The principal argument against taking strong action to curtail the greenhouse gas emissions that cause climate change has long been that it will be economically costly. By putting a price on carbon, goes the logic, people will spend more for gas, more for home heating — more for many things in the economy, given the dominance of fossil energy in our lives.
A new study just released by the National Bureau for Economic Research, however, now turns this argument completely on its head — arguing that it is warmer temperatures that may be the real economic cost.
The paper, by Tatyana Deryugina of the University of Illinois-Urbana Champaign and Solomon Hsiang of the University of California, Berkeley, shows a fairly dramatic negative influence of heat on economic productivity. In particular, they find that, for every 1.8 degrees Fahrenheit that a given day’s 24-hour average temperature exceeds 59 degrees, economic productivity declines by 1.7 percent. And for a single very hot day — warmer than 86 degrees F — per capita income goes down by $20.56, or 28 percent.
The paper is penned in part as a riposte to those who have long assumed that in the United States, our economy is so advanced — and we’re so insulated by things like air conditioning — that a mere hot day can’t throw off the workforce. “Contrary to this notion that the environment does not matter, we see that economic activity at the county level responds fairly strongly to what temperatures are doing on a day to day basis,” says Berkeley’s Hsiang.