Country-Specific Market Impacts of Climate Change

Abstract

We develop a new climate-impact model, theGlobal Impact Model (GIM), which combines futurescenarios, detailed spatial simulations by generalcirculation models (GCMs), sectoral features,climate-response functions, and adaptation to generatecountry-specific impacts by market sector. Estimatesare made for three future scenarios, two GCMs, andtwo climate-response functions – a reduced-form modeland a cross-sectional model. Combining empiricallybased response functions, sectoral data by country,and careful climate forecasts gives analysts a morepowerful tool for estimating market impacts. GIMpredicts that country specific results vary, implyingthat research in this area is likely to bepolicy-relevant.