Assaying ramifications of climate change over productivity growth in developing countries

Abstract

Maintaining an appropriate balance between mitigating global warming and boosting economic growth is a significant and complex challenge for all global governments and institutions. Developing countries are having difficulty reducing their negative impacts on the environment, even though their economies are thriving. Hence, the objective of this study is to comprehensively examine the impacts of temperature change, carbon dioxide emissions, human health, capital stock, and energy use over productivity growth for 105 developing countries. For this purpose, annual data for 1996–2022 is collected, and the dynamic generalized method of moments technique is applied to test the impacts of the concerned indicators on productivity growth. The empirical findings reveal that temperature change and carbon dioxide emissions have direct negative impacts, whereas human health positively boosts the productivity growth of developing countries. Additionally, to confirm the robustness and reliability of the findings, this study also analyzed by segregating the whole sample into lower-middle income and upper-middle income countries. Further, temperature change has been observed to be moderating in amplifying the adverse impacts on productivity growth through carbon dioxide emissions and human health. This study suggests the policymakers of developing countries should integrate climate resilience into infrastructure planning and development to resist extreme weather events associated with temperature rise to decrease global warming and boost economic growth and development. Then, they will have greater odds of achieving an ecologically friendly economy that can mitigate the impacts of climate change, inevitably encourage and support sustainable growth, and raise the well-being of society.