Temperature rises could hamper developing world growth

Higher temperatures can lower productivity in non air-conditioned factories like this one owned by bead manufacturer Kazuya in Nairobi, Kenya, says MIT’s Ben Olken. Credit: Amy the Nurse/Flickr

Higher temperatures play a role in economic progress that brings bad news for poorer countries. Their development efforts may be slowed as the world warms further, suggest researchers at the Massachusetts Institute of Technology (MIT) and Northwestern University in Evanston, Illinois. Looking at over 50 years of weather data, MIT’s Ben Olken and his colleagues showed that every 1°C temperature increase shaves 1.3 percent off a poor country’s growth, over the course of a given year. That can have a big impact, considering the World Bank projects that developing countries’ economies will grow by 5.4 percent in 2012. “The key points of our study for thinking about climate change are that a) the impact seems to be larger for poorer countries and b) there is at least the possibility that the economic magnitude of the costs of higher temperatures for poorer countries could be quite large,” he told Simple Climate.

People have been asking whether temperature influences how rich a country is for centuries, with historian Ibn Khaldun discussing it in his book Muqaddimah in 1377. But researchers are still trying to tease out the various ways it can play a part even today. Getting a grip on this subject becomes more important as the world warms in response to human CO2 emissions, Ben noted. “Given the interest in global climate change, the link between temperature and economic growth is clearly important to understand,” he said. “While there are many studies that try to simulate these impacts, we thought it was very important to try to look, historically, at what actually happens when it gets warmer. When we thought of doing this, we were very surprised that nobody had really done it before.”

Ben, MIT’s Melissa Dell and Northwestern’s Ben Jones brought together temperature, rainfall and economic output data for 1950-2003 from 125 countries. In a paper published in the July edition of the American Economic Journal: Macroeconomics they compared temperature and rainfall changes against economic growth. By studying year-to-year changes they could avoid assumptions about what links exist and remove the effects of unchanging national factors. Looking at economic growth both in the same year as the weather data and up to ten years later allowed them to see how long any impacts lasted. While economic growth in poor countries was affected by temperature, there was little effect on growth in rich countries. Changes in rainfall have relatively mild effects on national growth in both rich and poor countries. Their data showed that these were permanent effects on growth, rather than temporary dips in output after which the countries continued the progress they were making before.