Estimating Macro-Fiscal Effects of Climate Shocks From Billions of Geospatial Weather Observations

Abstract

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Sectoral Impact and Propagation of Weather Shocks

“…Not for Redistribution 2012). For each category, I consider the share of affected grid-cells in the month where the share is at its maximum for each year (Akyapi et al, 2022).…”

“…Since GVA growth rate is stationary and temperature fluctuations in levels are nonstationary, studying the relationship between GVA growth and weather variables would reintroduce trends in the specification (for a deeper discussion, see Newell et al (2021) and Tol (2019)). For this reason, I consider first-differenced, stationary weather variables, whereby I first compute any non-linear function and then take the first difference, following a more recent approach (Akyapi et al, 2022;Kahn et al, 2021;Kotz et al, 2021;Letta & Tol, 2019;Newell et al, 2021) rather than using levels in weather variables (Acevedo 13 ©International Monetary Fund. Not for Redistribution Burke et al, 2015;Dell et al, 2012;Henseler & Schumacher, 2019).…”

“…First, this paper contributes to the climate economics literature by providing sector-specific evidence on climate impacts across the world. Several cross-country studies have employed aggregate measures of economic activity such as national or regional GDP per capita (Acevedo et al, 2020;Akyapi et al, 2022;Burke et al, 2015;Burke & Tanutama, 2019;Dell et al, 2012;Kahn et al, 2021;Kalkuhl & Wenz, 2020;Kotz et al, 2021) to measure the impact of temperature fluctuations on economic production (see Newell et al (2021) for a review).…”

Assessing Recent Climate Policy Initiatives in the Netherlands

“…This leads to annual total losses of GDP ranging between €0.5-1.5 billion in 2030 and €2.2-6.2 billion in 2050. 44 These estimates rely on machine learning methods to select only the most important climate variables among hundreds potential candidates (Berkay, Bellon and Massetti, 2022). The analysis is limited to weather shocks that occur within the country and do not include, for example, the impact from changes in river flows due to extreme precipitations in other countries.…”