As a society, many of us agree that climate change is a serious threat. However, according to the article “Temperature Shocks and Economic Growth: Evidence from the Last Half Century” by Harvard scholars Melissa Dell, Benjamin F. Jones, and Benjamin A. Olken, it is worth considering that climate change might lead to growth. I read this article while working with Professor Sebastien Mary at Governors State University on researching the effect of climate change on economic growth in Africa. To quantify the relationship between temperature and economic activity, this article collected temperature and precipitation data from each country from 1950-2003 and combined it with data on aggregate output. This allowed for an observation of the historical relationship between changes in a country’s temperature and precipitation to the changes in economic performance. This approach measures the magnitude of any effects; the lag structure informs whether temperature impacts national growth rates or simply income.
This article found climate change to have an overwhelmingly negative impact. Poor countries were specifically vulnerable with a “1°C temperature rise” reducing “economic growth by approximately 1.3 percentage points.” There were also negative effects to be found in other areas such as health, industry, road infrastructure, political stability, and tourism. One could attribute these drawbacks to the effects of climate change. Climate change would increase government expenditure– through disaster relief and other adaptation measures- and increase fiscal strain on governments. However, it was found that the negative effects were only found statistically significant in poor countries, not wealthy ones. This challenges the notion that climate change impacts everything negatively.
There may be confounding variables to this experiment, one of which being the ability of a country to adapt to climate change (wealth being a main contributor). This study looks at the aggregate change instead of effects on individual sectors. So, it could be that while the overall impact is negative, individual sectors actually prosper from climate change. For example, the agriculture sector would likely be harmed by climate change. So, more of those workers may migrate to the city and therefore contribute to the industrial sector. In addition, to make farming more efficient more machinery would be needed, which would put more demand on the production sector. Therefore, climate change could negatively impact some sectors while simultaneously boosting others.
This highlights that while the aggregate impact of climate change may be negative, especially for poorer nations, there can still be complex sectoral shifts and potential for growth in specific areas. What becomes clear from Dell, Jones, and Olken’s research is that climate change interacts with existing institutional, geographic, and economic conditions. Another thing to note is that wealthier nations often have the capacity to buffer the consequences, while low-income countries are disproportionately exposed and less equipped to adapt. This leaves me with the question of if wealthy countries are able to shield themselves from climate-related economic loss, to what extent should global climate policy prioritize funding adaptation in lower-income countries rather than only focusing on emissions reduction? Therefore, addressing climate change is not just about reducing emissions; it’s also about increasing resilience, especially in vulnerable economies.
Impact Blueprint 