Dissertation Defense: "Essays on Adaptation to Climate Change", Alexander Abajian

Speaker

Alexander Abajian, University of California, Santa Barbara

Biography

Alexander (Xander) Abajian is a Ph.D. candidate in Economics at the University of California, Santa Barbara. His research broadly focuses on the intersection of environmental and macroeconomics, with a primary interest in how climate change affects the global distribution of people and economic activity. His job market paper examines this issue through the lens of a global incomplete markets framework that nests a dynamic discrete choice model over where people choose to live.

Xander holds a Bachelor’s degree in Economics and Physics from Brandeis University in Waltham, MA. Prior to entering graduate school he served as a research economist at the Council of Economic Advisers between 2017 and 2019 where he helped analyze federal trade and environmental policy. During his graduate studies he served as the TA for the graduate macroeconomics sequence and as a research assistant for Professors Kyle Meng and Kelsey Jack.

Title

“Essays on Adaptation to Climate Change”

Abstract

This thesis examines adaptation to climate change at aggregate spatial scales over long time horizons. The central chapter introduces a multi-region general equilibrium with incomplete markets model that allows for both savings and migration as adaptation to climate change. It serves as a bridge between two existing paradigms that are complementary in that they model either savings or migration as adaptation mechanisms in isolation. My calibrated model predicts that 6 percent of the global population will migrate internationally because of climate change by the end of the 21st century. Welfare effects from climate change are highly unequal; warming under RCP4.5 raises the wealthiest agents' welfare by 4.0 percent, while the poorest agents in low-income countries experiences losses of 8.5 percent.

The second chapter, joint work with Professors Tamma Carleton, Kyle Meng, and Olivier Deschênes, considers how reactions to climate change that are energy intensive may themselves affect the climate. The energy-intensive nature of existing margins of adapting to climate change (e.g., air conditioning) has raised concerns that adaptation itself may cause additional warming. The sign and magnitude of this feedback will in practice depend on how increased emissions from cooling balance against reduced emissions from heating across space and time. We show that that energy-based adaptation to climate change, if in-line with historical responses to weather shocks, will lower global mean surface temperature in 2099 by 0.07 to 0.12 degree Celsius relative to baseline projections. While business-as-usual adaptive energy use is unlikely to accelerate warming, it raises important implications for countries' existing mitigation commitments.

The final chapter is preliminary work establish the causal effects of climate change on agricultural productivity globally and examine the implications for structural change. In principle, it replicates prior exercises in the climate macroeconomics literature with a focus on agriculture as an explicit mechanism. The current draft focuses on how climate change will affect global factor allocation through the channel of lowering agricultural TFP growth. I show evidence from time series data suggesting a marginal increase in global mean surface temperatures by 1 degree Celsius from current levels will lower agricultural productivity growth by 11.5 percentage points. This warming would offset over a decade's worth of growth at historical rates globally, and nearly three decade's worth of growth in low-income countries.

JEL Codes: O13, F22, R23, D52, J61, Q54