Effects of Temperature Shocks on Economic Growth and Welfare in Asia
Lee, Minsoo; Villaruel, Mai Lin; Gaspar, Raymond | December 2016
Abstract
Using the Burke, Hsiang, and Miguel (2015) framework, we examine the nonlinear response effect of economic growth to historic temperature and precipitation fluctuations. We confirm that aside from the significant effect of rising temperature on agricultural production, industrial production and investment endeavors also serve as other potential channels through which temperature significantly affects overall economic productivity. We find the overall economic productivity of developing Asia to be at least 10% lower by 2100 relative to business as usual. We also empirically analyze policy measures and factors that could help countries mitigate consumption volatility driven by climate change-related events. Consistent with several micro level findings, financial inclusiveness helps households mitigate consumption volatility amid temperature change. Likewise, government plays a critical role in moderating the negative impact of rising temperature in both output and consumption.
Citation
Lee, Minsoo; Villaruel, Mai Lin; Gaspar, Raymond. 2016. Effects of Temperature Shocks on Economic Growth and Welfare in Asia. © Asian Development Bank. http://hdl.handle.net/11540/8831. License: CC BY 3.0 IGO.ISSN
2313-6537 (Print)
2313-6545 (e-ISSN)
Keywords
Climate
Climate change
Climate impacts assessment
Global climate change
Rural Development
Rural Development Projects
Rural Development Research
Aid And Development
Asian Development Bank
Comprehensive Development Framework
Development Cooperation
Development Management
Development Planning
Development Strategies
Climatic change
Climatic influence
Climatology
Investment bank
Investment policy
Rural areas
Rural economy
Rural planning
Rural poverty
Development potential
Rural planning
Aid coordination
Industrial projects
Infrastructure projects
Natural resources policy
Educational development
City planning
Urban climatology
Bank investment
Capital investment
Investment banking
Venture capital
Communication in rural development
Communication in community development
Economic development projects
Development banks
Economic forecasting
Environmental auditing
Cumulative effects assessment
Human rights and globalization
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