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Sun Scorch

Aug. 7, 2018

Richmond Fed Report Says Climate Change Could Dampen Economic Growth

The Richmond Fed’s August Economic Brief presents evidence that higher summer temperatures could hurt a variety of business sectors in the United States. This evidence challenges long-standing assumptions that economic damage from climate change would be confined largely to the agricultural sector or to developing nations.

The report highlights research by Toan Phan of the Richmond Fed, Riccardo Colacito of the University of North Carolina, Chapel Hill, and Bridget Hoffmann of the Inter-American Development Bank. By examining changes in temperature by season and across states, they find evidence that higher summer temperatures could reduce overall U.S. economic growth by as much as one-third over the next century, with Southern states accounting for a disproportionate share of that potential reduction.

The Richmond Fed’s Economic Brief series provides web-exclusive essays on current economic issues and trends. Sign up to receive an email notification when a new essay is posted.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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