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Together with Martin Henseler I just published an article entitled “The impact of weather on economic growth and its production factors” in the journal Climatic Change.

Here is the abstract:

We investigate the influence of weather on countries’ GDP and their main components of production, namely total factor productivity, capital stock, and employment. Our panel dataset includes annual observations on 103 countries for the period 1961–2010. We find that the main impacts of weather occur through temperature and drive the growth in GDP. Our results show that, for higher levels of temperature, the poor countries are much more strongly impacted than the rich countries. We also find that weather impacts per capita GDP growth through all its factors of production, with the largest impacts on total factor productivity. Again it is the poor countries for which these impacts are the strongest. The findings provide empirical evidence for negative impacts of temperature on economic growth and its factors of production and furthermore point towards climate change as an important driver of international inequality.

For journalists or non-academic readers, a non-scientific version of our article just went online at the magazine The Ecologist.

The main conclusion of this article is the following:

Climate change already prevents poor countries from reaching their full growth potential, and with increasing future temperatures they are going to fall even further away from that potential.

The cumulative effects can be horrendous. The solutions for this problem are well-known.

For governments: price carbon via a tax or via cap-and-trade. If necessary regulate companies and consumers.

For individuals: don’t vote for nationalists. Someone who places “America first” or who views migrants as the source of evil is clearly unfamiliar with how the world works. Within a family nobody really places the own interests above those of the other family members. International cooperation between countries should not – and can not – work any differently. Also, think twice before you buy – do you really need this?

For companies: Yes, prices matter, productivity is important, shareholder value a useful indicator. But do not be mistaken: There very often is little trade-off between producing green and sustainably and staying same-old-same-old. Going green and sustainable, and doing this well, is only a matter of good leadership.

Some information about my co-author:

Martin Henseler holds a PhD in agricultural science from the University of Hohenheim and is specialized in agricultural economics. From 2008 to 2012 Martin worked for the Joint Research Center-IPTS of the European Comission (Sevilla). Between 2012 and 2016 Martin continued his research activities as a freelance researcher. Martin has been working at the Thünen Institute of Rural Studies since 2017. He is affiliated to the Partnership for Economic Policy (PEP) Network and to L’Equipe D’Economie Le Havre – Normandie (EDEHN) of the University of Le Havre. Martin currently works on the regional estimation of microplastic emissions into agricultural soils, as well as on regional agro-economic models in agricultural and environmental policy impact analysis (applied to water quality, biofuels, greenhouse gas emissions, mitigation measures and impacts of climate change).

Friday the 15th of March 2019 marked a new beginning, or so they say. Kids all around the world took the future in their own hands and marched onwards in a desperate attempt to make their voices heard. “The future is ours, don’t take it away from us,” they shouted. “Time to wake up,” was written in big print. “We have no planet B,” was a common reminder. The enthusiasm was really overwhelming. Nobody expected close to 10,000 students demonstrating in Luxembourg alone. Hundreds of thousands of German students marched the streets, the biggest number of young kids demonstrating since the sixties. Even the politicians came to show, one would guess, their support. In France,  a sizable number of the gilet jaune, for some reason, joined the Friday strikes. What next? An assessment and suggestions.

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This Friday, the 15th of March 2019, the students across https://brussels.carpe-diem.events/data/afisha/o/52/3f/523f561d58.jpg?1550656637the world are going on a strike. The goal is to wake up their politicians to the tasks ahead: we aren’t doing enough for our future, our world’s sustainability is not ensured, the climate is changing and we are simply not putting in enough effort to sufficiently minimize that change.

In my opinion, this grassroot movement, where our young kids are finally taking interest in something else but Fortnite, namely to secure their own future, could be a game changer. In order to support this movement, I was invited yesterday to one of the schools in Luxembourg, Lycee Technique Joseph Bech in Grevenmacher, and spent two hours presenting the climate change problem, why actions are too limited, what can and should be done, and why it is of utmost importance to especially strike in countries such as Luxembourg, and I took some time to discuss with the students. On Thursday I will do the same in Fieldgen, another school in the city of Luxembourg. So far the response has been very encouraging and the students are now far more motivated to go out and take their future in their own hands. Thus, I can only motivate everyone out there to explain their students the reasons for the strike, and the need of going out to show that even if the politicians don’t think this is an important enough problem, the young generation knows it is one.

According to the latest scientific research, the current climate action of all countries combined would imply a warming of around 3.4°C (above the pre-industrial level) by the end of the century. However, 1.5°C warming is what is currently considered to be a safe, acceptable level of warming. Without a significant change in the politicians’ attitude towards climate change and without a substantial change in their willingness to act, we are likely to see temperature increases that lead to unforeseeable consequences for life on planet Earth.

I can only reiterate a quote that has been attributed to the Dalai Lama: “If you think you are too small to make a difference, try sleeping in the same room with a mosquito.” Thus, students across the world, do not believe you are too small to make a change. Go and be that mosquito in the eyes of your politicians.

 

I have just come across the article “An Economist’s Guide to Climate Change Science“, written by Solomon Hsiang and Robert Kopp, published recently in the Journal of Economic Perspectives, Fall 2018. They mainly summarize the recent literature on climate change and provide some insights from economists on this topic. Should you read their article? What is missing from it?

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Yossi Sheffi, a Professor of Engineering Systems at MIT, and Director of the MIT Center for Transportation and Logistics, recently wrote an article on Project Syndicate entitled “Green Lobby’s Misdirected Anger“. He argues that our current efforts to curb carbon emissions are insufficient to keep temperature increases below 1.5°C and suggests the only real alternative is geoengineering and nuclear fusion. I disagree.

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In October 2018 IPCC published a special report on the impacts of global warming of 1.5 °C above pre-industrial levels. This report has been widely publicized in media across the globe such as BBC News, Financial Times, EURACTIVE or the New York Times. The conclusion is that there is an urgent need for a quick action. One issue that economists in general would have with this report is whether or not it makes sense to stick to the 1.5°C target from a cost-benefit point of view. So what do we know?

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