Economic costs of climate extremes
Authors: Wenz Leonie 
Published: March 2022

&lt;p&gt;&lt;span&gt;&lt;span&gt;Climate&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;extremes&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;have been shown to have&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;adverse effects&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;on various productive elements of the&lt;/span&gt;&lt;br&gt;&lt;span&gt;economy&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;such as labour productivity or agricultural yields&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;span&gt;, measurable at the macro-level as changes&lt;/span&gt;&lt;br&gt;&lt;span&gt;in Gross Domestic Product&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;(GDP)&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;span&gt;.&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;Estimates of these macroeconomic costs of climate change play an&lt;/span&gt;&lt;br&gt;&lt;span&gt;important role in climate policy debates and decisions. However, current estimates differ vastly &amp;#8211;&lt;/span&gt;&lt;br&gt;&lt;span&gt;partly because it is unclear how resilient affected regions, sectors and communities are and how&lt;/span&gt;&lt;br&gt;&lt;span&gt;persistently climate extremes can hence affect them.&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;I&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;span&gt;n this talk, I&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;will&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;give an overview of recent&lt;/span&gt;&lt;br&gt;&lt;span&gt;findings in this research area.&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;Specifically,&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;I will present insights&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;gained from a&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;novel&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;data set&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;br&gt;&lt;span&gt;comprising&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;subnational&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;GDP data from the past 40 years and more&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;than 1500 regions&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;worldwide.&lt;/span&gt;&lt;br&gt;&lt;span&gt;Based on these granular data,&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;we have empirically estimated historic temperature&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;and precipitation&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;br&gt;&lt;span&gt;impacts at different time scales, from daily fluctuations&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;and extremes&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;to changes in the long-term&lt;/span&gt;&lt;br&gt;&lt;span&gt;mean.&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;In total, we have identified five separate impact channels &amp;#8211; most of them&lt;/span&gt; &lt;span&gt;have been&lt;/span&gt;&lt;br&gt;&lt;span&gt;unaccounted for in previous assessments.&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;Our findings show that&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;economic output&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;is strongly affected&lt;/span&gt;&lt;br&gt;&lt;span&gt;by rainfall and temperature changes but that these effects display large spatial heterogeneity&lt;/span&gt; &lt;span&gt;.&lt;/span&gt;&lt;br&gt;&lt;span&gt;Whereas&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;low-income, low-latitude regions&lt;/span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;are most vulner able to rising and erratic temperatures,&lt;/span&gt;&lt;br&gt;&lt;span&gt;increases in the number of rainy days and extreme rainfall events are most harmful in wealth y,&lt;/span&gt;&lt;br&gt;&lt;span&gt;industrialized countries.&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;/span&gt;&lt;span&gt; &lt;span&gt;I will conclude by discussing implications for assessments of the costs of&lt;/span&gt;&lt;br&gt;&lt;span&gt;climate change&lt;/span&gt;&lt;/span&gt;&lt;span&gt;&lt;span&gt;.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;