International Review of Environmental and Resource Economics > Vol 19 > Issue 2

Economic Activity and Climate Change

Aránzazu de Juan, Department of Economic Analysis Quantitative Economics, Universidad Autónoma de Madrid, Spain, Pilar Poncela, Department of Economic Analysis Quantitative Economics, Universidad Autónoma de Madrid, Spain, C. Vladimir Rodríguez-Caballero, Department of Statistics, ITAM, Mexico, vladimir.rodriguez@itam.mx , Esther Ruiz, Department of Statistics, Universidad Carlos III de Madrid, Spain
 
Suggested Citation
Aránzazu de Juan, Pilar Poncela, C. Vladimir Rodríguez-Caballero and Esther Ruiz (2025), "Economic Activity and Climate Change", International Review of Environmental and Resource Economics: Vol. 19: No. 2, pp 159-226. http://dx.doi.org/10.1561/101.00000176

Publication Date: 11 Sep 2025
© 2025 A. de Juan et al.
 
Subjects
Econometric models,  Estimation frameworks,  Nonstationary time series,  Panel data,  Time series analysis,  Environmental economics,  Climate change
 
Keywords
JEL Codes: Q51Q54Q56
Catastrophic weatherenergy consumptionenvironmental kuznets curveglobal warminggreenhouse gasestemperature trends
 

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In this article:
1 Introduction 
2 Economic Activity and Energy Consumption 
3 Economic Activity and Pollution 
4 Economic Activity and Climate Change 
5 Economic Effects of Catastrophic Weather Phenomena 
6 Final Conclusions 
References 

Abstract

The links between climate change and economic activity have a critical relevance for the well-being of future generations. Consequently, many publications are devoted to understanding and measuring them. This paper is a comprehensive survey of recent contributions using econometric methods. We update previous surveys focusing on partial aspects of the complex relationships linking the economy and climate change. Starting from economic activity, the channels that relate it to climate change are energy consumption and the consequent pollution. Hence, we first describe the main econometric contributions of the interactions between economic activity and energy consumption, then explain the contributions and interactions of economic activity to pollution. Finally, we look at the main results on the relationship between climate change and economic activity. A necessary consequence of climate change is the increasing occurrence of extreme weather phenomena. Therefore, we also survey contributions on the economic effects of catastrophic climate phenomena.

DOI:10.1561/101.00000176