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GTAP Resources: Resource Display

GTAP Resource #6539

"The Economic Effects of Climate Change in Dynamic Spatial Equilibrium"
by Rudik, Ivan, Gary Lyn, Weiliang Tan and Ariel Ortiz-Bobea


Abstract
We develop a dynamic-spatial equilibrium model to quantify the economic effects of climate change with a focus on the United States. We find that climate change reduces US welfare by 4% and global welfare by over 20%. Market-based adaptation through trade and labor reallocation increases US welfare, but with substantial spatial heterogeneity. Adaptation through labor reallocation and trade are complementary: together they boost welfare by 50% more than their individual effects. We additionally develop a new dynamic envelope theorem method for measuring welfare impacts in reduced form and to validate our quantitative model. We find that welfare distributions from our two approaches are consistent, indicating that our quantitative model captures the first-order factors for measuring the distributional impacts of climate change. The level and distribution of the economic impacts of climate change depends the sectoral and spatial structure of the economy, and the extent to which different markets can
adapt.


Resource Details (Export Citation) GTAP Keywords
Category: 2022 Conference Paper
Status: Not published
By/In: Presented during the 25th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2022
Version:
Created: Lyn, G. (4/13/2022)
Updated: Lyn, G. (5/16/2022)
Visits: 251
- Climate impacts
- Trade and the environment
- Economic geography
- New quantitative trade models
- North America


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