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GTAP Resource #4656

"Welfare and Production Implications of Climate Change-Induced Impacts on Labour Capacity: Assessment of outputs from 30 CMIP5 Earth System Models."
by Newth, David, Ernesto Valenzuela, Yiyong Cai and Don Gunasekera

Climate change modelling suggests that global surface air temperature and humidity will increase substantially in the future due to the increased radiative effects of atmospheric concentrations of greenhouse gases. Small increases in surface air temperature and humidity can cause significant adverse effects on human health, well being and productivity. The relationship between surface air temperature, humidity and labour productivity is captured by using the Wet Bulb Globe Temperature (WBGT). In this study, we assess the effects of increased WBGT under alternative representative concentration pathway (RCP) scenarios. Analysis of the output from 20 Earth System models (comprising a wide cross-section of climate responses and climate sensitivities) that were submitted to the IPCC Coupled Model Inter-comparison Project Phase 5 (CMIP5), show that across the four IPCC RCP scenarios, China, India, Indonesia, Northern Africa, North America and Australia will see a disproportionate increase in WBGT. Combining these results with ISO standards for labour productivity, (that take into account factors such as how adapted individuals are to their environment, protective clothing, and the ‘physical intensity’ of the labour) we produce detailed labour productivity shocks by region and sector. We use these projected changes in labour productivity as inputs into a global economy-wide model to assess the effects on markets and welfare. We analyse the shifts in labour intensive sectors, under each of the IPCC RCP scenarios. Given the sources of uncertainty about possible effects of climate change, our modelling shows a range of robust economic and welfare implications. Overall, we show that consideration of changes in the WBGT under climate warming indicates increasingly severe environmental limitations on individual labour capacity, and significant reductions in economic development and welfare, due to lost labour productivity. The results entail consequences for price, and p...

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Newth, D. (4/13/2015)
Updated: Newth, D. (4/13/2015)
Visits: 1,265
- Climate impacts

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