Heterogeneous Effects of Temperature and Emissions on Economic Productivity Across Climate Regimes

Science of the Total Environment, 145893, 775, 2021

10 Pages Posted: 10 Mar 2021

See all articles by Cosimo Magazzino

Cosimo Magazzino

University of Rome III; Royal Economic Society; Italian Economic Association

Mihai Ioan Mutascu

University of Orleans - Laboratoire d'économie d'Orléans

Samuel Asumadu Sarkodie

University of Nordland - Nord University Business School

Festus Adedoyin

Bournemouth University - Business School, Students

Phebe Asantewaa Owusu

University of Nordland - Nord University Business School

Date Written: 2021

Abstract

The impact of climate change has resulted in several long-term events including extreme temperatures. Besides, the occurrence of climate events impedes economic progress –– affecting economic readiness of climate mitigation. However, the effect of climatic factors on economic productivity has not been extensively covered in existing literature, especially among climate regimes. Here, we use sophisticated panel and time series techniques to examine the heterogeneous effects of temperature and emissions on income from 1960 to 2014. Our empirical results indicate a 1% rise in temperature declines income by 0.39% whereas 1% increase in emission levels stimulates income by 0.22%. This implies a mutual relationship between income and emissions –– where environmental pollution supports wealth creation and vice versa. We find that a shift from optimal temperature levels to extreme patterns hamper economic productivity. Extreme temperatures affect heating and cooling degree days due to increased energy requirements, hence, escalating energy demand and emissions. With the agenda towards emission reduction, this study emphasizes economic structural change through transition from brown to green growth.

Keywords: Heterogeneous effects; Temperature; Climate change; Environmental sustainability; Economic modeling

Suggested Citation

Magazzino, Cosimo and Mutascu, Mihai Ioan and Sarkodie, Samuel Asumadu and Adedoyin, Festus and Owusu, Phebe Asantewaa, Heterogeneous Effects of Temperature and Emissions on Economic Productivity Across Climate Regimes (2021). Science of the Total Environment, 145893, 775, 2021, Available at SSRN: https://ssrn.com/abstract=3791979

Cosimo Magazzino (Contact Author)

University of Rome III ( email )

Via Ostiense 139
Rome, RM 00154
Italy

HOME PAGE: http://scienzepolitiche.uniroma3.it/cmagazzino/

Royal Economic Society ( email )

London
United Kingdom

Italian Economic Association ( email )

Piazzale Martelli, 8
Ancona, AN 60121
Italy

HOME PAGE: http://www.siecon.org/online/en/

Mihai Ioan Mutascu

University of Orleans - Laboratoire d'économie d'Orléans ( email )

Rue de Blois BP6739
Rue de Blois
Orléans cedex 2, Centre 45067
France

Samuel Asumadu Sarkodie

University of Nordland - Nord University Business School ( email )

Bodø, 8049
Norway

Festus Adedoyin

Bournemouth University - Business School, Students ( email )

United Kingdom

Phebe Asantewaa Owusu

University of Nordland - Nord University Business School ( email )

Bodø, 8049
Norway

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