Climate Change and Health: Causal Economic Evidence

Climate Change and Health: Evidence from Causal Economic Studies

Emran Mollah<br>Master Seminar: Health Economics (WS 2025/2026)<br>University of Duisburg-Essen<br>Supervisor: Diem Hoang Xuan

Motivation: A Public Health Crisis

Climate change is an escalating public health concern characterized by rising temperatures and extreme weather events.

Key health domains impacted: Mortality, Mental Health, Infant & Child Health.

While correlations are observed, rigorous causal evidence is essential for effective policy design.

Research Objectives

Areas of Focus

• Temperature & Mortality<br>• Mental Health Outcomes<br>• Early-life Health Effects

Methodological Emphasis

• Identification Strategies<br>• Causal Mechanisms<br>• Adaptation & Institutions

Contribution of the Paper

Synthesizes evidence from causally identified economic studies.

Global coverage includes:<br><b>High-income:</b> USA, Sweden<br><b>Middle-income:</b> Mexico, China<br><b>Low-income:</b> Uganda, Kyrgyz Republic

Identifies critical gaps in long-term and intergenerational effect research.

Methodology

<b>Narrative Literature Review</b> focusing on top-tier economic journals:<br><br>• American Economic Journal<br>• Journal of Health Economics<br>• Review of Economics and Statistics<br><br><b>Inclusion Criteria:</b><br>Studies employing Fixed-effects models, Quasi-experimental designs, or Historical natural experiments.

Measuring Climate Exposure

Economic studies utilize short-run weather variation as exogenous shocks, defined relative to local historical norms.

• <b>Daily/Seasonal Temp:</b> Extreme heat (>85–90°F) & Cold (<25–30°F)<br>• <b>Precipitation:</b> Rainfall shocks, droughts, floods<br><br><i>(Deschênes & Greenstone, 2011; Heutel et al., 2021)</i>

Identification Challenges

Climate exposure is not randomly assigned. Analysis without causal design carries the risk of biased estimates.

• Socioeconomic Confounding<br>• Differences in Healthcare Access<br>• Selective Migration

Identification Strategies

<b>Location & Time Fixed Effects</b><br>Using individual or household panel data to control for unobserved heterogeneity.

<b>Policy Discontinuities</b><br>Example: Coal heating policy in China (Fan et al., 2020).

<b>Historical Cohort Comparisons</b><br>Example: 2,000 years of Chinese elites (Lee & Li, 2021).

Temperature and Mortality

Evidence suggests extreme heat increases mortality non-linearly. Effects are concentrated at very high temperatures. (Deschênes & Greenstone, 2011)

Adaptation and Institutional Capacity

<b>Regional Variation</b><br>Historically warmer regions exhibit lower heat mortality, suggesting acclimatization and behavioral adjustments.<br>(Heutel et al., 2021)

<b>Healthcare Systems</b><br>Stronger public health infrastructure significantly reduces mortality risks from climate shocks.<br>(Cohen & Dechezleprêtre, 2022)

Mental Health Effects

Mental health is a major but often overlooked channel. Higher temperatures are causally linked to worsened psychiatric outcomes.

Infant, Child, and Fetal Health

Early-life exposure is particularly harmful

<b>Rainfall Shocks</b><br>Increase infant mortality (Nyqvist et al., 2025)

<b>Droughts & Floods</b><br>Increase child stunting by 4–7% (Freudenreich et al., 2022)

<b>Extreme Temperatures</b><br>Increase fetal mortality (Hajdu & Hajdu, 2023)

Indirect Channels: Air Pollution

Climate affects health indirectly via pollution. Fan et al. (2020) found coal heating significantly raises PM levels and mortality. Temperature inversions also spike respiratory illness (Jans et al., 2018).

Policy Implications

Invest in Healthcare Infrastructure

Strengthen Adaptive Capacity

Protect Vulnerable Populations

Conclusion & Future Research

Climate change causally affects mortality, mental health, and early-life outcomes. Institutional capacity mitigates these impacts, but adaptation alone is insufficient.

<b>Research Needs:</b><br>• Long-term Effects<br>• Intergenerational Impacts<br>• Low-income Settings