Estimation of Climate Change Damage Functions for 140 Regions in the GTAP9 Database

Abstract

Climate change damage (or, more correctly, impact) functions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows and households' energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in the GTAP9 dataset.

To illustrate the salient characteristics of our estimates, we approximate the change in real GDP for the different effects, in all regions, corresponding to an increase in average temperature of 3°C. After considering the overall impact, we highlight which factor is the most significant one in each country, and we elaborate on the distributional consequences of climate change.

Keywords: Climate change, integrated assessment, computable general equilibrium, damage function, climate impacts.

JEL Classification: C68, C82, D58, Q51, Q54.