Climate Change and Infrastructure Investment in Developing Countries: The Case of Mozambique

UNU-WIDER working paper. 2011/92. WP 92

Posted: 26 Nov 2014

See all articles by Channing Arndt

Channing Arndt

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Kenneth Strzepek

University of Colorado at Boulder; Harvard University - Harvard Kennedy School (HKS)

James Thurlow

UNU-WIDER; International Food Policy Research Institute (IFPRI)

Date Written: December 2011

Abstract

Climate change may damage road infrastructure to the potential detriment of economic growth, particularly in developing countries. To quantitatively assess climate change and its consequences, we construct a climate-infrastructure model based on stressor-response relationships and link this to a recursive dynamic economy-wide modelto estimate and compare road damages to other climate change impact channels. We apply this framework to Mozambique and simulate four future climate scenarios. Our results indicate that climate change through 2050 is likely to place a drag on economic growth and development prospects. The economic implications of climate change appear to become more pronounced from about 2030. Nevertheless, the implications are not so strong as to drastically diminish development prospects. An adaptation policy of gradual evolution towards road designs that accommodate higher temperatures and follows rainfall trends (wetter or dryer) improves outcomes. At the same time, a generalized policy of upgrading all roads does not appear to be merited at this time. Our findings suggest that impact assessments should include the damages on long-run assets, such as infrastructure, imposed by climate change.

Keywords: climate change, infrastructure vulnerability, productivity, economic growth, Mozambique

JEL Classification: Q54, O44, O55

Suggested Citation

Arndt, Channing and Strzepek, Kenneth and Thurlow, James, Climate Change and Infrastructure Investment in Developing Countries: The Case of Mozambique (December 2011). UNU-WIDER working paper. 2011/92. WP 92. Available at SSRN: https://ssrn.com/abstract=2530946

Channing Arndt (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6 B
Helsinki, FI‐00160
Finland

Kenneth Strzepek

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO 80309
United States

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

James Thurlow

UNU-WIDER ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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