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Climate Change and Common SenseEssays in Honour of Tom Schelling$
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Robert W. Hahn and Alistair Ulph

Print publication date: 2012

Print ISBN-13: 9780199692873

Published to Oxford Scholarship Online: May 2012

DOI: 10.1093/acprof:oso/9780199692873.001.0001

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Schelling's Conjecture on Climate and Development: A Test

Schelling's Conjecture on Climate and Development: A Test

Chapter:
(p.260) 14 Schelling's Conjecture on Climate and Development: A Test
Source:
Climate Change and Common Sense
Author(s):

David Anthoff

Richard S.J. Tol

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199692873.003.0014

We use the integrated assessment model FUND to compute the income elasticities of climate change impacts for different world regions over time. We find limited support for Schelling's Conjecture that development might be the best defence against climate change impacts, and for the idea that the impacts from climate change might be akin to a ‘luxury good’. For very poor regions, an increase in income in the short run is an effective tool to reduce impacts from climate change by making those societies less vulnerable, in particular to infectious diseases. While net climate impacts appear to be akin to a luxury good for some countries at specific times, that effect disappears in the long run as impacts from agriculture make up a large share of total impacts.

Keywords:   climate change, economic development, income elasticity

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