Quantifying Indias Clima Climate V te Vulner ulnerability bility - - PowerPoint PPT Presentation

INDIA POLICY FORUM 2018

Quantifying India’s Clima Climate V te Vulner ulnerability bility

Melissa LoPalo1, Kevin Kuruc1, Mark Budolfson2, Dean Spears1,3

1 University of Texas at Austin 2 University of Vermont 3 Indian Statistical Institute – Delhi Centre; and r.i.c.e.

Climate change and the economy

• Increase in global average (and extreme)

temperatures over next century “virtually certain” (IPCC 2007) but how much depends on policy

• Classic externality: Individual actions cause harm;

collective action needed to solve

• Economists’ theoretical solution: Equate marginal

social cost of mitigation to marginal social benefit of averted damages →How much damage?: We quantify the potential damages from climate change, to Indian people only

Developing countries are especially vulnerable to climate damages

• Developing countries are disproportionately located in

the tropics (hotter starting climate)

• More people are exposed to heat:
• Less air conditioning
• More outdoor work
• Pre-climate-change health of poor people is worse
• India is particularly vulnerable due to its combination
• f heat,

, pover erty ty, and d humidi idity

(see also Mani, et al. World Bank, 2018)

Outline

Microeconomic evidence: The consequences

• f heat and humidity

Macroeconomic projections: How much are climate damages worth? Health co-benefits: Consequences of mitigation for Indians today Concluding questions: What is India’s best response to international climate injustice?

Micr Microecon

• economic
• mic

Evidenc Evidence: e:

The consequences of heat and humidity

Em Empir iric ical al str strat ateg egy: y: Learn from cases where the weather deviates from expected seasonal trends

• No empirical technique with past data can see the effects of

future climate change: we must study past realized weather

• But learning from the weather has difficulties:
• Avoid confusing effects of weather with effects of place or season
• Climate adaptation might reduce future vulnerability
• Recent economic literature compares seasonally unusually hot

and cold days or months within a place, disentangling the effect of temperature from other factors (Dell et al., 2012, and others)

• This literature finds significant effects on GDP growth, productivity,

agricultural yields, conflict, health, and more outcomes

Why hum umid idit ity y ma matt tter ers for India’s climate vulnerability

• Humans must maintain a body temperature that is not too

hot and not too cold

• Humidity reduces the effectiveness of sweating
• This is especially important for young babies: temperature

regulation develops in early life

• Literature in the U.S. suggests humidity is an important

moderator of the impacts of heat on health (Barreca, 2012).

• Wet

et Bul ulb b Temperat perature ure (Twb): : a summary measure of temperature, humidity, and air pressure that more completely describes outdoor conditions for humans

• Always lower than “dry bulb temperature” (regular temperature)

Exposure to wet and dry heat occurs in different places

>95 Dry Bulb Days >85 Wet et Bulb Days

Reg egress ession ion strat ateg egy: y: How did weather in the time window of exposure differ from other instances of that month in that place in other years?

Count of very hot and humid days j are degree- day bins 𝑧𝑗𝑞𝑢 = ෍

𝑘

𝛾𝑘 ∙ 𝑈𝑓𝑛𝑞𝑗𝑞𝑢

𝑘

+ 𝛽𝑞 + 𝜄𝑢 + 𝜚𝑌𝑗𝑞𝑢 + 𝜁𝑗𝑞𝑢

Estimating effects of heat and humidity on infant mortality

• Geruso and Spears (2018) estimate the impacts of wet bulb

temperature on infant mortality in 53 developing countries

• an additional day above 85 degrees (F) wet bulb (32 degrees

Celsius at 80 percent humidity) predicts about half an additional infant death per 1,000 births

• rare: last Thursday afternoon in Delhi probably above Twb 85
• We examine the implications for India under current and future

projected weather distributions

• Multiply Geruso and Spears effect size by local counts of days>85

degrees wet bulb

Projected effects of heat and humidity on infant mortality

Obser served ed weath ther er 2000-2010 Project cted ed weath ther er RCP 8.5 (BAU) Benef efit it, due to this effect, ect, of mitigat igation

• n

RCP 8.5 – RCP 2.6

Effect of days in month of birth above 85°F Twb from Geruso & Spears (2018).

Estimating effects of heat and humidity on labor productivity

• LoPalo (2018) estimates the impacts of wet bulb temperature
• n worker productivity
• Examines survey interviewers as workers
• Looks at impact of wet bulb temperature on day of interview on

quantity and quality of data produced

• Daily average wet bulb temperature > 85 degrees results in 10%

fewer interviews completed per hour worked

Projected effects of heat and humidity on labor productivity

Observed weather 2000-2010 Project cted ed weath ther er RCP 8.5 (BAU) Benef efit it, due to this effect, ect, of mitigat igation

• n

RCP 8.5 – RCP 2.6

Effect on outdoor labor productivity of day above 85°F Twb from LoPalo (2018).

What do these effects amount to?

• Causally well-identified

microeconometric estimates are large

• Applied to weather projections: large

effects on future India

• However, little can be known about

future adaptation

• Repeated pattern of in

increa easin ing g in inequa equalit ity y within India, as damages are greater in disadvantaged states

Macr Macroeconomic

• economic

Pr Project

• jections:

ions:

How much are climate damages worth?

Integrated Assessment Models

People produce goods & emissions Stock of CO2 in atmosphere Planet warms People harmed by warmer planet

Any climate IAM must aggregate costs and benefits for people in different times.

• additive over time
• time discounting (although we set this close to zero)
• diminishing marginal utility of consumption
• discount consumption because future Indians will be

richer

• we only consider consequences for Indian population

Mec echanism ism: : mitigation costs reduce consumption today, but prevent climate damages in the future.

𝑋 = ෍

𝑢

1 1 + 𝜍

𝑢

𝑜𝑢𝑣 𝑑𝑢

Damage function: % annual GDP loss, based on (dry bulb) climate change

Sources: Tol (2009); IPCC (2007); Nordhaus and Sztorc (2013)

Global damage function Indian ian damage ge functi ction

• n

Nordhaus (2010) [humidity not included]

Da Dama mage ge fun unct ctio ion: n: % annual GDP loss, based on (dry bulb) climate change

Sources: Tol (2009); IPCC (2007); Nordhaus and Sztorc (2013)

Under low-mitigation policy scenarios, India ia would d lose e 10 10-20% % of GDP for decades to centuries, with a larger population than today

How costly would climate change be to India?: Ou Our val aluation uation metho method

Goal: Compute equivalent near-term loss that would be as bad for social welfare

• 1. First, run model with each level of warming and record

total Indian well-being

• 2. Next, assume no climate damages and instead reduce

consumption for 20 years by x% until we match well- being

Result: A long and deep economic recession is a policy

• utcome that is more easily understood
• Even without considering humidity, damages are

projected to be as costly as a 30% collapse for 20 years

Quanti antifying fying vulner lnerabili ability: ty: % annual 2020-2040 GDP loss, equivalent to levels of (dry bulb) climate change

Source: Authors’ calculations, from modified RICE model. ρ ≈ 0. η = 2.

Quanti antifying fying vulner lnerabili ability: ty: % annual 2020-2040 GDP loss, equivalent to levels of (dry bulb) climate change

Source: Authors’ calculations, from modified RICE model. ρ ≈ 0. η = 2.

Quanti antifying fying vulner lnerabili ability: ty: % annual 2020-2040 GDP loss, equivalent to levels of (dry bulb) climate change

Source: Authors’ calculations, from modified RICE model. ρ ≈ 0. η = 2.

Quanti antifying fying vulner lnerabili ability: ty: % annual 2020-2040 GDP loss, equivalent to levels of (dry bulb) climate change

Source: Authors’ calculations, from modified RICE model. ρ ≈ 0. η = 2.

Removing all Indian emissions would

• nly make a tiny

differe erence nce to India’s climate vulnerability

Robustness: bustness: Alternative inequality aversion assumptions matter because future Indians will be richer than today

Source: Authors’ calculations from modified RICE model.

A note: Our computations assume that the well-being (utility) of a future person should be as important for policy as the well-being of a present-day person.

• These computations do consider the fact that any increase

in money or consumption will probably produce less well- being for most future Indians than for most present-day

• nes, because of future economic growth.
• In technical terms, we assume almost zero pure social time

preference.

• Changing this assumption to de-value future well-being

would mean that climate change is less important.

Health Health C Co-benef benefits its

Consequences of mitigation for India today

Mitigation will lessen the current and future burden of air pollution

• Health co-benefits are

particularly large for India

• 14/20 most polluted cities in the

world are in India (WHO)

• 7 of these cities are in UP and

Bihar: substantial antial overlap p between climate vulnerability and air pollution vulnerability

• Including health co-benefits

along with climate benefits rationalizes aggressive unilat ateral eral CO CO2 mitig tigation ation by India -- i.e. in a non-cooperative equilibrium. (Scovronick, et al., 2018)

Current nt distrib ibut ution

• n of PM2.5

(uses Atmospheric Composition Analysis Group data)

Conc Concluding luding Question Questions

What is India’s best response to international climate policy injustice?

The global distribution of carbon emissions is unjust, due to the high emissions of rich countries.

• Some of the authors of this paper have previously used a

similar model to show that the globally optimal mitigation policy would have rich countries decarbonize much more

• quickly. Such an outcome would result in lower

r peak temperature, perature, higher her global bal welfare, re, and more re equality lity, even without considering backwards-looking responsibility. (Budolfson, et al. 2018)

• But India still has to ask: What

t is its s best t respo sponse nse to global bal climat mate e polic icy y injust ustic ice? e? What is in India’s interest?

On One q e ques uesti tion

• n: Is international

influence possible by a creative non- climate-policy concession from India?

• Mani, et al, 2018: It is important for India to find a way

to influence other countries to comply with Paris.

• Could it be in India’s best interest to offer something
• ther than climate mitigation to developed countries?
• We have no idea what (something symbolic?)
• The point: Deep climate vulnerability motivates

creativity about the best response, in the interest of all Indians

Su Summar mary: y:

• India is especially climate-vulnerable: hum

umid idit ity is a newly-understood source of vulnerability that has not been incorporated into prior estimates.

• A conservative quantification of the aggregate

harms suggests that “business as usual” climate policy could be as bad as a sustained, deep economic disaster.

• India cannot go it alone: Policy-makers must

creatively seek India’s best response to international climate injustice.