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Adrien Bilal (Harvard University and CEPR) and Diego R. Känzig (Northwestern University and CEPR) will present their paper The Macroeconomic Impact of Climate Change: Global vs. Local Temperature. This paper estimates that the macroeconomic damages from climate change are six times larger than previously thought. The authors exploit natural variability in global temperature and rely on time-series variation. A 1°C increase in global temperature leads to a 12% decline in world GDP. Global temperature shocks correlate much more strongly with extreme climatic events than the country-level temperature shocks commonly used in the panel literature, explaining why the estimate is substantially larger. The authors use a reduced-form evidence to estimate structural damage functions in a standard neoclassical growth model. The results imply a Social Cost of Carbon of $1,056 per ton of carbon dioxide. A business-as-usual warming scenario leads to a present value welfare loss of 31%. Both are multiple orders of magnitude above previous estimates and imply that unilateral decarbonization policy is cost-effective for large countries such as the United States.

Join us on 17 July 2024, from 5 PM (CEST), 11 AM (ET), and 4 PM (BST) with co-authors:

Adrien Bilal
Harvard University and CEPR

Diego R. Känzig
Northwestern University and CEPR

Discussant 
Simon Dietz
London School of Economics and CEPR

The presentation will be followed by a discussion and Q&A session with the audience moderated by:
Christian Gollier
Toulouse School of Economics, EAERE, and CEPR

Register here.

For more information, check the invitation here.

The 14th edition of The State of the Union will take place in Florence last  23 and 24 May 2024. This year, the conference will have a special emphasis on the core themes of democracy and the rule of law, the digital and green transition, the future enlargements of the European Union, all of which will play a crucial role in the run-up to the European elections in June 2024.

A policy session on “Resilient economies and institutions to mitigate and adapt to climate change” is jointly organised by FSR Climate and the EAERE Policy Outreach Committee.  The frequency of natural disasters due to climate change is increasing, and institutions across different geographic areas are not equally ready to cope with such events. In fact, the lack of adequate institutional responses is likely to exacerbate the consequences of these events. Making the EU and developing countries better able to cope with the devastating consequences of climate change requires an articulated policy mix around carbon price, and resilient and reactive institutions and processes. Many economical, political and social lessons can be drawn from the recent health and war crises but also natural disasters.

This panel will explore feasible manners to enhance resiliency to climate change pursuing the European Green Deal agenda, taking in consideration the climate mitigation policies. It will also address how to better prepare agriculture, biodiversity, the health system and our economies in general to cope with climate change and how to protect the most vulnerable populations in developing countries and in Europe.

Moderators:

• Simone Borghesi, EAERE President and Director of the Florence School of Regulation – Climate, EUI
• Fabrizia Mealli, Professor of EconometricsEuropean University Institute, EU

Panellists:

• Hans-Martin Füssel, Climate Change Adaptation Expert, European Environment Agency (EEA)
• Shonali Pachauri, Research group leader, International Institute for Applied Systems Analysis (IIASA)
• Massamba Thioye, Project Executive UNFCCC Global Innovation Hub, UN Climate Change Secretariat
• Mira Manini Tiwari, Research Associate, RSCAS, EUI