The Effects of Climate Change on GDP by Country and the Global Economic Gains From Complying With the Paris Climate Accord

By Tom Kompas, Van Ha Pham, Tuong Nhu Che. Earth's Future, 2018

228 citations recorded by the source corpus.

Computable general equilibrium (CGE) models are a standard tool for policy analysis and forecasts of economic growth. Unfortunately, due to computational constraints, many CGE models are dimensionally small, aggregating countries into an often limited set of regions or using assumptions such as static price‐level expectations, where next period's price is conditional only on current or past prices. This is a concern for climate change modeling, since the effects of global warming by country, in a fully disaggregated and global trade model, are needed, and the known future effects of global warming should be included in forward‐looking forecasts for prices and profitability. This work extends a large dimensional intertemporal CGE trade model to account for the various effects of global warming (e.g., loss in agricultural productivity, sea level rise, and health effects) on Gross Domestic Product (GDP) growth and levels for 139 countries, by decade and over the long term, where producers look forward and adjust price expectations and capital stocks to account for future climate effects. The potential economic gains from complying with the Paris Accord are also estimated, showing that even with a limited set of possible damages from global warming, these gains are substantial. For example, with the comparative case of Representative Concentration Pathway 8.5 (4°C), the global gains from complying with the 2°C target (Representative Concentration Pathway 4.5) are approximately US$17,489 billion per year in the long run (year 2100). The relative damages from not complying to Sub‐Sahara Africa, India, and Southeast Asia, across all temperature ranges, are especially severe.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/5c88f91fc07769cf4705ad17b2d3c1a9e709e9de

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Renewable Energy, Sustainability and the Environment

Citations in the corpus

A Meta-Analysis of the Total Economic Impact of Climate Change (2022, methodology): “The estimates by Sartori and Roson (2016) and Kompas et al. (2018) are scaled using the function shown in Figure 1.”
Sustainable finance in Japan (2020, background): “Under economic considerations, some regions are even predicted to relatively benefit in the short- to mid-term from global temperature increases or sea level rises, for example Canada, the EU, and New Zealand (Kompas, Pham, and Che 2018).”
Global economic and environmental outcomes of the Paris Agreement (2020, unknown): “Stegman and McKibbin (2013) compare long-term projections across global models and show that even using similar methodology, projections can vary considerably, particularly for developing regions over longtime horizons. This highlights the importance of alternative model structures and assumptions i”