Climate shift uncertainty and economic damages
by Romain Fillon, Manuel Linsenmeier and Gernot Wagner
Abstract:
Focusing on global annual averages of climatic variables can bias aggregate and distributional estimates of the economic impacts of climate change. We here empirically identify dose-response functions of GDP growth rates to daily mean temperature levels and combine them with regional intra-annual climate projections of daily mean temperatures. We then disentangle, for various shared socio-economic pathways (SSPs), how much of the missing impacts are due to heterogeneous warming patterns over space. Global damages in 2050 are 25% (21-28% across SSPs) higher when accounting for the shift in the shape of the entire intra-annual distribution of daily mean temperatures at the regional scale.
JEL: D62, Q56
Draft: "Climate shift uncertainty and economic damages" (this version: 4 November 2025)
Presentations: CESifo Area Conference (15 March 2025); UM6P FGSES Research Conference, Mohammed VI Polytechnic University, Ben Guerir, Morocco (17 April 2025); University of Innsbruck Faculty of Economics and Statistics Research Seminar (9 October 2025), Tinbergen Institute Spatial Economics Seminar (6 November 2025).
