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Regional Science Contributions to Measuring Climate Change Impact

Paper Session

Friday, Jan. 5, 2024 8:00 AM - 10:00 AM (CST)

Marriott Rivercenter, Conference Room 16
Hosted By: North American Regional Science Council
  • Chair: Sandy Dall'erba, University of Illinois-Urbana-Champaign

Climate Change and the Geography of the U.S. Economy 

Sylvain Leduc
,
Federal Reserve Bank of San Francisco
Daniel Wilson
,
Federal Reserve Bank of San Francisco

Abstract

This paper examines how the spatial distribution of people and jobs in the United States
has been and will be impacted by climate change. Using county-level weather data from 1951
to 2020, we estimate the longer-run e ects of weather on local population, employment, wages,
and house prices using a panel distributed lag model. The historical results point to long-lasting
negative e ects of extreme temperature on each of these outcomes. We highlight that a long
lag structure is necessary to appropriately capture the longer-run e ects of climate change,
as short-run e ects are often small and imprecisely estimated. Using county-level weather
projections based on alternative greenhouse gas emissions scenarios, we use the estimated
models to project the spatial distribution of these local economic outcomes out to 2050. The
results point to substantial reallocations of people and jobs across the country over the next
three decades, with mobility increasing by between 33 and 100 percent depending on the
scenario. Population and employment are projected to shift away from the Sunbelt and toward
the North and Mountain West. We document that this would, in fact, be a continuation of a
historical pattern: Over the past four decades the relationship between population growth and
hot climates across the United States has turned from strongly positive to slightly negative.
We present a spatial equilibrium model to interpret the results, highlighting the impacts of
climate change on amenities, productivity, and the disutility of labor.

Difference-in-Differences with Endogenous Externalities: Model and Application to Drought Impact

Sandy Dall'erba
,
University of Illinois-Urbana-Champaign
Andre Chagas
,
University of Sao Paulo
William Ridley
,
University of Illinois-Urbana-Champaign
Yilan Xu
,
University of Illinois-Urbana-Champaign
Lilin Yuan
,
Nankai University

Abstract

The difference-in-difference (DID) framework is now a well-accepted method in quasi-experimental
research. However, DID does not consider treatment-induced changes to a network linking
treated and control units. Our instrumental variable network DID methodology controls first for the
endogeneity of the network to the treatment and, second, for the direct and indirect role of the treatment on any network member. Estimations of the drought impact on global wheat trade and production demonstrate the performance of our new estimator. Results show that DID disregarding the network and its changes leads to significant underestimates of overall treatment effects.

Climate Change Influence on National Park Visitation and Seasonal Employment in Arizona

Dari Duval
,
University of Arizona
George Frisvold
,
University of Arizona

Abstract

Climate change is expected to shift the geographic and temporal availability of outdoor recreation opportunities. Studies of U.S national parks have found evidence of shifts in peak visitation periods and temperature extremes at the high end of historic ranges. Outdoor recreation demand is influenced by weather, including temperature and precipitation. Meanwhile, weather and climate also affect the attributes of an area’s natural resources and suitability as a destination for outdoor recreation. In recent years, rural counties that offer outdoor recreation opportunities have outperformed rural counties that do not, in terms of jobs earnings growth and in-migration. In fact, the U.S. federal government is promoting outdoor recreation as a target industry for rural economic development. However, for those areas that currently depend on outdoor recreation as well as those that are fostering outdoor recreation as an economic development strategy, the implications of climate change for outdoor recreation are important to consider in planning for economic sustainability.
This analysis uses 40 years of monthly climate and park visitation data to analyze the effects of environmental variables on recreation visits to National Park Service system sites in Arizona and to estimate the regional economic effects via changes in national park visitor spending. We consider the effects of short-run and long-run drought, seasonal precipitation, wildfires, and temperature on park visits and assess potential impacts of rising temperatures under climate change. Following from estimated changes in recreation visitor spending in gateway communities, we estimate changes in seasonal employment to evaluate whether the effects of climate change may either lessen or exacerbate seasonal employment patterns in tourism-linked industries within recreation-dependent gateway communities.

Future Patterns of U.S. Agricultural Land Use with Multiple Stressors

Angelo Gurgel
,
Massachusetts Institute of Technology
John Reilly
,
Massachusetts Institute of Technology

Abstract

Climate change, income and population growth, and changing diets will be major stressors for global agricultural markets with implications for land use change. US land use will be affected directly by local and regional forces and indirectly through international trade. There are wide-ranging views on how climate change will affect agriculture, how diets will change, and prospects for economic and population growth. There are debates and uncertainty about the general direction of these forces as it could affect land use globally and in the U.S. Conventional studies suggest relatively little change in cropland use in the near-term to 2050. But others have asked whether the various forces operating globally are a perfect storm in the making.
We investigate how those forces will impact land use changes in the U.S. and their implications from a multisector, multisystem dynamics (MSD) perspective focused on understanding dynamics and resilience in complex interdependent systems, focusing in particular on the Mississippi river watershed. We investigate how global stressors might, in combination, affect regional land use change. Significant land use change in the Mississippi river watershed would have implications for carbon storage, soil erosion, chemical use, hydrology, and water quality.

Discussant(s)
Sandy Dall'erba
,
University of Illinois-Urbana-Champaign
Daniel Wilson
,
Federal Reserve Bank of San Francisco
Angelo Gurgel
,
Massachusetts Institute of Technology
Dari Duval
,
University of Arizona
JEL Classifications
  • Q5 - Environmental Economics
  • R1 - General Regional Economics