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Carbon-sensitive productivity, climate and institutions

Published online by Cambridge University Press:  13 February 2015

Surender Kumar  and
Shunsuke Managi
Surender Kumar
Affiliation:
Department of Business Economics, University of Delhi, Delhi, India. E-mail: [email protected]
Shunsuke Managi
Affiliation:
Departments of Urban and Environmental Engineering, Global Environmental Engineering Program, School of Engineering, Kyushu University, 744 Motooka Nishi-ku Fukuoka, 819-0395, Japan; and QUT Business School, Queensland University of Technology, Brisbane, Australia. Tel: 81-92-802-3366, Fax: 81-22-795-4309. E-mail: [email protected]
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Abstract

Climate and institutions might be crucial in lowering the vagaries of climate change impacts in terms of productivity. This study measures the relationships of productivity measures adjusted for the regulation of carbon emission and institutions together with climate change throughout the world. This paper finds that there is higher potential for reduction of CO2 emissions in developing countries at lower cost. However, the cost to reduce emissions lowers their growth potential in terms of lost productivity growth. Better institutions help to lower the negative impacts of climate change by improving the process of technological adoption in developing countries. Climate change reduces the productivity growth in developing countries by lowering the process of technological adoption, and better institutions result in higher productivity.

Type
Research Article
Information
Environment and Development Economics , Volume 21 , Issue 1 , February 2016 , pp. 109 - 133
Copyright
Copyright © Cambridge University Press 2015 

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