It’s been hot out there. Like water main breaking, train braking, corn burning, scorching heat on the road – not to mention the heat’s effects on human bodies, making it harder to work in construction and harvest crops.
All of this has to play into the gross domestic product reading for the second quarter, right?
The short answer is yes. The longer answer is that it is very difficult to track that effect in real time, but economists are working to do better.
For more than a decade, scientists have constructed forecasts of the likely economic impact of climate change. A 2018 paper, for example, found that the annual growth rate of state-level economic output fell 0.15 to 0.25 percentage points for every degree average temperatures crept higher in the summer—which could take up to a third of economic growth over the next century. And that’s just in the US.
However, these estimates benefit from long-term data sets that allow analysts to compare the effects of temperature and extreme weather events over time. They also tend to project further into the future, which generally produces more eye-catching results, and is more relevant for evaluating the effects of policy interventions intended to curb emissions.
“As a profession, we’ve been really focused on the future economic consequences of climate change, because we’ve been focused on how you should tax carbon emissions,” said Derek Lemoine, an associate professor of economics at the University of Arizona. “We’ve been less focused on what climate change is already doing, in part because we didn’t realize it would happen so quickly.”
But Dr. Lemoine is working to do just that, with the goal of estimating how climate change affects the economy at nearly the same time that statistics like GDP are being compiled.
Other researchers are working to develop measures of economic growth that integrate not only the production of goods and services – which in themselves can accelerate climate change – but also environmental and social elements.