Session 2: Economics for Climate Change

a slide showing the information below on this session

This session was chaired by Professor Ben Groom from the University of Exeter. The panellists presented and reflected on their research before participating in a Q&A session. The following summarized papers were discussed:

  • Olexiy Kyrychenko from CERGE-EI Prague  showed his findings from his paper titled ‘Decomposition of the Temperature-driven Output Losses in India: Plant-level Evidence for the Climate Change Adaptation Policy’. Measuring the effect of temperature on economic indicators, Olexiy investigates temperature-output relationships and their potential role in adaptation of the warming climate. Using manufacturing plant-level panel production data in India from 1998-2007 and meteorological and pollution sets, his findings indicate that the temperature-output relationship exhibits an inverted V-shape and that the Total Factor Productivity losses can be reduced by investments in machinery and labour reallocation.

 

  • Presenting ‘The Near-miss Effect of Forest Fires: Evidence from Western Australia’, Teresa Gonzalez Valencia from the University of Birmingham provided evidence of a positive and significant near-miss effect of forest fires. Using the hedonic price method (HPM), the before-and-after difference in sales price for properties located in the near-miss area of the Waroona Fire in Western Australia in 2016 were deployed to measure the capitalization of information effects into property prices.

 

  • Professor Ben Groom from the University of Exeter will present his work on ‘The Social Value of Offsets’. The paper provides evidence that the Social Value of Offsets (SVO) multiplied by a correction factor equals the Social Cost of Carbon (SCC) and that the SVO can be positive due to the social value of delaying emissions. The results question the reasonableness of writing-off offset solutions, suggesting that if the SVO of an offset outweighs its costs, it could be part of a net-zero portfolio.