Assessing the economic damages of climate change: the role of investment versus consumption

To calculate the damages climate change will cause in the economy, it is important to differentiate consumption from investment. Gregory Casey, Stephie Fried, and Matthew Gibson write that without that distinction, existing methods downplay the effect of climate change on capital accumulation and economic growth. Their research shows that climate change will have a significant impact on aggregate economic outcomes in developed economies and that these impacts will be closely tied to the construction sector.