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<!--StartFragment--><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class="">The Economist Jan 18th 2014 </span></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class="">Finance and economics</span></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class=""><b class="">
Economists are getting to grips with the impact of climate change</b></span></p><p class="MsoNormal" style="background:white"><a href="http://www.economist.com/news/finance-and-economics/21594252-economists-are-getting-grips-impact-climate-change-weather" class=""><span style="color: rgb(17, 85, 204);" class="">http://www.economist.com/news/finance-and-economics/21594252-economi</span><span style="color: blue;" class="">sts-are-getting-grips-impact-climate-change-weather</span></a></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class=""><b class="">Excerpts:[bold added]</b></span></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class="">The link between more heat and more poverty
is robust. Tropical countries are poorer. In a review of the literature,
Melissa Dell of Harvard University, Benjamin Jones of Northwestern University
and Benjamin Olken of the Massachusetts Institute of Technology find that, for
each 1°C rise in the average temperature of a country, its GDP per head is 8.5%
lower. Another study of poor countries alone showed that being 1°C warmer in
any given year reduces income per head by 1.4%. These findings would not have
surprised Montesquieu, who in 1748 argued that hot climates were inimical to
the material conditions of the good life.</span></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class="">However, a correlation also exists between heat and growth, suggesting a
longer-run effect. Despite some successes, tropical countries grew by 0.9
percentage points a year more slowly than the global average in 1965-90. In a
sample of 28 Caribbean countries national output fell by 2.5% for each 1°C of
warming. Again, this does not prove that high temperatures were to blame.
But the correlation is strong enough to make it worth investigating whether the
weather itself might be dragging down countries' growth rates directly. The new
literature suggests several ways in which it might do that.</span></p><p class="MsoNormal" style="background:white"><font color="#222222" class="">
First, natural disasters still wreak a lot of damage. …. So if global warming were associated with more extreme weather, it
would lower growth.</font></p><p class="MsoNormal" style="background:white"><font color="#222222" class="">
Next, higher temperatures and worse droughts tend to reduce farm yields. This
hurts poor and middle-income countries most because agriculture has a bigger
share in their GDP. … There seems to be a threshold of 29°-32°C
below which rising temperatures can be beneficial; above it they are sharply
harmful. With some crops, rising night-time temperatures do more damage than
rising noontime ones.</font></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class="">
It is often assumed that the economic effects of climate change will be
confined mainly to poor countries. That may be wrong. A study of time-use
surveys and temperatures in the United States found that when temperatures
reach 100°F (38°C), the labour supply in farming, forestry, construction and
utilities falls by an hour a day, compared with what happens at 76-80°F. These
are outdoor activities, which may explain why workers fail to show up. But a
study of call centres also showed that each 1°C rise between 22°C and 29°C cut
labour productivity by 1.8%. And in car factories in America, a week of outside
temperatures above 90°F reduced output by 8%. Perhaps the heat disrupts
the supply chain-or perhaps </span><span style="color: rgb(34, 34, 34);" class="">air</span><span style="color: rgb(34, 34, 34);" class=""> </span><span style="color: rgb(34, 34, 34);" class="">conditioners</span><span style="color: rgb(34, 34, 34);" class=""> fail to work properly.</span></p><p class="MsoNormal" style="background:white"><font color="#222222" class="">
Lastly, the weather influences basic conditions of life and hence factors of
production. ….</font><span style="color: rgb(34, 34, 34);" class=""> Heatwaves cause early deaths (especially of mothers and infants)
and, by affecting the harvest, damage nutrition. This in turn has long-lasting
effects on the economy.</span></p><p class="MsoNormal" style="background:white"><font color="#222222" class="">... </font><b style="color: rgb(34, 34, 34);" class="">the new literature is a start</b><font color="#222222" class="">. ….</font><b style="color: rgb(34, 34, 34);" class=""> And --who
knows-- it may one day show how public policy, now so ineffective, might stem
the emissions that are causing the mess in the first place.</b></p><p class="MsoNormal" style="background:white"><span style="color: rgb(34, 34, 34);" class="">
Sources<br class="">
"What do we learn from the weather?", by Melissa Dell, Benjamin Jones
and Benjamin Olken. Journal of Economic Literature, forthcoming.<br class="">
"<u class="">Informing climate adaptation</u>", by Carolyn Kousky. Energy
Economics <br class="">
"<u class="">Quantifying the influence of climate on human conflict</u>", by
Solomon Hsiang, Marshall Burke and Edward Miguel<br class="">
"<u class="">Envirodevonomics</u>" by Michael Greenstone and Kelsey
Jack. MIT Working Paper series </span> </p>
<!--EndFragment--><div class="">
<div style="color: rgb(0, 0, 0); letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px; word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="color: rgb(0, 0, 0); letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px; word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="color: rgb(0, 0, 0); font-family: Verdana; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;">======================================<br class="">"We live in a moment of history where change is so speeded up that </div><div style="color: rgb(0, 0, 0); font-family: Verdana; font-size: 14px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;">we begin to see the present only when it is already disappearing."</div><div style="color: rgb(0, 0, 0); font-family: Verdana; font-size: 14px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><br class="">"We are not able even to think adequately about the behavior that </div><div style="color: rgb(0, 0, 0); font-family: Verdana; font-size: 14px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;">is at the annihilating edge."<br class=""><br class="">R. D. Laing. Introduction, The Politics of Experience. <br class="">1967, New York. Pantheon Books, a division of Random House</div><div style="color: rgb(0, 0, 0); font-family: Verdana; font-size: 14px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;">—————————————————————————————————————--------------------------------<br class="">“Consumer expectations of ever-higher living standards were fuelled by more lenient and readily available bank lending, …. Social status </div><div style="color: rgb(0, 0, 0); font-family: Verdana; font-size: 14px; font-style: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px; -webkit-text-stroke-width: 0px;">and identity became closely associated with consumption, in particular with the concept of luxury. <br class=""><br class="">"Identifying oneself with the good life meant being able to live beyond traditional understandings of basic needs. Debt was the price <br class="">one paid for the joys of being part of a hedonistic consumer culture.”<br class=""><br class="">Kenneth Dyson. The Morality of Debt. Foreign Affairs. May 3, 2015<br class=""><a href="https://www.foreignaffairs.com/articles/2015-05-03/morality-debt" class="">https://www.foreignaffairs.com/articles/2015-05-03/morality-debt</a></div></div></div></div>
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