BATHING IN THE BALTIC
On a June day sometime in the early 1990s, encouraged by his friend and fellow economist Jorgen Weibull, Abhijit went swimming in the Baltic. He leaped in and instantly jumped out—he claims that his teeth continued to chatter for the next three days.
In 2018, also in June, we went to the Baltic in Stockholm, several hundred miles farther north than the previous encounter. This time it was literally child’s play; our children frolicked in the water.Wherever we went in Sweden, the unusually warm weather was a topic of conversation. It was probably a portent of something everyone felt, but for the moment it was hard not to be quite delighted with the new opportunities for outdoor life it offered.
It is in the poor countries that there is no such ambivalence. If the earth warms a degree centigrade or two, residents of North Dakota will mostly feel perfectly happy about it. Residents of Dallas, perhaps a bit less. Residents of Delhi and Dhaka will experience more days that are unbearably hot. As just one example, between 1957 and 2000, India experienced on average five days per year with an average daily temperature above 35°C.5 Without a global climate policy, it is projected to have seventy-five such days by the end of the century. The typical US resident will experience just twenty-six. The problem is that poorer countries tend to be closer to the equator and that is where the real pain will be felt.
To make matters worse, the residents of poor countries are less equipped to protect themselves against the potential bad effects of hot temperatures. They lack air conditioning (because they are poor) and they work in agriculture, on construction sites, or on brick kilns where air conditioning is not really an option.
What are the likely impacts of the temperature increases that are going to come with climate change on life in these countries? We cannot just compare warmer and colder places to answer this, since these places are also different in a hundred other ways.
What allows us to say something about the potential impact of temperature change is that the temperature at a particular location fluctuates, on a given calendar day, from year to year. There are years with especially hot summers, years with particularly cold winters, and nice years when both winters and summers are temperate. The environmental economist Michael Greenstone pioneered the idea of using these year-to-year weather fluctuations to get some understanding of the impact of future climate change. For example, if it was especially hot in one district in India in a particular year, was agricultural production lower in that year compared to the same district in other years, or to other districts where it was not so hot?There are various reasons to not trust this particular approach blindly. Permanent climate differences will surely spur innovations to limit their impact. We won’t pick these up in the effects of year-to-year changes, because innovation takes time. On the other hand, permanent changes may have other costs that don’t occur when the change is temporary, such as the draining of the water table. In other words, those estimates could be too small or too large. But as long as the bias in the estimate is the same for rich and poor countries, it is still useful to compare the predictions we get. The general conclusion is that the damage from climate change will be much more serious in poor countries. There will be losses in US agriculture, but the losses in India, Mexico, and Africa will be much larger. In some parts of Europe, such as in the vineyards of the Moselle Valley, there will be more sun warming the vines, and both the quality and quantity of Moselle wine are predicted to increase.6
The effect of hot weather on productivity is not limited to agriculture. People are less productive when it is hot, particularly if they have to work outside. For example, evidence from the United States suggests that at temperatures over 38ºC, labor supply in outdoor jobs drops by as much as one hour per day, compared to temperatures in the 24ºC–26ºC range.7 There are no statistically detectable effects in industries that are not exposed to climate (for example, nonmanufacturing indoor activities).
Children have lower test scores at the end of particularly hot school years. These effects are absent where schools have air conditioning, so they affect poorer children the most.8In India, few factories have air conditioning. In a garment factory in India, a study looked at how labor productivity varied with temperature.9 For temperatures below 27ºC–28ºC, temperature had a very small impact on efficiency. But for mean daily temperatures above this cut-off (about one quarter of production days), efficiency went down by 2 percent for every one degree Celsius increase in temperature.
Putting everything together, across the entire world, a study finds that it being 1°C warmer in a given year reduces per capita income by 1.4 percent, but only in poor countries.10
And, of course, the consequences of a warmer climate are not limited to income. Numerous studies emphasize the danger of hot temperatures for health. In the United States, an additional day of extreme heat (exceeding 32ºC) relative to a moderately cool day (10ºC–15ºC) raises the annual age-adjusted mortality rate by about 0.11 percent.11 In India, the effect is twenty-five times larger.12