Estimating the Consequences of Climate Change from Variation in Weather

Derek Lemoine

doi:10.3386/w25008

Estimating the Consequences of Climate Change from Variation in Weather

Derek Lemoine

Working Paper 25008

DOI 10.3386/w25008

Issue Date September 2018

Revision Date July 2026

Much work seeks to project climate change impacts from quasi-random variation in weather. I formally demonstrate that those projections require strong theoretical restrictions in dynamic environments. I derive an indirect least squares estimator that bounds long-run climate impacts from short-run responses to weather under weaker restrictions. In an application to the U.S. economy, I project that climate change’s effect on daily temperatures will reduce steady-state income per capita by at least 4.2%, over twice what conventional panel approaches project.

I thank numerous seminar participants, three referees, and the editor, Lint Barrage, for valuable comments. I thank Olivier Deschênes, Ryan Kellogg, and Wolfram Schlenker for helpful conversations and Wint Thu for assistance compiling weather and climate model data. An early version circulated as “Sufficient Statistics for the Cost of Climate Change.” My study is exempt from pre-registration requirements because I do not generate data. I rely only on publicly available observational data and analyze it in a way that follows from my formal model. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
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Derek Lemoine, "Estimating the Consequences of Climate Change from Variation in Weather," NBER Working Paper 25008 (2018), https://doi.org/10.3386/w25008.

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Estimating the Consequences of Climate Change from Variation in Weather

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