Online seminar | The economic impact of climate and weather
21.01.2021
21.01.2021
16:00 - 18:00
online
GoToWebinar
January 21, 2021 - 4.00 PM CET (UTC + 1)
Prof. Richard S.J. Tol
University of Sussex and Vrije Universiteit Amsterdam
introduced by
Prof. Sergio Vergalli
Fondazione Eni Enrico Mattei, University of Brescia, IAERE
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In the study “The economic impact of climate and weather”, Prof. R. Tol proposes a new conceptual framework to disentangle the impacts of weather and climate on economic activity and growth: a stochastic frontier model with climate in the production frontier and weather shocks as a source of technical inefficiency. The author tests it on a sample of 160 countries over the period 1950-2014. Results reconcile inconsistencies in previous studies: climate determines production possibilities in both rich and poor countries, whereas weather anomalies enhance inefficiency only in poor countries. In a long-run perspective, the climate effect dominates over the weather effect: simulations suggest that, in the worst-case scenario with unmitigated warming, climate change will curb global output by 13% by 2100, and that a large share of these damages would be avoided if warming were limited to 2◦C.