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World GDP was roughly $3.5 trillion (in today’s dollars, Maddison’s data is 1990 dollars) when global warming “started.”

World GDP is on the order of $80 trillion today.

CO2 concentrations were roughly 280 ppm at the “start” of global warming.

CO2 concentrations are roughly 400 ppm today.

What is the CO2 elasticity of “demand” with respect to GDP?

We simply compute the percentage change in CO2 concentrations divided by the percentage change on GDP.

CO2 concentrations have increased by 43%.

GDP has increased by about 2100%

Thus, the CO2 elasticity with respect to GDP is 0.02.

More to come … but I don’t think people think that is the “real” elasticity …

One Response to “Economic Climate Sensitivity”

  1. Trapper_John says:

    Interesting starting point. As an armchair economist, I’m guessing that the more important question going forward is the impact at the margin: how much CO2 is associated with the next incremental $ of GDP? I’d also guess that this is different for different countries. In the US, our emissions are falling (thanks, fracking!) while GDP grows, but I’d guess that increased GDP in China, India, or Uganda would come with increased emissions.

    This is also interesting in terms of additional warming (ostensibly what we care about). The physics of CO2 as a greenhouse gas are such that each ppm generates less warming than the one previous to it (absent positive feedbacks). Thus marginal sensitivity should be less than historically observed sensitivity, yes? Seems like this creates opportunity to easily cherry-pick numbers that fit a narrative.

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