Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312587 
Year of Publication: 
2024
Citation: 
[Journal:] Energy Economics [ISSN:] 1873-6181 [Volume:] 136 [Article No.:] 107758 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2024 [Pages:] 1-18
Publisher: 
Elsevier, Amsterdam
Abstract: 
We examine the effect of rising temperatures on regional economic development, using annual sub-national data for over 1500 regions in 152 countries between 1990 and 2017. In a panel setting with region- and country-year fixed effects, we find no evidence of a homogeneous or heterogeneous effect of rising temperatures on economic development as measured by regional per capita income. Additionally, we find no non-linear relationship between temperature and economic development. We also employ a long-difference approach that is attuned to exploring the long-run relationship between rising temperatures and regional income. Results indicate that rising temperatures have a negative long-run impact on regional per capita income for a minority of regions located in countries with weak economic, legal and political institutions. Furthermore, these vulnerable regions experience a decline in long-term population and human capital development. The use of alternative regional per capita GDP data from 1950 onwards yields similar empirical results. Our findings suggest that negative economic effects of temperature increase with time, only becoming apparent in the long run for regions in already disadvantaged countries. Thus, country-specific conditions may moderate regional economic vulnerability to future temperature increases due to global climate change.
Subjects: 
Regional temperature
Regional per capita income
Sub-national data
Long-difference approach
Threshold models
Global warmin
JEL: 
O44
O47
Q54
R11
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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