Incorporating Climate Uncertainty into Estimates of Climate Change Impacts, with Applications to U.S. and African Agriculture
A growing body of economics research projects the effects of global climate change on economic outcomes. Climate scientists often criticize these articles because nearly all ignore the well-established uncertainty in future temperature and rainfall changes, and therefore appear likely to have downward biased standard errors and potentially misleading point estimates. This paper incorporates climate uncertainty into estimates of climate change impacts on U.S. agriculture. Accounting for climate uncertainty leads to a much wider range of projected impacts on agricultural profits, with the 95% confidence interval featuring drops of between 17% to 88%. An application to African agriculture yields similar results.
The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
“Incorporating climate uncertainty into estimates of climate change impacts” (co-authors Marshall Burke, John Dykema, David Lobell, Shanker Satyanath), Review of Economics and Statistics. May 2015, Vol. 97, No. 2