Suchergebnisse

Smoke on the horizon -- Drawing up the battle lines -- Deep inside the battle to save the Earth -- Accelerating change alarms a fragile planet -- The battle heats up and so does the world -- Awareness dawns on the globe -- The media wars : the stories behind persistent distortion -- Habitats for humanity and others -- What keeps us awake at night

We shed new light on the macroeconomic effects of rising temperatures. In the data, a shock to global temperature dampens expenditures in research and development (R&D). We rationalize this empirical evidence within a stochastic endogenous growth model, featuring temperature risk and growth sustained through innovations. In line with the novel evidence in the data, temperature shocks undermine economic growth via a drop in R&D. Moreover, in our endogenous growth setting temperature risk generates non-negligible welfare costs (i.e., 11% of lifetime utility). An active government, which is committed to a zero fiscal deficit policy, can offset the welfare costs of global temperature risk by subsidizing the aggregate capital investment with one-fifth of total public spending.

Current human-induced climate change arises primarily from the heating of the planet mainly from changes in atmospheric composition, and temperature change is one manifestation. The increasing greenhouse gases, notably carbon dioxide from burning fossil fuels, lead to Earth's Energy Imbalance (EEI), altering the flow of energy through the climate system, and the dissemination of excess energy is partly what determines how climate change is manifested. Some of the extremes being experienced, especially those involving drought, convection, storms, flooding, and the water cycle, are mostly driven by aspects of heating and, while temperature contributes through the water-holding capacity of the atmosphere, it is more a consequence than a cause. Afterall, water is the air conditioner of the planet. The United Nations, and especially the Intergovernmental Panel on Climate Change (IPCC) in their Summary for Policy Makers, focus on global temperature targets rather than broader facets of climate change including EEI, and do not always adequately discriminate between temperature and heating. This also has consequences for future climate if or when heating is brought under control by cutting emissions. Improvements are needed in expressing how the climate is changing by properly accounting for the flow of energy through the climate system.