The Macroeconomic Implications of Climate Change on Sub-Saharan Africa: A Case for Sustainable Development

Abstract

While climate change has harsh universal impacts, it is believed that its negative effects fall disproportionately on hotter, developing regions. This paper examines these claims using a panel datasets for 84 OECD and Sub- Saharan African countries between 1970–2018. I document both the evolution of country-specific temperatures and the long-term economic impact of temperature and precipitation variations on GDP per-capita. Using a panel auto-regressive distributed lag model on the sample mentioned above, I found that temperatures have unanimously increased for all sample-countries and that variations in temperature above historical norms significantly reduced income-growth. No significant relationship was found between precipitation and income growth. When interacting ‘poor’ and ‘hot’ country variables, I found that temperature variations disproportionately affected both hotter and poorer Sub-Saharan African countries. In OECD countries, temperatures have increased more quickly relative to their historical norms than Sub-Saharan African countries. Finally, while poorer and developing countries are more adversely affected by temperature variations, they seem to recover more quickly from temperature shocks than sample averages. I explain these results and link them to potential policy implications regarding global sustainable development and greenhouse gas abatement.