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Economic impacts of climate change

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  • Richard S. J. Tol

    () (Department of Economics, University of Sussex, UK
    Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands
    Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands
    Tinbergen Institute, Amsterdam, The Netherlands)

Abstract

Climate change will probably have a limited impact on the economy and human welfare in the 21st century. The initial impacts of climate change may well be positive. In the long run, the negative impacts dominate the positive ones. Negative impacts will be substantially greater in poorer, hotter, and lower-lying countries. Poverty reduction complements greenhouse gas emissions reduction as a means to reduce climate change impacts. Climate change may affect the growth rate of the economy and may trap more people in poverty but quantification is difficult. The optimal carbon tax in the near term is somewhere between a few tens and a few hundreds of dollars per tonne of carbon.

Suggested Citation

  • Richard S. J. Tol, 2015. "Economic impacts of climate change," Working Paper Series 7515, Department of Economics, University of Sussex.
  • Handle: RePEc:sus:susewp:7515
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    1. A second correction in the Journal of Economic Perspectives
      by John Whitehead in Environmental Economics on 2015-07-22 21:27:55
    2. The implications of the US withdrawal from Paris Agreement for climate policy
      by ? in Climate Economics on 2017-07-31 13:10:00

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    Cited by:

    1. Richard S.J. Tol, 2016. "Distributional Implications of Geoengineering," Working Paper Series 8316, Department of Economics, University of Sussex.
    2. Marco Letta & Pierluigi Montalbano & Richard S.J. Tol, 2017. "Temperature shocks, growth and poverty thresholds: evidence from rural Tanzania," Working Papers 13/17, Sapienza University of Rome, DISS.
    3. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2018. "Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model," Ecological Economics, Elsevier, vol. 150(C), pages 315-339.
    4. Richard S.J. Tol, 2016. "Distributional Implications of Geoengineering," Working Paper Series 08316, Department of Economics, University of Sussex.
    5. Richard S.J. Tol, 2017. "The Private Benefit of Carbon and its Social Cost," Working Paper Series 0717, Department of Economics, University of Sussex.
    6. Tol, Richard S.J., 2017. "The structure of the climate debate," Energy Policy, Elsevier, vol. 104(C), pages 431-438.
    7. -, 2011. "An assessment of the economic impact Of climate change on the health sector in Saint Lucia," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38597, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Richard S.J. Tol, 2016. "Dangerous Interference With The Climate System: An Economic Assessment," Working Paper Series 10016, Department of Economics, University of Sussex.

    More about this item

    Keywords

    Impacts of climate change; economic development; social cost of carbon;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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