Central Asia. Given that the range of temperature varies across countries, we split the temperature distribution within each country into deciles and choose the 60<sup>th</sup> percentile as the baseline group. Figure A4 (Appendix A) shows that the effects of extreme weather are similar to what we observed in Figure 3.

We also provide further support to the regional heterogeneity by estimating the effect of temperature on poverty and inequality by country, adjusted by their real GDP per capital in 2018. Figure A5 (Appendix A) shows that countries bearing the largest effect of global warming are also those with the lowest income such as Uganda, Ghana, and Mozambique.

Next, we further assess the heterogeneity of the effects of temperature across different country characteristics. First, we examine whether a country’s institution may affect the impacts of temperature. This is motivated by the fact that institutions may affect adaptation to climate change through which incentives for individuals and collective action are structured. We use the democracy index from the 2020 report of the Economist Intelligence Unit and categorize countries into different types of regimes: (i) democracy; (ii) authoritarian; and (iii) hybrid. The results presented in Panel A of Table A9 (Appendix A) show evidence that countries with democracy regime appear to be less vulnerable to the impacts of global warming. We also examine the heterogenous impacts of temperature by other country characteristics. For example, countries near the equator have a higher poverty rate caused by an increase in temperature (Panel B, Table A9 in Appendix A). In addition, the effect of temperature is more pronounced in those with higher share of agriculture, while the opposite is found in countries with higher share of manufacturing (Panels C and D, Table A9 in Appendix A). Finally, we find a stronger effect among countries with lower share of trade, but our estimates are not statistically significant (Panel E, Table A9 in Appendix A).

In this paper, we are also interested in examining the role of information and communication technologies (ICTs). It is reasonable to argue that ICTs, particularly the Internet, may contribute to poverty reduction by providing access to markets, decreasing transaction costs, and increasing income for a significant proportion of people living in developing countries. Therefore, we expect that regions with better internet coverage will be less vulnerable to the effects of higher temperatures. To do this exercise, we exploit the ICT Development index from the International Telecommunication Union as well as the global expansion of mobile network (2G, 3G, and 4G) from Collins Bartholomew with the latter being available at the grid level which allows us to construct a regional index. We then present coefficients on the interaction between our ICT measures and temperature in Table A10 (Appendix A). Across all panels, we find strong and consistent evidence of the role of ICT as the mediator. Specifically, areas with better access to ICT/internet broadband are less vulnerable to the effects of higher temperature.

# **References**

Kalkuhl, M., & Wenz, L. (2020). The impact of climate conditions on economic production. Evidence from a global panel of regions. _Journal of Environmental Economics and Management_ , _103_ , 102360.

Kummu, M., Taka, M., & Guillaume, J. H. (2018). Gridded global datasets for gross domestic product and Human Development Index over 1990–2015. _Scientific Data_ , _5_ (1), 1–15.

79