Estimating the Consequences of Climate Change from Variation in Weather
21 Pages Posted: 17 Sep 2018
Date Written: September 2018
I formally relate the consequences of climate change to time series variation in weather. First, I show that the effects of climate change on adaptation investments can be bounded from below by estimating responses to weather outcomes. The bound becomes tighter when also estimating responses to forecasts. Second, I show that the marginal effect of climate change on long-run payoffs is identical to the average effect of transient weather events. Empirical work should begin estimating the average effect of weather within each climate, which differs from previous approaches.
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