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Working Paper
Climate Shocks in the Anthropocene Era: Should Net Domestic Product Be Affected by Climate Disasters
The monetary costs of weather and climate disasters in the U.S. have grown rapidly from 1980 to 2022, rising more than 5 percent in real terms annually. Much of this real growth in costs is likely due to climate change. Regardless of its cause, these costs imply a faster depreciation of real assets. We argue that the expected depreciation from these events could be included in the consumption of fixed capital, leading to lower levels, and slightly lower growth rates, for net domestic product (NDP). We use Poisson pseudo-maximum-likelihood regressions to estimate this expectation and to ...
Journal Article
Community Effects of Climate Change in North Carolina
According to a 2021 report by the World Meteorological Organization, hurricanes, floods, heat waves, and droughts have increased in frequency and intensity around the world, accounting for 2 million deaths and $3.64 trillion in losses globally between 1970 and 2019. In the mid-Atlantic region, these events typically result in river and coastal flooding; several recent examples have devastated communities.
Working Paper
Adaptation and the Cost of Rising Temperature for the U.S. economy
How costly will rising temperature due to climate change be for the U.S. economy? Recent research has used the well-identified response of output to weather to estimate this cost. But agents may adapt to the new climate. We propose a methodology to infer adaptation technology from the heterogeneous responses of output to weather observed currently across the U.S. Our model estimates how much each region has adapted already, and can predict how much each will adapt further after climate change. The size and distribution of losses from climate change vary substantially once adaptation is taken ...
Working Paper
How Climate Change Shapes Bank Lending: Evidence from Portfolio Reallocation
I document how bank lending has changed in response to climate change by analyzing changes in bank loan portfolios since 2012. Using supervisory data providing loan-level portfolios of the largest U.S. banks, I find that banks significantly reduced lending to areas more impacted by climate change starting around 2015. Using flood risk and wildfire risk as proxies for climate risk, I estimate a one standard deviation increase in climate risk reduces county-level balances in banks’ portfolios by up to 4.7 percent between 2014 and 2020 in counties with large loan balances. The aggregate trend ...
Journal Article
Drought Risk to the Agriculture Sector
Drought is a perennial and long-term risk that can negatively affect the farm economy through lower yields, loss of crops, reduced farm revenues, and lower sales for farm suppliers. As risks from climate change mount, understanding how drought will affect farmers across the country has become even more important. Drought risk can vary by region, crop type, and production method, and may disproportionately affect some farmers more than others. Although many farmers have crop insurance to protect against losses, insurance does not cover all of their crop’s value, and even insured farmers face ...