Essays in climate and development

Abstract

This dissertation is a collection of three essays on environmental policy and empirical development economics, unified in their underlying inquiry of the welfare effects of climate in Mexico. The first chapter presents evidence on the relationship between exposure to extreme temperatures and precipitation and mortality, as well as the relationship between severe weather and agricultural income and crop production in the country, using random year-to-year variation in temperature. Estimates suggest that exchanging one single day with an average temperature for one day with extreme temperature increases the crude mortality rate by 0.15%. The impact is spatially and temporally heterogeneous: the extreme heat effect on death is three times larger in rural areas than in urban areas, while its effect on agriculture is significantly larger if it takes place during the agricultural growing season. The second essay is an analysis of the impact of future climate change on death in Mexico. Estimates suggest that in the absence of any future effective mitigation or technology adaptation, climate change leads to a 4 to 9% increase in the annual mortality rate during the 21" century. I show that climate change disproportionately affects vulnerable groups, particularly children and rural households, whose mortality rates are estimated to increase by 19% and 40% respectively. Overall, by the end of the century climate change will lead to a loss of more than 3.1 million life-years per annum (equivalent to one life-year lost every ten seconds.) The third essay makes the case for the effectiveness of targeted government interventions to mitigate the negative impact of weather-induced income shocks. I show that El Nifno- and La Nifia-related severe meteorological conditions lead to sharp declines in consumption and welfare outcomes, particularly among the poor, and more specifically in female-headed and indigenous households. Estimates suggest that the provision of a safety net significantly raises expected utility by smoothing consumption and reducing inefficient behaviors ex post.