Approximations in elasticity based on the concept of function space

Abstract

COUNTRY-SPECIFICMARKET IMPACTS OF CLIMATE CHANGE ROBERT MENDELSOHN1, WENDY MORRISON2, MICHAEL E. SCHLESINGER3 and NATALIA G. ANDRONOVA3 1Yale FES, 360 Prospect St., New Haven, CT 06511, U.S.A. E-mail: robert.mendelsohn@yale.edu 2Middlebury College, Middlebury, VT, U.S.A. E-mail: wnmorrison@alltel.net 3University of Illinois at Urbana-Champaign, 105 South Gregory Avenue, Urbana, IL 61801, U.S.A. E-mail: schlesin@uiatma.atmos.edu Abstract. We develop a new climate-impact model, the Global Impact Model (GIM), which combines future scenarios, detailed spatial simulations by general circulation models (GCMs), sectoral features, climate-response functions, and adaptation to generate country-specific impacts by market sector. Estimates are made for three future scenarios, two GCMs, and two climate-response functions – a reduced-form model and a cross-sectional model. Combining empirically based response functions, sectoral data by country, and careful climate forecasts gives analysts a more powerful tool for estimating market impacts. GIM predicts that country specific results vary, implying that research in this area is likely to be policy-relevant.