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Climate Change And Economic Growth: Evidence From Local Income Proxies

Author

Listed:
  • DEVINA LAKHTAKIA

    (Department of Economics and Finance, University of Guelph, Canada)

  • ROSS MCKITRICK

    (Department of Economics and Finance, University of Guelph, Canada)

Abstract

A challenge for empirical research on the effects of climate change on economic growth is the spatial mismatch between local temperature data and national economic data. Here we develop two new global datasets that measure local economic activity over time using air traffic data and satellite-measured nightlights as proxies, allowing a match to local climate variables without requiring ad hoc spatial averaging. Our data panel allows us to address some methodological criticism of previous empirical work. We find some evidence of an inverted-U shaped relationship between temperature and income although it is not robust to inclusion of a full set of explanatory variables. We find that climate change does not have a permanent effect on income growth.

Suggested Citation

  • Devina Lakhtakia & Ross Mckitrick, 2025. "Climate Change And Economic Growth: Evidence From Local Income Proxies," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 1-41, November.
    • Handle: RePEc:wsi:ccexxx:v:16:y:2025:i:04:n:s2010007825500137
    DOI: 10.1142/S2010007825500137
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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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