Friday, August 06, 2010

Climate Change and the Spread of Tropcial disease: a fuss about nothing?

There is considerable debate about the impact of climate change on the spread of tropical diseases.

Tropical diseases are typically a list of infectious diseases found in developing countries and includes such hard to spell words as "malaria, schistosomisasis, dengue, trypanosomiasis, leprosy, cholera and leishmaniasis".

Insects usually carry the can for spreading these diseases.

What do these diseases have in common? Whilst the disease itself is happy to spread in any climate the insects tend to like hot countries.

So, the planet warms up, insects can live in hitherto uninhabitable regions and the next thing you know those of us in colder countries (such as the UK) are coming down with some pretty nasty diseases.

The WTO estimate the diseases above cause about 250 million "acute illness" cases and 880,000 deaths a year.

So this is something to worry about right? An increase in the global temperature of 3 degrees will spell economic and social catastrophe right?

Not according to a new paper by Gollin and Zimmerman. Using a heterogeneous agent dynamic general equilibrium model they show there is really not much to be worried about.

I have a feeling some readers remain skeptical. In which case I suggest you read this free to download paper and see for yourself. I like this paper and there is some truth in the conclusion that there will only be modest GDP effects and that improvements in disease prophylaxis will have significant welfare effects.

Meaning, as soon as these diseases start threatening rich people the West will go out and find a cure (throwing lots of R&D money at the problem) thus having large knock on benefits for those in developing countries.

Global Climate Change and the Resurgence of Tropical Disease: An Economic Approach

Douglas Gollin
Yale University

Christian Zimmermann
University of Connecticut; Institute for the Study of Labor (IZA)

July 15, 2010

CESifo Working Paper Series No. 3122

We study the impact of global climate change on the prevalence of tropical diseases using a heterogeneous agent dynamic general equilibrium model. In our framework, households can take actions (e.g., purchasing bednets or other goods) that provide partial protection from disease. However, these actions are costly and households face borrowing constraints. Parameterizing the model, we explore the impact of a worldwide temperature increase of 3°C. We find that the impact on disease prevalence and especially output should be modest and can be mitigated by improvements in protection efficacy.

Keywords: DSGE models, climate change, tropical diseases, incomplete markets

JEL Classifications: E13, E21, I10, O11, Q54
Working Paper Series


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