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Climate change and economic growth: a heterogeneous panel data approach

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Abstract

Climate change is a global phenomenon. Its impact on economic growth must therefore be analyzed in accordance with its (time-varying) common effects. We present an econometric analysis that evaluates this effect taking into account its global nature. Contrary to previous evidence that ignores the global effects, we obtain that the rising temperature has not decreased growth in real GDP per capita in the second half of the twentieth century for the world countries. However, we obtain a negative effect of rising temperatures and a positive effect of rising precipitation in poor countries. This positive effect of rising precipitation is also confirmed for hot and temperate countries.

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Notes

  1. We have also performed tests without trends and results are confirmed. We should be clear that the non-stationary empirical strategy that we are following is appropriate to deal with empirical applications in which just some of the variables are non-stationary (see, e.g., Eberhardt and Teal 2011).

  2. There are however a number of countries with positive significant signs. Those are Belize, Dominican Republic, El Salvador, Haiti, Mauritania, Mozambique, Nigeria, Sierra Leone, Uganda in the regression of column 1 and Argentina, Dominican Republic, Germany, Jordan, Mozambique, and Saudi Arabia.

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Funding

Tiago Neves Sequeira (CEFAGE-UBI has financial support from FCT, Portugal, and FEDER/COMPETE 2020, through grant UID/ECO/04007/2013 (POCI-01-0145-FEDER-007659)).

Marcelo Serra Santos (CEFAGE-UBI has financial support from FCT, Portugal, and FEDER/COMPETE 2020, through grant UID/ECO/04007/2013 (POCI-01-0145-FEDER-007659)).

Manuela Magalhães received financial support from FCT (via POCI, project number 24068/2005), from the University of Warwick, from the University of Alicante, and from the Spanish Ministry of Economics and Competition (ECO2012-36719).

Author information

Authors and Affiliations

  1. Departamento de Gestão e Economia, Universidade da Beira Interior, Avenida Marques d’Avila e Bolama, 6200-001, Covilhã, Portugal

    Tiago Neves Sequeira & Marcelo Serra Santos

  2. CEFAGE-UBI, Covilhã, Portugal

    Tiago Neves Sequeira, Marcelo Serra Santos & Manuela Magalhães

  3. University Portucalense, Porto, Portugal

    Manuela Magalhães

Authors
  1. Tiago Neves Sequeira
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  2. Marcelo Serra Santos
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  3. Manuela Magalhães
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Corresponding author

Correspondence to Tiago Neves Sequeira.

Additional information

Responsible Editor: Philippe Garrigues

Appendix: A

Appendix: A

A.1 Panel unit-root tests

Table 7 Panel unit-root tests
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A.2 Descriptive statistics

Table 8 Descriptive statistics for rich countries
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Table 9 Descriptive statistics for poor countries
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Table 10 Descriptive statistics for cold countries
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Table 11 Descriptive statistics for temperate countries
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Table 12 Descriptive statistics for hot countries
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A.3 Samples

A.3.1 GDP variable sample

United Arab Emirates; Algeria; Albania; Angola; Argentina; Australia; Austria; Botswana; Belgium; Bahamas; Bangladesh; Belize; Bolivia; Myanmar; Benin; Brazil; Bhutan; Bulgaria; Burundi; Canada; Chad; Sri Lanka; Congo, Republic of; Congo, Dem. Rep.; China; Chile; Cameroon; Comoros; Colombia; Costa Rica; Central African Republic; Cape Verde; Cyprus; Denmark; Dominican Republic; Ecuador; Egypt; Ireland; El Salvador; Finland; Fiji; France; Gambia, The; Gabon; Ghana; Germany; Greece; Guatemala; Haiti; Honduras; Hungary; Iceland; Indonesia; India; Iran; Israel; Italy; Cote dÌvoire; Japan; Jamaica; Jordan; Kenya; Korea, Republic of; Kuwait; Liberia; Lesotho; Luxembourg; Madagascar; Mongolia; Malawi; Mali; Morocco; Mauritius; Mauritania; Oman; Mexico; Malaysia; Mozambique; Niger; Nigeria; Netherlands; Norway; Nepal; Suriname; South Africa; Nicaragua; New Zealand; Paraguay; Peru; Pakistan; Panama; Portugal; Guinea-Bissau; Romania; Philippines; Rwanda; Saudi Arabia; Senegal; Sierra Leone; Spain; Sudan; Sweden; Syria; Switzerland; Trinidad and Tobago; Thailand; Togo; Tunisia; Turkey; Uganda; UK; USA; Burkina Faso; Uruguay; St.Vincent and Grenadines; Venezuela; Swaziland; Zambia; Zimbabwe.

A.3.2 Industrial output sample

Argentina; Australia; Austria; Belgium; Bolivia; Brazil; Canada; Chile; Colombia; Costa Rica; Denmark; Dominican Republic; Ecuador; Ireland; El Salvador; Finland; France; Greece; Guatemala; Honduras; India; Israel; Italy; Japan; Jordan; Luxembourg; Morocco; Mexico; Netherlands; Norway; South Africa; Nicaragua; Paraguay; Peru; Panama; Portugal; Philippines; Spain; Sweden; Switzerland; Thailand; Turkey; UK; USA; Uruguay; Venezuela.

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Sequeira, T.N., Santos, M.S. & Magalhães, M. Climate change and economic growth: a heterogeneous panel data approach. Environ Sci Pollut Res 25, 22725–22735 (2018). https://doi.org/10.1007/s11356-018-2305-7

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  • DOI: https://doi.org/10.1007/s11356-018-2305-7

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