NCEE Seminar: The Distributional Impacts of Climate Change across US Local Labor Markets

Virtual Seminar
Washington, DC 20460
United States

Contact: Ann Wolverton, 202-566-2278 (wolverton.ann@epa.gov)

Presenters: Emmett Saulnier

Description: 

Climate change has affected households around the globe, but its impacts are not homogenous across space. We show that climate change has thus far disproportionately exposed disadvantaged demographic groups. However, household adaptation also impacts the welfare consequences of this unequal burden. We develop and estimate a new spatial equilibrium model of local labor markets, allowing households to adapt to climate change by choosing their city, energy consumption, and housing characteristics. We then simulate counterfactual climates and decompose the value of each adaptation mechanism. Black households are worse off by 1.5% of income relative to white households due to climate change to date, and we project that gap to grow by an additional 2-7% of income by the end of the century. Additionally, the lowest income decile has welfare effects 19 times larger than the highest income decile. Both the population's ex-ante distribution and differential mobility contribute to the observed disparities.

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