ECONOMICS:

Hotter days might decrease economic growth in poor nations -- study

ClimateWire:

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Rising temperatures in poor countries could impair the economic development of the nations that need it most, a study finds.

One degree Celsius in rising temperatures could result in a 1.3-percentage-point decrease in the economic growth of developing countries. Wealthier nations, however, were less affected, according to a study from the Massachusetts Institute of Technology.

While much attention has been paid to the effect of temperatures on agricultural output -- especially in the shadow of the United States' most devastating drought in 50 years -- MIT researchers say climate change could affect industrial output, as well. One impact could make a poor country a less attractive investment option.

Using temperature data and economic output data from 1950 to 2003, the researchers found that the effects of rising temperatures vary across the countrywide economy, said Ben Olken, a professor of economics at MIT and co-author of the study.

"The agriculture effects are ... more of a one-time effect," Olken said. While a drought or oppressive heat could wipe out a crop in one year, yields usually recover once temperatures return to normal.

The industrial effects, on the other hand, seem to accumulate over longer periods, he said. This, he added, was a surprise.

"I don't think I expected to find the effects nearly as large, nor the breadth of the effects." In the short and medium term, climate change could lead to a widening gap between rich and poor countries, he said.

Productivity and air conditioning

Existing inequalities also play a part. Having air conditioning, for example, could make the difference between a quick, efficient worker and a sluggish one.

"If it's hot to begin with, it can have a direct effect on how productive people can be," Olken said.

Political instability was shown to increase in countries in years of high temperatures. The researchers found a link between weather and the number of "interregnum" periods -- times when a political system is in flux and no strong leadership is established, a situation that foreign investors avoid.

"We find these irregular-year transitions are substantially higher in hot years in poor countries," Olken said.

While the fluctuations in temperature are short-term, the impacts could be lasting. Adaptation to climate change could curb the economic slowdown in poor countries substantially, Olken said.

Nevertheless, the uncertainty of the future of adaptation, as well as technical change and innovation, throws more questions into the equation -- meaning the short-term values given in the study must be coupled with more research to understand the long-term impacts of climate change.

Civil conflicts and wars, however, did not show a link to climate change, according to Olken. Researchers have found it difficult to prove a connection between civil unrest and global warming (ClimateWire, Jan. 19).

The study was published this summer in the American Economic Journal: Macroeconomics.