Extreme heat is becoming a labor-market risk, but its distribution across workers remains insufficiently understood. This study examines whether recent wet-bulb globe temperature (WBGT) exposure is associated with an annual-income-based hourly earnings proxy and whether this association differs between rural and urban workers in China. We link 726,480 person-wave observations from the China Family Panel Studies (2010-2022) to prefecture-level (European Centre for Medium-Range Weather Forecasts Reanalysis v5) ERA5-derived WBGT and estimate high-dimensional fixed-effects models with mutually exclusive thermal bins. The results show a monotonic heat-earnings gradient: one additional WBGT >33 degrees C day is associated with a -0.074 log-point coefficient among rural agricultural workers and -0.031 among urban workers. Heterogeneity and descriptive accounting analyses show that vulnerability clusters around outdoor work, low income, limited cooling access, and occupational heat intensity. Coupled Model Intercomparison Project Phase 6 (CMIP6) scenario calculations indicate that, under current adaptation assumptions, rural-urban earnings vulnerability may widen in high-emissions futures. The paper contributes an adaptive inequality framework that separates biophysical work-capacity constraints from labor-market realization and treats hourly earnings as an earnings-based proxy rather than direct physical productivity.
Developing countries face severe disasters related to climate change, leading to increased government expenditure and higher budgetary deficits. The present research, considering India as a case study, answers the following questions: Does climate change affect fiscal deficit management? Does the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 reduce the fiscal deficit? How do flood events affect fiscal imbalances in Indian states through changes in revenue mobilization, expenditure commitments, and fiscal deficits? The analysis is carried out by considering state-level data from 1990 to 2020 and estimating Feasible Generalized Least Squares (FGLS) regression models. Climate change is measured by seven variables related to damage from severe floods, and five key fiscal indicators measure state-level fiscal imbalances. The results suggest that flood-related damages intensify fiscal imbalances by weakening own tax revenue (OTR) and increasing Capital Expenditure (CE) and Social Sector Expenditure (SSE), and thereby widening Gross Fiscal Deficits (GFD), while the effects on own nontax revenue (ONTR) are limited. The implementation of the FRBM Act is associated with higher CE, SSE, and ONTR, while its effects on OTR and GFD are less consistent. Finally, the study suggests several essential policies to combat the fiscal imbalances in India in light of climate change. This lesson can help many other developing countries cope with similar problems.
This study examines the long-term effects of monsoonal climate variations on tea net revenue, a key perennial crop in many developing countries. Using panel data from 49 tea estates across all tea-growing regions in Sri Lanka over 15 years, a two-way fixed-effects panel Ricardian model was estimated to capture the impact of seasonal temperature and rainfall variations on net revenue. Results reveal heterogeneous climate effects across regions and seasons. Rising temperatures significantly reduce tea estate net revenue, particularly in the up-country and mid-country regions, where the strongest adverse effects occur during the Northeast Monsoon and Southwest Monsoon seasons. The largest estimated temperature effect indicates that a 1 degrees C increase in Southwest Monsoon temperature reduces net revenue by 14.50% in the up-country region. Temperature exerts a stronger influence on tea estate profitability than rainfall, particularly in higher-elevation estates. Projections indicate distinct seasonal and elevation-specific variability in future climate impacts, with projected net revenue losses becoming more pronounced over time and reaching approximately 25.00% under medium-term climate scenarios. The findings highlight substantial regional differences in climate sensitivity and future climate impacts, emphasizing the importance of region-specific adaptation strategies to enhance climate resilience in tea production.
This paper begins with an assumed nonlinear effect of climate on an economic outcome and then derives the resulting short-run and long-run behavior to changes in weather. The short-run annual effects are a function of intertemporal weather deviations and the interaction between weather deviations and the long-run marginal effect of climate. One can identify the underlying nonlinear climate effects with these interaction terms. We illustrate these principles by showing how both weather and climate affect annual GDP per capita in a panel of countries. GDP is generally more sensitive to short-run changes in temperature than long-run changes. A long-run [Formula: see text]C warming has a negligible effect on GDP per capita overall, but it will cause losses in the hottest countries of −1% to −1.5% per ∘ C. Precipitation also has a very small effect on GDP per capita. These estimates just reflect the direct effect of temperature and precipitation on the economy and do not reflect nonmarket damages and damages caused by sea level rise and storms.
This paper provides fresh empirical evidence on households' climate change adaptation in Niger, a drought-prone country characterized by an adaptation deficit. It assessed the main drivers and welfare impacts of food storage, migration, and crop diversification, identified as part of the households' primary adaptation strategies. We composed a longitudinal dataset from the two cohorts of the harmonized survey on the households' living conditions (EHCVM) secondary data collected by the National Institute of Statistics of Niger, supported by the World Bank and the WAEMU commission. A Seemingly Unrelated Regression (SUR) model was used to assess the drivers of adaptation, while a quintile regression model was employed to evaluate the welfare effects of climate change adaptation.Our results show that adaptation is highly incentivized by a drier climate, where households rely on various techniques to smooth income and stabilize household calorie intake throughout the lean period. It is, however, weakly spurred by wetter climate and seasonal market fluctuations, although the welfare impact is still positive. These impacts are heterogeneous and pro-poor, although used by well-endowed households to improve their life opportunities. Adaptation remains largely autonomous and lacks policy support mechanisms from the government. We find that migration is an out-of-distress adaptation technique and has no welfare effects on the household's annual consumption and household calorie intake.Development efforts through the national adaptation programs should leverage and mainstream these adaptation options to alleviate rural vulnerability to multiple shocks. The government should institute interventions that build and sustain household assets to avoid distress migration. That consists of developing income-generating activities and safety nets in rural areas to create life opportunities and improve households' livelihood portfolios.
