The economic costs of climate change in mena countries a micro spatial analysis
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The Economic Costs of Climate Change in MENA Countries: A Micro-Spatial Analysis. FEMISE Team: Prof. Nicolas Péridy ( Université du Sud Toulon- Var , LEAD, France) Prof. Ahmed Ghoneim (Cairo University,Egypt )

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The Economic Costs of Climate Change in MENA Countries: A Micro-Spatial Analysis

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The economic costs of climate change in mena countries a micro spatial analysis

The Economic Costs of Climate Change in MENA Countries:A Micro-Spatial Analysis

FEMISE Team:

Prof. Nicolas Péridy (Université du Sud Toulon-Var, LEAD, France)

Prof. Ahmed Ghoneim (Cairo University,Egypt)

Research Assistants: Dr. Marc Brunetto and Dr. Mohamed Hazem (Université du Sud)

FEMISE Program FEM34-03

Femise AnnualConference

Marseille 15-16 December 2011


1a motivation

1a. Motivation

  • Climate change:

    • major issue for the world population and thus policy makers. Estimation of global warming: from 1.0°C to 4.5°C by the end of this century (IPPC (2007)).

    • The last forecasts (PNUE, 2011) are even more alarmists: from 2.5°C to 6.0°C.

  • Questions about the economic impact of climate change

    • New literature (Stern, 2008, Dell and al., 2009, Pindyck, 2010)

    • New data bases at micro-spatial level (TATP, 2009 and G-Econ 2009)

  • MENA countries are particularly concerned with CC


2a stylized facts temperature moving av

2a. Stylized facts: Temperature (moving av.)

Algeria

Egypt


2b stylized facts precipitations mm per year

2b. Stylized facts: Precipitations (mm per year)


3 main questions to be addressed

3. Main questions to be addressed

  • Is there any evidence of climate change over the past decades in MENA countries, notably in terms of temperature and rainfall?

  • What is the impact of a rise in temperature and a decrease in precipitation on income and growth in these countries?

  • Which policies can be implemented in order to adapt to global warming?


4a methodology a micro spatial analysis

4a. Methodology: a micro-spatial analysis

  • The use of micro-spatial databases:

    • Terrestrial Air Temperature and Precipitation (Matsuura and Willmott 2009); 808 geographical cells for MENA countries for the time period 1900-2088 (88,072 observ.)

    • G-Econ (Yale University): Gross cell product (GCP) is measured at a 1-degree longitude by 1-degree latitude resolution

  • Highlighting statistical evidence of climate change in MENA countries:

    • Regression of temperature and precipitations on time

    • Identification of structural changes (Chow and Cusum tests)

    • Calculating changes in temperature and precipitations before and after the structural change


4b methodology a micro spatial analysis

4b. Methodology: a micro-spatial analysis

  • Testing the impact of climate change on the real economy:

    • On micro-spatial GDP and GDP per capita

    • With spatial conditional convergence models: Barroregression (Mankiw et al., 1992; Ramajo et al., 2008)

    • With an extended model at country level which accounts for other control variables (education, innovation, infrastructure, openness, etc…)


4c methodology a micro spatial analysis

4c. Methodology: a micro-spatial analysis

  • Using spatial econometrics

    • Test of the spatial autocorrelation of the residuals (Moran-I-test)

    • Estimating:

      • spatial lagmodels: Y=rWy+Xb+e

      • spatial model with autocorrelated residuals: Y=bX+e

        Avec e=lWe+u


5a results global warming temperatures

5a. Results: Global Warming (temperatures)

  • Table 1: Estimation of structural change


5b results global warming temperatures

5b. Results: Global Warming (temperatures)

  • Table 2: Global warming in MENA countries (°C)


5c results global warming temperatures

5c. Results: Global Warming (temperatures)

  • Figure 1: Global warming at micro-spatial level


5d results climate change precipitations

5d. Results: Climate change (precipitations)

  • Table 3: Estimation results for the whole period at country level (1900-2008)


5c results climate change precipitations

5c. Results: Climate change (precipitations)

  • Figure 1: changes in precipitations at micro-spatial level


6a impact on gdp and gdp per capita spatial lag model

6a. Impact on GDP and GDP per capita (spatial lag model)

  • Impact on GDP

  • Impact of GDP per capita


6b results of the conditional convergence model spatial lag model

6b. Results of the conditional convergence model (spatial lag model)


7 conclusion

7. conclusion

  • MENA countries have all experiencedsignificantclimate change, which has accelerated in the pastdecade

  • Comparedwithother countries, global warming in MENA countries is comparable to thatobservedat world level BUT with a significantdecrease in rainfalls.

  • There issomeevidence of a negative impact of global warming on GDP and GDP per capita to a lesser impact (1°C => -8.5% GDP per capita)

  • This raises the question about the role of policies:

    • To preventadditionalclimate change

    • To adapt to these changes


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