A new estimate of costs from global warming

The paper, by David J. Winter and Manuela Kiehl, is titled “Long-term Macroeconomic Effects of Shifting Temperature Anomaly Distributions.”  I’ve posted a few papers showing results like “5 to 10 percent of global gdp by 2100” (try here and here), and I promised I would pass along further and different estimates.  Here is the abstract:

This paper uses panel data on 201 countries from 1960 to 2019 to estimate the long-term macroeconomic effects of shifting temperature anomaly distributions. We find that rising average temperature anomalies from historical norms caused by global warming have negative, non-linear impacts on GDP growth. By additionally accounting for volatility and tail composition of the temperature anomaly distribution across a geospatial grid and across time, our approach is a methodological step towards quantifying the macroeconomic impacts of broader climate change. Projected damages are far greater than estimated in previous studies that have focussed on quantifying the macroeconomic impacts of average temperature levels only. Furthermore, in contrast to these studies which suggest that cooler countries would benefit from global warming, our damage forecasts see all countries face significant losses in productivity growth beyond optimum global warming levels of 0.3°C. Against a counterfactual scenario in which temperatures are held flat at today’s levels, 2 to 2.6°C of warming versus pre-industrial levels by 2050 has the potential to reduce projected global output by 30 to 50%. Warming in the range of 4-5°C by 2100 would lead to economic annihilation, consistent with scientific research on mass extinction thresholds and tipping points.

Now I am not sure I understand this paper correctly, but the authors don’t seem to take mitigation or adjustment into account, which would be far greater for sustained global warming than they would be for periodic, earlier temperature anomalies (Lucas critique!).  And I don’t see they have any real empirical argument, from existing data, that “economic annihilation” would occur in some of their scenarios.

So I am skeptical.  Nonetheless I promised you all further reports, and here is one of them.  At the very least you can see what “moves” are needed to get the projected costs of global warming to go higher than are currently estimated.  I would gladly consider more papers in this vein, and this is an important and underdiscussed question, at least from a rational point of view.

Via tekl.