Climate change has been characterised as the central public policy issue of our time. Yet our understanding of the economic impacts of a warming planet remains lamentably inadequate. Responding to these knowledge gaps presents an urgent challenge for academia and policy. Concerns are regularly expressed about the potential for climate change to undermine progress towards economic development. Moreover, rapid and large-scale development trends are fundamentally changing global and local vulnerability to climate risk. A first-order question in evaluating the economic impacts of a changing climate is how exactly does geography interact with and shape patterns of economic development? A second set of questions relate to how patterns of economic and spatial development – including patterns of urban development – affect the vulnerability to, and ultimately the economic costs of, climate change?
This project will investigate how climate risk (including variability and extremes) affects economic development by matching detailed weather data with local measures of economic outcomes, including household survey data, to test the idea of a climate-related poverty trap. The project will also enhance our understanding of how economic actors adjust to changing climate risk, with an emphasis on movement across space and investment in property, including testing the role of climate in migration decisions and the effect of changing risk profiles, for example as a result of rising sea levels, on property values. Outputs from the project will have lasting impact on the direction of research in development and climate economics. At a practical level, the project will provide much-needed evidence on a range of important but to date poorly understood climate impacts. This work will have direct impact on international climate policy by informing estimates of the costs of future climate change, and by providing decision relevant evidence for adaptation policies, infrastructure investments and spatial and urban planning.