Climate change and economic growth in sub-Saharan Africa: an empirical analysis of aggregate- and sector-level growth

Abstract

AbstractThis paper utilizes a panel dataset encompassing 43 sub-Saharan African countries spanning from 1970 to 2019 to investigate the impact of climate change on both aggregate- and sector-specific economic growth. Via fixed effects and seemingly unrelated regression models, I show that climate change, characterized by rising temperatures and diminishing precipitation, exerts a detrimental influence on both aggregate and sectoral growth, albeit with varying degrees of severity. Such diverse effects emanate from the significant impacts of climate change on the agricultural sector, resulting in discernible alterations in output. Conversely, the industry, manufacturing, and service sectors demonstrate comparatively minor susceptibility to climate-induced change. Furthermore, the analysis highlights that the sub-Saharan African countries most vulnerable to climate change experience the greatest economic repercussions, and the most sensitive countries suffer the most.