Abstract

As recent literature has shown climate change impacts result in negative consequences for regional economies. In this study, we test this conclusion for the region of Atlantic Canada. In order to do and present our case study research, we designed economic and statistical models to describe the relationship between economic performance measure, which is regional value added, and two sets of control variables - economic and climate. Statistical model represents a linear multiple regression set in terms of panel data for five regional transportation hubs with autoregressive term for our dependent variable and two sets of control variables. The results obtained from the model estimation show statistically significant negative effect of rising temperature on regional value added: an increase in annual temperature by one degree Celsius causes a decrease in regional value added by 1.74%. In addition, the rise of the sea level by one meter would reduce regional value added by approximately 10% implying that coastal sub-region in Atlantic Canada is highly vulnerable to climate change impacts.