{"685736":{"#nid":"685736","#data":{"type":"news","title":"Researchers More Accurately Estimate Economic Impacts of Climate Change","body":[{"value":"\u003Cp\u003EPoorer countries tend to grow faster than richer ones. But this tendency, called convergence, is often overlooked when forecasting the economic impacts of climate change.\u003C\/p\u003E\u003Cp\u003E\u003Ca href=\u0022https:\/\/doi.org\/10.1016\/j.eneco.2025.108705\u0022 rel=\u0022noopener\u0022 target=\u0022_blank\u0022 title=\u0022(opens in a new window)\u0022\u003EA new study\u003C\/a\u003E from Georgia Tech\u2019s \u003Ca href=\u0022https:\/\/spp.gatech.edu\/\u0022 rel=\u0022noopener\u0022 target=\u0022_blank\u0022 title=\u0022(opens in a new window)\u0022\u003EJimmy and Rosalynn Carter School of Public Policy\u003C\/a\u003E finds that incorporating convergence into empirical (data and observation-based) climate models drastically reduces estimated global income loss and inequality from climate change by 2100.\u003C\/p\u003E\u003Cp\u003E\u201cVery few, if any, explicitly include this convergence effect,\u201d said \u003Ca href=\u0022https:\/\/spp.gatech.edu\/people\/person\/tony-harding\u0022 rel=\u0022noopener\u0022 target=\u0022_blank\u0022 title=\u0022(opens in a new window)\u0022\u003EAnthony Harding,\u003C\/a\u003E an assistant professor in the Carter School and author on the paper. \u201cBut it makes a huge difference.\u201d\u003Cbr\u003E\u0026nbsp;\u003C\/p\u003E\u003Ch2\u003E\u003Cstrong\u003EMain Findings\u003C\/strong\u003E\u003C\/h2\u003E\u003Cp\u003EThe study was published in \u003Cem\u003EEnergy Economics\u003C\/em\u003E by Harding and co-authors Juan Moreno-Cruz, Martin Quaas, Wilfried Rickels, and Sjak Smulders.\u003C\/p\u003E\u003Cp\u003EThe researchers find that empirical models ignoring convergence can calculate average global income losses of up to 19% by the end of the century in one study, while allowing for convergence reduces these losses to around 8.5%.\u003C\/p\u003E\u003Cp\u003EAdditionally, including convergence spreads the damage more evenly across all countries, resulting in more moderate estimated increases in global income inequality \u2014 around 8% by 2100 rather than the up to 118% increase that another empirical model suggested. \u0026nbsp;\u003C\/p\u003E\u003Cp\u003EFinally, accounting for convergence also predicts economic impacts from climate change that are more in line with what we expect: the more temperatures increase, the more economic damage is done. Without convergence, empirical models can predict exponential benefits for \u201cwinning\u201d countries (such as large northern nations like Canada and Russia) that eventually outpace the losses to losing countries (which can only go to zero), causing it to look like climate change has a net economic benefit in the long run (it doesn\u2019t). \u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u201cThis model consistently pushes countries back together in a way, so you don\u2019t get that counterintuitive result,\u201d Harding said. \u201cIncluding convergence moderates the effects of climate change relative to models without convergence, but they are still large and require immediate action to address.\u201d\u003Cbr\u003E\u0026nbsp;\u003C\/p\u003E\u003Ch2\u003E\u003Cstrong\u003EWhy Isn\u2019t Convergence Always Accounted For?\u003C\/strong\u003E\u003C\/h2\u003E\u003Cp\u003EConvergence is an economic theory, while empirical models are based on observable past data.\u202fThis data is the only way we can forecast future trends, such as the economic impacts of climate change, but using the data alone is not enough. \u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u201cWhen we use data to estimate a historical relationship between temperature and economic growth, we find evidence of convergence, but it doesn\u2019t directly affect that estimated climate-economy relationship\u201d Harding explained. \u201cSo, if you\u2019re building a model about what predicts the relationship between temperature and economic growth, you wouldn\u2019t think to include convergence because it doesn\u2019t show up as meaningful in that backward-looking model.\u201d \u0026nbsp;\u003C\/p\u003E\u003Cp\u003EHowever, it matters when projecting the effects of climate change in the future because convergence changes the persistence of climate change impacts. When temperatures increase, economic growth slows. But when growth slows, convergence offsets that, increasing growth and recovering some of those economic losses. Without convergence, those economic losses are never recovered.\u003C\/p\u003E\u003Cp\u003EWhen Harding and his colleagues incorporate convergence into the empirical model, they obtain results that are much closer to those from the more widely used theory-based integrated assessment models, thus calibrating the empirical model and pinpointing the discrepancy between the two.\u003Cbr\u003E\u0026nbsp;\u003C\/p\u003E\u003Ch2\u003E\u003Cstrong\u003EPolicy Impacts\u003C\/strong\u003E\u003C\/h2\u003E\u003Cp\u003EHarding and his team are working on a second paper using this model to calculate the value of carbon sequestration. Right now, there are many different ways to predict the economic costs and benefits of capturing and storing carbon out of the air. The results range from a negative economic benefit up to a thousand dollars per ton of carbon, Harding said, which is a \u201cmassive, massive spread.\u201d \u0026nbsp;\u003C\/p\u003E\u003Cp\u003EBut having an accurate number is critical for policymakers determining the economic value of conservation efforts like forest protection and reforestation efforts, which naturally sequester carbon. As organizations and governments choose and build these models, Harding\u2019s work shows how important considering convergence is.\u003C\/p\u003E\u003Cp\u003E\u003Cem\u003E\u201cDistribution of climate damages in convergence-consistent growth projections\u201d was published in \u003C\/em\u003EEnergy Economics.\u003Cem\u003E It is available at \u003C\/em\u003E\u003Ca href=\u0022https:\/\/doi.org\/10.1016\/j.eneco.2025.108705\u0022 rel=\u0022noopener\u0022 target=\u0022_blank\u0022 title=\u0022(opens in a new window)\u0022\u003E\u003Cem\u003Ehttps:\/\/doi.org\/10.1016\/j.eneco.2025.108705\u003C\/em\u003E\u003C\/a\u003E.\u003C\/p\u003E","summary":"","format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003EA new study from Georgia Tech\u2019s Jimmy and Rosalynn Carter School of Public Policy finds that incorporating convergence into empirical (data and observation-based) climate models drastically reduces estimated global income loss and inequality from climate change by 2100.\u003C\/p\u003E","format":"limited_html"}],"field_summary_sentence":[{"value":"A new study from Georgia Tech\u2019s Jimmy and Rosalynn Carter School of Public Policy finds that incorporating convergence into empirical climate models drastically reduces estimated global income loss and inequality from climate change by 2100. "}],"uid":"35766","created_gmt":"2025-10-16 14:20:01","changed_gmt":"2025-10-16 14:22:10","author":"dminardi3","boilerplate_text":"","field_publication":"","field_article_url":"","location":"Atlanta, GA","dateline":{"date":"2025-10-16T00:00:00-04:00","iso_date":"2025-10-16T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"678363":{"id":"678363","type":"image","title":"MERCURY.jpg","body":null,"created":"1760624455","gmt_created":"2025-10-16 14:20:55","changed":"1760624455","gmt_changed":"2025-10-16 14:20:55","alt":"Aerial view of flooding in neighborhood","file":{"fid":"262381","name":"MERCURY.jpg","image_path":"\/sites\/default\/files\/2025\/10\/16\/MERCURY.jpg","image_full_path":"http:\/\/hg.gatech.edu\/\/sites\/default\/files\/2025\/10\/16\/MERCURY.jpg","mime":"image\/jpeg","size":2077730,"path_740":"http:\/\/hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/2025\/10\/16\/MERCURY.jpg?itok=pJfEljcc"}}},"media_ids":["678363"],"groups":[{"id":"1281","name":"Ivan Allen College of Liberal Arts"},{"id":"1289","name":"School of Public Policy"}],"categories":[{"id":"154","name":"Environment"}],"keywords":[{"id":"187915","name":"go-researchnews"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003E\u003Ca href=\u0022mailto:dminardi3@gatech.edu\u0022\u003EDi Minardi\u003C\/a\u003E\u0026nbsp;\u003C\/p\u003E\u003Cp\u003EIvan Allen College of Liberal Arts\u003C\/p\u003E","format":"limited_html"}],"email":["dminardi3@gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}