Climate Change: The Economic Impact of Climate Change in the Twentieth and Twenty-First Centuries

Abstract

Introduction There is a substantial literature about the future impacts of climate change (Nordhaus 1991; Cline 1992b; Fankhauser 1995; Mendelsohn et al . 2000; Tol 2002a); see Tol (2009b) for an overview. Less is known, however, about the impacts of climate change in the past. While there is no immediate policy relevance of estimates of past effects – as liability is yet to be established (Tol and Verheyen 2004) – such estimates would serve to validate models of future impacts – and thus help to improve these models and build confidence. In this chapter, I turn this question on its head. I use a model to backcast past impacts, thus generating hypotheses to be tested against observations. Unfortunately, there are no direct observations of the economic impact of past climate change. Note that the cause of climate change, past or future, is irrelevant for its impacts. There are, however, some studies that estimate particular aspects of the impact of past climate change, typically focussing on biophysical impacts.