Using novel nighttime lights and high-resolution atmospheric reanalysis, this paper exploits exogenous fluctuations in temperature and precipitation to identify the causal effects of weather disturbances on local economic growth in the Philippines – the world’s most disaster-prone country. Our findings reveal that heightened temperature variability significantly dampens growth, but only in poor municipalities. This effect persists for at least 2 years after the initial shock. Furthermore, the relationship between weather shocks and growth is nonlinear. We also demonstrate that adverse weather events impede growth by disrupting agricultural productivity and essential service sectors, including wholesale and retail trade, health and education. Overall, our results highlight the importance of understanding the distributional impact of climate change within countries, its underlying mechanisms, and how economic development policies can help shield poor municipalities from the vagaries of the weather.

Understanding how households adapt to hurricanes is increasingly important as these events become more frequent and severe. This paper examines how past hurricane exposure influences current household preparedness, focusing specifically on the stockpiling of bottled water. Leveraging scanner data on bottled water purchases for households in the Southeastern United States, we employ a difference-in-differences event study framework to analyze how repeated hurricane experiences affect consumer behavior. Our results indicate that households exposed to hurricane warnings do not increase their preparedness in the subsequent hurricane season, and those experiencing a landfall event underprepare. These results suggest limited learning from past events.

Will rising temperatures from climate change affect labour markets? This paper examines the impact of temperature on hours worked, using panel data from Peru covering the period from 2007 to 2015. We combine information on hours worked from household surveys with weather reanalysis data. Our findings show that high temperatures reduce hours worked, with the effect concentrated in informal jobs rather than in weather-exposed industries. These results suggest that labour market segmentation may shape how climate change affects labour outcomes in developing countries.

While previous scientific literature has found evidence that warming winters result in a loss of crop yields, recent studies suggest that temperature alone may not be the sole factor in determining yields. In this study, we investigate multiple climatic factors (freezing degree days (FDD) and snow cover fraction) to evaluate the heterogeneous impact of snowpack insulation on winter wheat yields in China. We find that a unit increase in FDD causes a loss of 2.37 kg/hectare in winter wheat yields. Furthermore, our results show that snowpack insulation has a statistically significant negative effect on winter wheat yields at lower and middle quantiles, but a statistically significant positive effect at higher quantiles of the winter wheat yields distribution, suggesting that snowpack insulation is important in maintaining higher winter wheat yields.

Using a dynamic computable general equilibrium model that differentiates cropping activities and labour by sex and includes household home production, this study examines the effects of rainfall variability in Burkina Faso from both a macroeconomic perspective and a gender lens. The simulation of the annual rainfall pattern observed in the country over the past decade highlights its broad economic effects and confirms the greater sensitivity of female-led cropping activities. It also underscores the differential impacts on female and male workers in the labour market and within households, revealing the interactions between the non-market and market spheres of the economy when a rainfall shock occurs. Nevertheless, additional simulations suggest that promoting water management systems or more water-stress-resistant crop varieties could help mitigate the effects of rainfall variability and that targeted measures to support female farmers could effectively reduce their specific vulnerability.

An increasing number of disaster relief programs rely on weather data to trigger automated payouts. However, several factors can meaningfully affect payouts, including the choice of data set, its spatial resolution, and the historical reference period used to determine abnormal conditions to be indemnified. We investigate these issues for a subsidized rainfall-based insurance program in the U.S. using data averaged over 0.25° × 0.25° grids to trigger payouts. We simulate the program using 5x finer spatial resolution precipitation estimates and evaluate differences in payouts from the current design. Our analysis across the highest enrolling state (Texas) from 2012 to 2023 reveals that payout determinations would differ in 13% of cases, with payout amounts ranging from 46 to 83% of those calculated using the original data. This potentially reduces payouts by tens of millions annually, assuming unchanged premiums. We then discuss likely factors contributing to payout differences, including intra-grid variation, reference periods used, and varying precipitation distributions. Finally, to address basis risk concerns, we propose ways to use these results to identify where mismatches may lurk, in turn informing strategic sampling campaigns or alternative designs that could enhance the value of insurance and protect producers from downside risks of poor weather conditions.

Climate change increasingly threatens human development, economic resilience and labour market stability. Using panel data from Chinese A-share listed firms (2007–2021), this study quantifies the employment impacts of extreme temperatures. A one-standard-deviation increase in exposure reduces employment by 0.07 per cent, equivalent to an average loss of 0.0054 workers per firm and 4.36 jobs across the sample. Extreme heat has a stronger effect than cold, with temperature bin analysis showing an average loss of 0.191 workers per firm and 15.565 jobs overall. Mechanism analyses indicate that extreme temperatures heighten operational risks and financial constraints, reducing labour demand. Internal and external buffers are identified: higher wages mitigate employment losses, government subsidies provide external support, while robot adoption and supply chain concentration show limited moderating effects. Heterogeneity analyses reveal greater vulnerabilities in underdeveloped, resource-dependent and climate-sensitive regions. Results emphasize the need for climate-adaptive policies to protect employment amid rising environmental risks.

This article analyzes the influence of hurricane strikes on the returns of sovereign bonds issued by Cuba, the Dominican Republic and Haiti between 1905 and 1930. The study uses a fixed effects regression model to isolate the impact of hurricane-induced destruction on bond returns, providing a deeper understanding of market reactions following natural disasters. The article shows that hurricanes during this period, which have the potential to cause significant damage, increase bond returns by an average of 0.9 percent in the same month. This suggests that investors demand a risk premium on sovereign bonds from hurricane-prone regions due to the direct impact and broader economic consequences of these disasters.

Environmental outcomes can be shaped by underlying politics. This study investigates whether pre-determined election timings affect these outcomes by combining electoral data with remote sensing data on crop burning, forest fires, slash-and-burn activity, and tree cover for 28 major states (covering approximately 3800 assembly constituencies) in India from 2008 to 2019. Analysing 71 elections during this period reveals evidence of the presence of electoral cycles in environmental outcomes, with non-election years experiencing higher levels of environmentally harmful activities compared to election years. These cycles are more pronounced when the incumbent’s party wins without a supermajority in state elections. The study further shows that specific factors, such as high-yield crop varieties, poverty levels, and Scheduled Tribe population proportions, also shape these environmental outcomes across the electoral cycle.

While a growing body of literature studies the effects of weather shocks on economic activity in low-income countries, relatively little is known about their impact on cross-border capital flows. This study investigates whether weather shocks, specifically deviations in precipitation and temperature from their long-term averages, trigger capital flight from Africa. Exploiting the variation in within-country exposure to weather shocks, we find that temperature shocks lead to increased capital outflows and trade misinvoicing. The long-run relationship between temperature and capital flight is conditional upon country-specific factors, such as reliance on oil exports, institutional frameworks and financial infrastructures. Our findings reveal a moderate role of state capacity in the relationship between weather shocks and capital flight, highlighting the need for further investigation into other potential mechanisms.

Climate change can have significant consequences on the world economy, a possibility explored in this paper. We simulate the world economy using data from 20 economies spanning from 1999 to 2023 in a Global Vector Autoregression (GVAR) framework. Our hypothesis posits that temperature anomaly shocks impact economies through financial markets, which then transmit the shock to production. We model financial markets using four key indicators: currency markets, stock markets, short-term credit markets, and long-term credit markets. Our findings reveal that temperature anomaly shocks: i) trigger a global recession, ii) induce fluctuations across all financial markets, iii) lead to depreciation of domestic currencies, declines in stock markets, and decreases in long-term interest rates, and iv) elicit a minor response in short-term interest rates. These results highlight the presence of spillover effects from temperature anomalies. We validated our findings using alternative configurations (time-varying and fixed bilateral trade), with the main conclusions remaining consistent. Our study suggests that financial markets, particularly the stock market, serve as transmission channels for the consequences of climate change.

Excessive car ownership in cities has led to issues including congestion, air pollution and resource consumption. This paper investigates the impact of rail transit openings on automobile purchases in China based on detailed car sales data during 2013–2015 and using two-way fixed effects panel models. Our study reveals an average decrease of 2.27 per cent in car sales due to rail transit openings. Further analyses of cars with different fuel economy reveal stronger effects on fuel-efficient cars, indicating larger substitution elasticity between public transportation and driving for people with less income. Results also show the negative impact of rail transit openings is larger in cities with more developed economies, higher public revenue, larger population, bigger area and fewer buses. The decline in car sales translates into savings of 7.9 billion liters of gasoline and a reduction of about 20.3 million tons in life-cycle carbon emissions.

Climate change can lead to increased pest migration and more frequent outbreaks by altering pest life cycles and habitats. Farmers facing increased temperatures or rainfall resort to more pesticides, emphasizing the need for adaptive pest management. This article evaluates the economic benefits of farmer networks for pest management by applying an economic model of social learning to a pilot network in Iowa. Our results show significant variation in the network’s effectiveness. We find that networks are particularly valuable for farmers facing high pest infestation risks, offering over $300 per acre in value against the impacts of extreme heat.1

Wine is the most differentiated of all farm products, with much of the differentiation based on the location of production. In this paper, we estimate the effects of climate and vintage weather on California's varietal wine quality and prices. Our analysis is based on a sample of premium wines rated by Wine Spectator magazine between 1994 and 2022 and a comparable sample of secondary market auction prices from K&L Wine Merchants, each matched to spatially detailed weather data from PRISM. We find that extreme temperatures, particularly extremely hot temperatures, caused prices to decline. Absent additional adaptation, climate change will harm wine quality and disrupt quality signals from geographical indications in California's premier wine regions.

The social organisation of productive and reproductive labour leaves women disproportionately vulnerable to climatic changes and extreme weather events. In the Indian context, this could further reduce women’s labour force participation rates from levels that are already relatively low. Employment opportunities for women in the clean energy sector have been noted to create transformative changes in their lives only with policies such as government intervention to provide accessible public services. Towards this end, I propose a gendered and green job guarantee programme directed towards education, health, public transport (or universal basic services), climate mitigation, and climate adaptation activities.

The intersections between gendered livelihoods and the climate crisis, as well as the gendered and environmental implications of the existing rural employment guarantee in India, are reviewed. Gender-disaggregated employment creation through the proposed job guarantee programme and the budgetary implications are estimated, along with suggestions for potential sources of financing. The programme is estimated to result in the creation of 36 million guaranteed jobs, which accounts for 6% of the workforce as of 2023. Of these jobs, women’s employment opportunities constitute 11.6 million. The number of guaranteed jobs created for women accounts for 4% of the rural female workforce and 11.6% of the urban female workforce. Thus, a gendered and green job guarantee programme in India could be an effective form of government intervention to address the interlinked issues of women’s work and climate action in India.

Technical progress is considered a key element in the fight against climate change. It may take the form of technological breakthroughs, that is, shocks that induce significant leaps in the stock of knowledge. We use an endogenous growth framework with directed technical change to analyze the climate impact of such shocks. Two production subsectors coexist: one subsector is fossil-based, using a non-renewable resource, and yields carbon emissions; the other subsector uses a clean, renewable resource. At a given date, the economy benefits from an exogenous technology shock. We fully characterize the general equilibrium and analyze how the shock modifies the economy’s trajectory. The overall effect on carbon emissions basically depends on the substitutability between the production subsectors, the initial state of the economy, and the nature and size of the shock. We notably show that green technology shocks induce higher short-term carbon emissions when the two subsectors are gross complements, but also in numerous cases when they are gross substitutes.

We estimate the effect of temperature on the economic activity of Mexico utilizing 42 years of quarterly panel data of economic growth at the state level. Our findings elicit a concave relationship between economic growth and temperature that is maximized at around 20°C. Temperatures below or above this level are associated with lower growth rates. Temperature affects aggregate economic activity mainly through the effect it has on the growth of the primary and secondary sectors. In addition, the estimated sensitivity of economic growth to temperature has not decreased within our sample period which indicates that adaptation to climate change has been limited. When combining our panel estimates with temperature projections by the year 2100, our results suggest that quarterly economic growth might be reduced by 0.4 percentage points, on average, under an intermediate scenario of climate change with reductions as large as 1.0 percentage point during the spring and summer quarters.

This study examines the impact of temperature on human well-being using approximately 80 million geo-tagged tweets from Argentina spanning 2017–2022. Employing text mining techniques, we derive two quantitative estimators: sentiments and a social media aggression index. The Hedonometer Index measures overall sentiment, distinguishing positive and negative ones, while social media aggressive behavior is assessed through profanity frequency. Non-linear fixed effects panel regressions reveal a notable negative causal association between extreme heat and the overall sentiment index, with a weaker relationship found for extreme cold. Our results highlight that, while heat strongly influences negative sentiments, it has no significant effect on positive ones. Consequently, the overall impact of extremely high temperatures on sentiment is predominantly driven by heightened negative feelings in hot conditions. Moreover, our profanity index exhibits a similar pattern to that observed for negative sentiments.

The aim of this paper is to analyse the role of climate change on state fragility in sub-Saharan Africa (SSA). To do this, we estimate a country-time fixed effects panel data model using the two-way fixed effects estimator over the period 1995 to 2020 for 45 SSA countries. Our results show that climate change increases fragility in SSA; specifically, rising temperatures and decreasing rainfall increase the social, economic, political and security fragility of SSA countries. The study also reveals that gross domestic product, population growth, migrant remittances, foreign direct investment, natural resources, inflation and agricultural price volatility are mechanisms through which climate change exacerbates state fragility. Based on these results, we recommend climate change adaptation measures such as increasing water storage to cope with periods of extreme drought, growing climate-smart crops, and the introduction of environmental public policies.

This research examines whether high temperatures and exposure to childhood rainfall and heat shocks are a cognitive drag on children in Uganda. First, it asks whether students perform worse on a test on hotter days. Second, it examines whether previous longer-term exposure to high temperatures and unusual rainfall influences current test scores and educational outcomes. The analysis shows that high temperatures on test dates harm test performance, especially for girls and children younger than ten, implying additional temperature control considerations for particular demographics. The analysis of childhood climate shocks, which employs within-parish distributions of rainfall and heat, shows that children who experience rain or heat above the $80^{th}$ percentile of the parish distribution from birth until age 4 have worse learning outcomes in math, English, or local language literacy.