Mind the gap between the economic effect of climate change and the reality

Abstract

Climate change increases its severity day by day and poses a great threat to our world. Climate change problems almost cause the global economic system to be questioned. This issue is also very important for China, India, Brazil, Russia, Indonesia, Mexico and Turkey, which are expressed as E7 (developing) countries. Climate change forecasts for many countries predict that temperatures will rise as precipitation increases or decreases. Technological improvements are predicted to play an important role in mitigating and adapting to the negative consequences of climate change. This study aims to determine the effect of climate change on the economic growth of E7 countries between the years 2004-2021 using panel data methods. Analysis was done with the Stata 15 program. In the study, firstly, the literature on climate change and economic growth is included. Afterwards, the economic consequences of climate change are discussed. In the following section, solutions that will be effective in combating climate change are explained. Then, the empirical analysis and the obtained findings were included and the study was concluded with the conclusion and evaluation. All variables are statistically significant. Accordingly, while temperature and precipitation negatively affect GDP; Urbanization, population growth and HDI positively affect GDP. According to the consequences of the analysis, it was concluded that climate change negatively affected economic growth.