The Costs of Global Warming

In the mail today: This month's copy of American Economic Review. One of the articles that caught my eye was Olivier Deschenes and Michael Greenstone, "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," at pages 354-85. The authors looked at county-level panel data on "whether agricultural profits are higher or lower in years that are warmer and wetter." I'm not qualified to judge their data or methods, but the conclusion looks interesting: "The preferred estimates indicate that climate change will increase annual [agricultural] profits by $1.3 billion in 2002 dollars . . . or 4 percent. This estimate is robust to numerous specification checks and relatively precise, so large negative or positive effects are unlikely."