VoxDev Development Economics S6 Ep37: The macroeconomics of climate change
Sep 17, 2025
Adrien Bilal, an Economist at Stanford University specializing in the macroeconomic impacts of climate change, joins the discussion. He highlights the challenges of modeling economic activity's influence on the environment. Topics include the macro costs of carbon pricing, the risks of carbon leakage, and the need for better adaptation research. Bilal also emphasizes the importance of granular data and addressing non-market impacts, such as mortality and instability, in the face of rising climate extremes and shifting migration patterns.
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Temperature Effects Vary By Measure
- Country-level temperature effects vary: hot countries tend to lose, cold countries can gain from warming.
- Global mean temperature shows much larger, often nonlinear losses driven by ocean warming and extreme events.
Global Mean Temperature Amplifies Damages
- Global mean temperature captures ocean warming and proxies for extreme events, raising damage estimates.
- Using global measures yields much larger aggregate output losses than country-specific temperature regressions.
Pair Granular Climate And Local Data
- Use granular weather data (daily temperature, wind, precipitation) matched with local economic measures to assess extreme-event impacts.
- Pairing high-resolution climate and economic data reveals local channels and adaptation behaviors.
