Faculty of Science, Technology and Medicine
Faculty of Law, Economics and Finance
Faculty of Humanities, Education and Social Sciences
Interdisciplinary Centre for Security, Reliability and Trust
Luxembourg Centre for Systems Biomedicine
Luxembourg Centre for Contemporary and Digital History
Luxembourg Centre for European Law
Luxembourg Centre for Socio-Environmental Systems
Lakes and Economic Development: Evidence from the Permanent Shrinking of Lake Chad
Abstract
There is a limited understanding of the role lakes play in economic development, despite lakeshore communities representing 40% of the global population. This knowledge gap is critical as numerous lakes worldwide are shrinking due to climate change. To shed light on the future economic effects of climate change through the global lake recession phenomenon that it engenders, we focus on Lake Chad, which used to be the 11th-largest lake in the world. This lake, which was the size of El Salvador, Israel plus the West Bank and Gaza, or Massachusetts, shrunk by 90% for exogenous reasons between 1963 and 1990, providing a historical example of the lake recession phenomenon. The water supply decreased and the land supply increased, generating ambiguous effects. We construct a novel data set tracking population patterns at a fine spatial level from the 1940s to the 2010s for Cameroon, Chad, Nigeria, and Niger — home to 25% of Africa’s population –. Difference-in-differences specifications show much slower growth close to the lake after it started shrinking. These effects persisted two decades after it stopped shrinking, implying limited adaptation. The negative water supply effects on fishing, herding, and farming outweighed the growth in land supply and other positive effects. These results are substantiated using historical data on local economic development, environmental change, infrastructure, and conflict. Given the limitations of reduced-form specifications, we develop a dynamic quantitative spatial model and find aggregate losses of 2.7%, which increases to 10% in Lake Chad areas. The model allows us to study non-local effects, further examine mechanisms, study the role of aggravating and mitigating forces, and quantify the effects of policy proposals aimed at replenishing Lake Chad.
About the speaker
Remi Jedwab is a professor of Economics and International Affairs at the Elliott School and the Department of Economics of George Washington University, the Director of the Institute for International Economic Policy, the Director of the ESIA Initiative on Climate Change and Sustainable Cities, and the co-Director of the Local Sustainable Governance Lab at George Washington University, and an Affiliated Scholar of the Marron Institute of Urban Management at New York University. Professor Jedwab’s main fields of research are urban, regional and real estate economics, development and growth, environmental economics, and applied micro. Some of the issues he has studied include the economics of cities, urbanization and structural transformation, the economic determinants and effects of vertical urban development, construction and climate change, population growth, sustainable development, the determinants and effects of transportation infrastructure, and the roles of institutions, history, human capital and technology in development and growth. He is the co-founder and co-organizer of the World Bank-GWU-IGC Urbanization and Poverty Reduction Conference, the World Bank-GWU-UVA Conference on The Economics of Sustainable Development, the World Bank-GWU Sustainable Cities workshop series, and the Washington Area Development Economics Symposium. He is also a co-editor of the World Bank Economic Review and an associate editor at the Journal of Urban Economics and Regional Science and Urban Economics.
Language
English
This is a free Seminar. Registration is mandatory.
Supported by the Luxembourg National
Research Fund (FNR) 19441346