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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

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
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
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