Global Warming and Socioeconomic Activities: Impact of Labor Productivity

Abstract

Climate change (global warming) has various impacts on human society and economic activities. One of the important aspects of global warming impacts is labor productivity through temperature increases. Higher temperature negatively affects the efficiency at work. In addition, the impact can vary by region because of differences in the economic structure and the climate conditions. The purpose of this study is to evaluate global warming impact on future economic activities through changes in labor productivity. To evaluate the global warming impact on future economic activities, we used a computable general equilibrium model considering the relationship between temperature and labor productivity. To calculate the future temperature, we used the MAGICC6 (Model for the Assessment of Greenhouse Gas Induced Climate Change version 6). For the future scenarios, we used business-as-usual (BaU) and 2°C scenarios. In the global level, gross domestic product (GDP) was 0.19-0.32% smaller for the BaU scenario when the global warming impact was considered, while the impact on GDP was smaller for the 2°C scenario (around 0.02%). However, the impact differs by region. For primary energy supply, the total supply was 0.33-0.63% smaller for the BaU scenario when the global warming impact was considered, while the impact was slight for the 2 °C scenario (0.01-0.02%). Consequently, CO2 emissions were also affected. In the BaU scenario, CO2 emissions from fossil fuels and industrial process were 0.34-1.18% smaller when the global warming impact was considered. These results suggest that larger the temperature increases, the larger the impact. However, although the degree was not large, it is indicated that the socioeconomic impacts to achieve the 2 °C target were smaller than previously believed.