavane B. Diaz, 2015. "Erratum: Temperature impacts on economic growth warrant stringent mitigation policy," Nature Climate Change, Nature, vol. 5(3), pages 280-280, March.
    15. Steven Passel & Emanuele Massetti & Robert Mendelsohn, 2017. "A Ricardian Analysis of the Impact of Climate Change on European Agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(4), pages 725-760, August.
    16. Olper, Alessandro & Maugeri, Maurizio & Manara, Veronica & Raimondi, Valentina, 2021. "Weather, climate and economic outcomes: Evidence from Italy," Ecological Economics, Elsevier, vol. 189(C).
    17. Mendelsohn, Robert & Dinar, Ariel & Sanghi, Apurva, 2001. "The effect of development on the climate sensitivity of agriculture," Environment and Development Economics, Cambridge University Press, vol. 6(1), pages 85-101, February.
    18. Fishman, Ram & Carrillo, Paul & Russ, Jason, 2019. "Long-term impacts of exposure to high temperatures on human capital and economic productivity," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 221-238.
    19. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009. "Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates," American Economic Review, American Economic Association, vol. 99(2), pages 198-204, May.
    20. Rising, James A. & Taylor, Charlotte & Ives, Matthew C. & Ward, Robert E.T., 2022. "Challenges and innovations in the economic evaluation of the risks of climate change," Ecological Economics, Elsevier, vol. 197(C).
    21. Richard S. J. Tol, 2014. "Correction and Update: The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 221-226, Spring.
    22. Maximilian Auffhammer, 2018. "Quantifying Economic Damages from Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 32(4), pages 33-52, Fall.
    23. Krzysztof Karbownik & Anthony Wray, 2019. "Long-Run Consequences of Exposure to Natural Disasters," Journal of Labor Economics, University of Chicago Press, vol. 37(3), pages 949-1007.
    24. Babatunde O. Abidoye & Ayodele F. Odusola, 2015. "Climate Change and Economic Growth in Africa: An Econometric Analysis," Journal of African Economies, Centre for the Study of African Economies, vol. 24(2), pages 277-301.
    25. Matteo Lanzafame, 2014. "Temperature, rainfall and economic growth in Africa," Empirical Economics, Springer, vol. 46(1), pages 1-18, February.
    26. Chang, Jun-Jie & Mi, Zhifu & Wei, Yi-Ming, 2023. "Temperature and GDP: A review of climate econometrics analysis," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 383-392.
    27. Acevedo, Sebastian & Mrkaic, Mico & Novta, Natalija & Pugacheva, Evgenia & Topalova, Petia, 2020. "The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    28. Burke, Marshall & Hsiang, Solomon M & Miguel, Edward, 2015. "Global non-linear effect of temperature on economic production," Department of Economics, Working Paper Series qt3g72r0zv, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    29. Abidoye, Babatunde & Odusola, Ayodele, 2015. "Climate Change and Economic Growth in Africa: An Econometric Analysis," UNDP Africa Economists Working Papers 307336, United Nations Development Programme (UNDP).
    30. Frances C. Moore & Delavane B. Diaz, 2015. "Temperature impacts on economic growth warrant stringent mitigation policy," Nature Climate Change, Nature, vol. 5(2), pages 127-131, February.
    31. Vikrant Panwar & Subir Sen, 2019. "Economic Impact of Natural Disasters: An Empirical Re-examination," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 13(1), pages 109-139, February.
    32. Salvador Barrios & Luisito Bertinelli & Eric Strobl, 2010. "Trends in Rainfall and Economic Growth in Africa: A Neglected Cause of the African Growth Tragedy," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 350-366, May.
    33. Newell, Richard G. & Prest, Brian C. & Sexton, Steven E., 2021. "The GDP-Temperature relationship: Implications for climate change damages," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    34. Siriklao Sangkhaphan & Yang Shu, 2019. "The Effect of Rainfall on Economic Growth in Thailand: A Blessing for Poor Provinces," Economies, MDPI, vol. 8(1), pages 1-17, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chang, Jun-Jie & Mi, Zhifu & Wei, Yi-Ming, 2023. "Temperature and GDP: A review of climate econometrics analysis," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 383-392.
    2. Tarsia, Romano, 2024. "Heterogeneous effects of weather shocks on firm economic performance," LSE Research Online Documents on Economics 124251, London School of Economics and Political Science, LSE Library.
    3. Desbordes, Rodolphe & Eberhardt, Markus, 2024. "Climate change and economic prosperity: Evidence from a flexible damage function," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    4. Kumar, Naveen & Maiti, Dibyendu, 2025. "Climate change, state capacity and uneven growth: A disaggregated analysis of India," Economic Modelling, Elsevier, vol. 153(C).
    5. Lotfali Azari & Aliakbar Naji Meidani & Narges Salehnia, 2024. "Predicting the Impact of Climate Conditions on the Economic Production of Iranian Provinces with The Approach of Random Forest Algorithm," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 11(2), pages 1-34.
    6. Naveen Kumar & Dibyendu Maiti, 2024. "The Dynamic Causal Impact of Climate Change on Economic Activity - A Disaggregated Panel Analysis of India," Working papers 345, Centre for Development Economics, Delhi School of Economics.
    7. Tol, Richard S.J., 2024. "A meta-analysis of the total economic impact of climate change," Energy Policy, Elsevier, vol. 185(C).
    8. Li Chen & Bin Jiang & Chuan Wang, 2023. "Climate change and urban total factor productivity: evidence from capital cities and municipalities in China," Empirical Economics, Springer, vol. 65(1), pages 401-441, July.
    9. Hu, Yiming & Liao, Hua, 2025. "High temperatures and national saving: Experience in the latest six decades," Energy Economics, Elsevier, vol. 145(C).
    10. Wu, Zhiyang & Zhou, Tao & Zhang, Ning & Choi, Yongrok & Kong, Fanbin, 2023. "A hidden risk in climate change: The effect of daily rainfall shocks on industrial activities," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 161-180.
    11. Lianxiao Yao & Minghui Jin, 2025. "The uneven impact of temperature on the macroeconomy: a perspective on total factor productivity," Economic Change and Restructuring, Springer, vol. 58(4), pages 1-35, August.
    12. Hai‐Anh H. Dang & Stephane Hallegatte & Trong‐Anh Trinh, 2024. "Does global warming worsen poverty and inequality? An updated review," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1873-1905, December.
    13. Giraldo, Carlos & Giraldo, Iader & Gomez-Gonzalez, Jose E. & Uribe, Jorge M., 2025. "Climate growth at risk in the global south," Energy Economics, Elsevier, vol. 149(C).
    14. Majid Khan & Abdul Rashid, 2022. "(A)symmetry effects of climate changes on economic growth: a panel data analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 571-607, December.
    15. Harding, Anthony & Moreno-Cruz, Juan & Quaas, Martin & Rickels, Wilfried & Smulders, Sjak, 2025. "Distribution of climate damages in convergence-consistent growth projections," Energy Economics, Elsevier, vol. 149(C).
    16. Jefferson Muñoz & Alex Perez & Jaime Carabali, 2025. "Choques climáticos, productividad y desempeño de las firmas de la industria manufacturera en Colombia," Borradores de Economia 1298, Banco de la Republica de Colombia.
    17. Valenti, Giulia & Vona, Francesco, 2024. "Hot Wages: How Do Heat Waves Change the Earnings Distribution?," FEEM Working Papers 348848, Fondazione Eni Enrico Mattei (FEEM).
    18. Gregory Casey & Stephie Fried & Ethan Goode, 2023. "Projecting the Impact of Rising Temperatures: The Role of Macroeconomic Dynamics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 688-718, September.
    19. Nora Pankratz & Rob Bauer & Jeroen Derwall, 2023. "Climate Change, Firm Performance, and Investor Surprises," Management Science, INFORMS, vol. 69(12), pages 7352-7398, December.
    20. Peter H. Howard & Thomas Sterner, 2025. "Methodology Matters: A Careful Meta-Analysis of Climate Damages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(12), pages 3289-3327, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:emeeco:v:16:y:2024:i:3:p:295-320. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.emergingmarketsforum.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.