Temperature and Exports– Evidence from the United States

Abstract

IPCC estimates anthropogenic global warming to have reached 1◦C com-pared to pre-industrial levels. This study evaluates the relationship of tem-perature fluctuations and exports, using high-resolution panel data of daily weather and monthly exports in U.S. states. I find significantly negative effects of both low and high temperatures, where one additional day with temperatures below -10◦C and above 25◦C reduces U.S. exports by 0.22%and 0.24%, respectively. The optimal daily average temperature for exports is estimated to approximately 10◦C. These new findings contradict previous research on temperature and exports, which has not found significant effects in rich countries. Under a ’business as usual’ scenario with a continued rise in CO2 emissions, I project an average reduction in U.S. exports by 12.7%at the end of this century. My result implies stronger economic incentives for rich countries similar to the United States to invest in climate change mitigation, and to plan for future adaptation against a warming climate.