Social and economic impacts of climate
Authors: Carleton Tamma A. , Hsiang Solomon M. 
Published: September 2016

BACKGROUND
For centuries, thinkers have considered whether and how climatic conditions influence the nature of societies and the performance of economies. A multidisciplinary renaissance of quantitative empirical research has begun to illuminate key linkages in the coupling of these complex natural and human systems, uncovering notable effects of climate on health, agriculture, economics, conflict, migration, and demographics.

ADVANCES
Past scholars of climate-society interactions were limited to theorizing on the basis of anecdotal evidence; advances in computing, data availability, and study design now allow researchers to draw generalizable causal inferences tying climatic events to social outcomes. This endeavor has demonstrated that a range of climate factors have substantial influence on societies and economies, both past and present, with important implications for the future.

Temperature, in particular, exerts remarkable influence over human systems at many social scales; heat induces mortality, has lasting impact on fetuses and infants, and incites aggression and violence while lowering human productivity. High temperatures also damage crops, inflate electricity demand, and may trigger population movements within and across national borders. Tropical cyclones cause mortality, damage assets, and reduce economic output for long periods. Precipitation extremes harm economies and populations predominately in agriculturally dependent settings. These effects are often quantitatively substantial; for example, we compute that temperature depresses current U.S. maize yields roughly 48%, warming trends since 1980 elevated conflict risk in Africa by 11%, and future warming may slow global economic growth rates by 0.28 percentage points year
−1
.

Much research aims to forecast impacts of future climate change, but we point out that society may also benefit from attending to ongoing impacts of climate in the present, because current climatic conditions impose economic and social burdens on populations today that rival in magnitude the projected end-of-century impacts of climate change. For instance, we calculate that current temperature climatologies slow global economic growth roughly 0.25 percentage points year
−1
, comparable to the additional slowing of 0.28 percentage points year
−1
projected from future warming.

Both current and future losses can theoretically be avoided if populations adapt to fully insulate themselves from the climate—why this has not already occurred everywhere remains a critical open question. For example, clear patterns of adaptation in health impacts and in response to tropical cyclones contrast strongly with limited adaptation in agricultural and macroeconomic responses to temperature. Although some theories suggest these various levels of adaptation ought to be economically optimal, in the sense that costs of additional adaptive actions should exactly balance the benefits of avoided climate-related losses, there is no evidence that allows us to determine how closely observed “adaptation gaps” reflect optimal investments or constrained suboptimal adaptation that should be addressed through policy.

OUTLOOK
Recent findings provide insight into the historical evolution of the global economy; they should inform how we respond to modern climatic conditions, and they can guide how we understand the consequences of future climate changes. Although climate is clearly not the only factor that affects social and economic outcomes, new quantitative measurements reveal that it is a major factor, often with first-order consequences. Research over the coming decade will seek to understand the numerous mechanisms that drive these effects, with the hope that policy may interfere with the most damaging pathways of influence.
Both current and future generations will benefit from near-term investigations. “Cracking the code” on when, where, and why adaptation is or is not successful will generate major social benefits today and in the future. In addition, calculations used to design global climate change policies require as input “damage functions” that describe how social and economic losses accrue under different climatic conditions, essential elements that now can (and should) be calibrated to real-world relationships. Designing effective, efficient, and fair policies to manage anthropogenic climate change requires that we possess a quantitative grasp of how different investments today may affect economic and social possibilities in the future.

Two globes depict two possible futures for how the climate might change and how those changes are likely to affect humanity, based on recent empirical findings.
Base colors are temperature change under “Business as usual” (left, RCP 8.5) and “stringent emissions mitigation” (right, RCP 2.6). Overlaid are composite satellite images of nighttime lights with rescaled intensity reflecting changes in economic productivity in each climate scenario.