The impact of climate change on economic growth has received considerable attention in recent years based on several macro-econometric studies estimating the impact of country-level temperatures on GDP growth rates. We build on this literature, but instead of per-capita GDP, we consider inequality and poverty at the country and sub-national panel level with a focus on South Africa. Our analysis on both scales suggest a significant ∪-shaped relationship between inequality/poverty indices and local mean temperature. Inequality, hence tends to be lowest at moderate temperatures (11°C-17°C). Based on the Sen/Foster welfare function, we show that global warming hence has two detrimental effects in hot countries; reducing average growth, which dominates, and increasing inequality. Based on the moderate RCP4.5 projection, our results suggest an increase of the Gini index by three to four points compared to scenario without warming. Combined with the impact on GDP growth, this means a possible welfare loss of about 25% compared to the reference case without climate change
Inequality and Growth Impacts from Climate Change—Insights from South Africa
An examination of climate impacts with respect to inequality and poverty, with a focus on South AfricaDownload
Working Paper — Aug 2, 2021
Wildfire, Smoke, and Outdoor Recreation in the Western United States
In the first causal analysis of the impact of wildfire smoke on outdoor recreation, a new working paper finds that campers on public lands experience at least 400,000 days of wildfire smoke each year—but while smoke may cause negative health impacts, relatively few people cancel their trips as a result of poor air quality.
On the Issues — Jul 30, 2021
Carbon Pricing Beyond Borders, Designing Federal Building Standards, and More
A weekly newsletter connecting global current events, pressing climate and energy policy news, and economics research from RFF scholars.
Explainer — Jul 30, 2021
Wildfires in the United States 101: Context and Consequences
An overview of the context and consequences of wildfires in the United States, from trends and causes to impacts on the economy, the environment, and human health.