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This paper examines how temperature affects worker productivity beyond the usual "on average" analysis, with a particular focus on distributional impacts of the increasing heat incidence across high- and low-productivity areas. Using a recentered influence function regression approach, we estimate unconditional reduced-form effects of a location shift in the temperature distribution—consistent with climate change trends—on the labor productivity distribution across counties in the contiguous U.S. We find that labor productivity is largely insensitive to changes in the frequency of cool-to-moderate maximum daily temperatures. However, as temperatures shift above 2 4 ∘ C , the effects on productivity turn increasingly negative, albeit with their magnitudes attenuating as a county's productivity rank rises. While highly productive locations in the top 5% are not adversely impacted even by the hottest temperatures, permanently increasing the incidence of ≥ 3 6 ∘ C temperatures just by a day lowers productivity at the bottom vigintile by a nontrivial 0.22% per year, an equivalent of 10.5 hours of work by a minimum-wage worker. As temperatures continue to rise, not only does worker productivity worsen on average, but the cross-county dispersion therein widens too. Given existing climate forecasts, we predict that future extreme temperatures would further deepen worker productivity inequality. [ABSTRACT FROM AUTHOR]

This paper analyzes the effects of partial cooperation on the breadth and depth of climate agreements in dynamic games in which countries emit, invest in green technology, decide to participate in a climate coalition and participants negotiate the contract duration. When choosing emissions reductions (pledges), coalition countries apply Harstad's (2023a) pledge-and-review bargaining and partially cooperate. We distinguish between stock-independent and stock-dependent investment costs. It is shown that narrow-but-deep agreements may be welfare superior to broad-but-shallow agreements for signatories. In addition, if the degree of partial cooperation is sufficiently high, broad-and-deep agreements and even first best can be achieved. [ABSTRACT FROM AUTHOR]

Using quarterly temperature and employment data between 1990 and 2021, this paper uncovers nuanced evidence on the impact of seasonal temperature within US counties: higher winter temperature increases private sector employment growth while higher summer temperature decreases it. The impacts of higher temperature in milder seasons, fall and spring, are statistically insignificant. Moreover, the negative impact of higher summer temperature persists while the positive impact of higher temperature in the winter is more short-lived. The negative effects of a hotter summer are pervasive and persistent in many sectors: most significantly in "Construction" and "Leisure and Hospitality" but also in "Trade, Transport, and Utilities" and "Financial Activities". In contrast, the positive effects of a warmer winter are less pervasive. The employment effect of a hotter summer has been more severe in recent decades. [ABSTRACT FROM AUTHOR]

There is a lack of evidence regarding how natural resource markets have responded to recent increases in climate-induced extreme events like wildfire. Wildfire can affect the economic value of forests by directly damaging the existing tree stock and by altering landowner risk expectations of future wildfire arrival. This paper uses parcel data over a seventeen-year period to estimate the effects of large wildfires and drought stress on market prices for private timberland across the three Pacific states of the western U.S. In addition to estimating the land price impacts of wildfires on parcels that were directly burned, we identify changes in risk expectations by estimating the impacts from wildfires that burned in close proximity rather than directly on timberland that was sold in the land market. Results indicate that recent increases in large wildfires and drought stress over the past two decades have lowered the economic value of timberland by approximately 10%, or about $11.2 billion in damages across the three Pacific states, with approximately 5.5% (∼$6.2 billion) due to climate change. Most of the wildfire damages arise from changes in risk expectations. Results provide evidence on the costs of climate-induced extreme events on natural capital that have already occurred. • Climate-induced extreme events, such as drought stress and large wildfires, negatively affect the economic value of timberland in the Pacific states. • Wildfires lower timberland values through two avenues: direct damage to the existing forest stock and neighboring fires that alter landowners' expectations of fire arrival. • As a result of recent increases in drought stress and large wildfires, the economic value of timberland has been reduced by approximately 10%, or about $11.2 billion in damages across three Pacific states, with approximately 5.5% (∼$6.2 billion) due to climate change. Most of the wildfire damages arise from changes in risk expectations. [ABSTRACT FROM AUTHOR]

Ricardian analyses of farmland values have become a cornerstone of the literature valuing the impacts of climate change on agriculture. However, concerns about the lack of a formal econometric strategy to deal with omitted farmland characteristics have raised doubts about the identification of such impacts. This paper proposes an original method for estimating Ricardian models with plot fixed effects to control for confounding omitted variables. Specifically, we use plot-level repeat-sales French data from 1996 to 2019 to investigate how differences in farmland prices between two sale dates are explained by differences in climate evolutions. We show that our repeat-Ricardian estimates suggest greater benefits of climate change than those found with standard Ricardian analyses. In particular, our repeat-Ricardian estimates indicate that warmer summers benefit French agriculture, in complete opposition to our pooled Ricardian estimates or to the remainder of the literature. Our repeat-Ricardian results are robust to several specifications, climate length-definitions and sub-samples. We provide elements suggesting that the repeat-Ricardian analysis is better able to capture crop-switching towards high-value crops requiring particular soil conditions (e.g. vineyards). Our repeat-Ricardian analysis also indicates greater benefits of climate change compared to those estimated with short-term weather-based approaches, shedding new lights on previous inconsistent findings from the literature. [ABSTRACT FROM AUTHOR]

This paper analyzes the relationship between temperature, mortality, and adaptation opportunities in a tropical country. Such countries host almost 40% of the world's population and face inherently different environmental, demographic, and socio-economic conditions than their counterparts in temperate areas. Using detailed data from all Colombian municipalities, I show that anomalously hot or cold days increase mortality even at narrow temperature ranges, which are characteristic of the tropics. An additional day with a mean temperature above 27 °C (80.6 ∘ F) increases mortality rates by approximately 0.24 deaths per 100,000, equivalent to 0.7% of monthly death rates. Unlike temperate locations, I find that deaths attributed to infectious diseases and respiratory illnesses drive this relationship in the hot part of the distribution, mainly affecting children aged 0–9. These findings uncover new factors and populations at risk and imply that the average person who dies after a hot temperature shock loses approximately 30 years of life. I also provide evidence that access to health care and quality of services could mediate between temperature and mortality. [ABSTRACT FROM AUTHOR]

This paper proposes a simple two-step estimation method (C limate A daptive R esponse E stimation - CARE) to estimate sectoral climate damage functions, which account for long-run adaptation. The paper applies this method in the context of residential electricity and natural gas demand for the world's fifth largest economy — California. The advantage of the proposed method is that it only requires detailed information on intensive margin behavior, yet does not require explicit knowledge of the extensive margin response (e.g., technology adoption). Using almost two billion energy bills, we estimate spatially highly disaggregated intensive margin temperature response functions using daily variation in weather. In a second step, we explain variation in the slopes of the dose response functions across space as a function of summer climate. Using 18 climate models, we simulate future demand by letting households vary consumption along the intensive and extensive margins. We show that failing to account for extensive margin adjustment in electricity demand leads to a significant underestimate of the future impacts on electricity consumption. We further show that reductions in natural gas demand more than offset any climate-driven increases in electricity consumption in this context. [ABSTRACT FROM AUTHOR]

Although previous studies have examined the association between temperature exposure and pregnancy losses (mainly focusing on the risk of stillbirth), causal estimates are still missing. The literature also lacks projections on the impacts of climate change. Using Hungarian administrative data spanning 1984 to 2018, this paper estimates the effect of temperature on the weekly spontaneous pregnancy loss rate. We show that, compared to a mild temperature, heat causes a substantial increase in the risk of pregnancy loss, whereas cold temperatures slightly decrease it. These impacts are not due to near-term displacement of some pregnancy losses but represent changes in the pregnancy outcomes. Combining the estimated effects with outputs of thirty climate models implies that climate change will increase the spontaneous pregnancy loss rate in the 21st century. The risk of pregnancy loss will be especially elevated during summer. [ABSTRACT FROM AUTHOR]

Policy makers search for strategies to promote resilience and mitigate the effects of future climatic shocks. In this paper, we assess whether small regular cash transfers strengthen poor households' ability to mitigate the welfare effects of drought shocks. We analyze mechanisms through which cash transfers contribute to resilience, including savings, asset accumulation as well as income smoothing in agriculture and off-farm activities. We combine household survey data collected as part of a randomized control trial in rural Niger with satellite data used to identify exogenous rainfall shocks. The results show that cash transfers increase household consumption by about 10 percent on average. Importantly, this increase is mostly concentrated among households affected by drought shocks, for whom welfare impacts are larger than transfer amounts due to households' enhanced ability to protect earnings in agriculture and off-farm businesses when shocks occur. The results suggest that multi-year cash transfer programs can foster poor households' resilience by facilitating savings and income smoothing. [ABSTRACT FROM AUTHOR]

Extreme heat shocks are increasingly linked to poor economic and health outcomes. This paper constructs hour-degree bins of temperature exposure to assess the effects of extreme heat on early child nutrition, a health outcome correlated with educational attainment and income in adulthood. Linking 15 rounds of repeated cross-section data from five West African countries to geo-coded weather data, we find that extreme heat exposure increases the prevalence of both chronic and acute malnutrition. We find that a 2 °C rise in temperature will increase the prevalence of stunting by 7.4 percentage points, reversing the progress made on improving nutrition during our study period. [ABSTRACT FROM AUTHOR]

This paper studies a social planner who chooses countries' carbon prices so as to maximize global welfare. Product markets are characterized by firm heterogeneity, market power, and international trade. Because of the market-power distortion, the planner's optimal policy is second-best. The main insight is that optimal carbon prices may be highly asymmetric: zero in some countries and above the social cost of carbon in countries with relatively dirty production. This result obtains even though a uniform global carbon price is always successful at reducing countries' emissions. Competition policy that mitigates market power may enable stronger climate action. [ABSTRACT FROM AUTHOR]

Scientific evidence reveals that renewable resource stock dynamics are subject to uncertainty due to changes in environmental conditions. Despite its critical impacts on management, little is known about the effects of such uncertainty on the formation of regional fisheries management organizations (RFMOs). In this paper, we design a dynamic stock recruitment framework to examine this issue in a common pool setting. We find that stock growth uncertainty critically affects equilibrium behaviors under both open loop membership and dynamic membership. For instance, we delineate conditions under which uncertainty induces full non-cooperation in equilibrium. Strategic behaviors may also shift equilibrium outcomes from full non-cooperation under deterministic conditions to full cooperation under uncertainty when countries anticipate a small environmental variability. Moreover, strategic interactions to extract the resource stock may lead to higher individual payoffs under uncertainty. We also outline the differences in equilibrium responses of membership, harvest, and payoff to mean preserving spreads under both open loop membership and dynamic membership. [ABSTRACT FROM AUTHOR]

Decreasing greenhouse gas emissions from electricity generation is crucial to tackle climate change. Empirically, however, little is known about the effectiveness of existing economic instruments in the power sector. This paper examines the impact of the UK Carbon Price Support (CPS), a carbon tax implemented in the UK power sector in 2013. Relative to a synthetic control unit built from other European countries, I find that emissions from the UK power sector declined by 20 to 26 percent per year on average between 2013 and 2017. The tax operated via three mechanisms: a decrease in emissions at the intensive margin; the closure of some high-emission plants at the extensive margin; and a higher probability of closure for plants already at risk due to European air quality regulations. [ABSTRACT FROM AUTHOR]

As the frequency and severity of wildfires escalates in many regions, the study of fire-resilient forestry practices becomes crucial. While forest owners may employ several silvicultural practices to mitigate fire damage, the analytical study of optimal forest management has been reduced to the effects of fire on optimal rotation only. The fundamental result of this literature date back to the early 1980s and has remained virtually uncontested since then. This paper develops an infinite rotation cycle forest model in which landowners optimally choose rotation age, volume, and timing of partial harvesting in the presence of fire risk. We show that this setting fundamentally changes earlier results. In particular, more frequent fires imply beginning commercial thinning sooner but not necessarily shortening the rotation age. Two numerical applications highlight the empirical relevance of our findings. [ABSTRACT FROM AUTHOR]

This paper studies how extreme weather and natural disasters affect campaign contributions and elections. Weather events associated with climate change may influence these outcomes by leading voters to re-evaluate the incumbent politician's environmental position. In a short-run analysis, we find that the number of online contributions to the Democratic Party increases in response to higher weekly temperature, with a larger effect in counties with more anti-environment incumbent politicians. In a medium-run analysis, we find that, when a natural disaster strikes, the election becomes more competitive if the incumbent leans more anti-environment: total campaign contributions increase for both candidates and the increase is skewed toward the challenger, the race is more likely to be contested, and the incumbent is less likely to be re-elected. These results suggest that extreme weather events carry a moderate electoral penalty for anti-environment incumbents during 1990–2012. This mechanism will likely play a more important role as the public awareness of climate change continues to increase. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between temperature and hospitalization in China. Using inpatient visit claims of two major public insurance schemes covering 47 cities in 28 provinces for three years, we see a 7.3% increase in hospital admissions on days on which the average temperature is above 27 °C, and a 2% increase in 31-day cumulative hospital admissions relative to a benchmark-temperature day in the subsequent weeks. Such an effect is much larger than evidence from developed economies. Using detailed information on medical bills, we calculate that an additional hot day nationwide is associated with approximately 2 billion yuan (roughly equivalent to 0.3 billion US dollars) increase in medical expenses that are related to inpatient services, 1.9 billion yuan (roughly equivalent to 0.29 billion US dollars) of which is borne by the public insurance system, and 0.2 billion yuan (roughly equivalent to 0.01 billion US dollars) of which is borne by the insured. [ABSTRACT FROM AUTHOR]