The impact of CO 2 emissions and climate on economic growth and productivity: International evidence

In this study, we apply a detailed country level data in the 1961–2015 period to investigate the relationship between weather variables, CO 2 , share of renewable energy sources, gross domestic product, and total factor productivity in a standard Cobb–Douglas production function by using an instrumental variable approach. Our findings suggest that economic growth has been positively affected by temperature and CO 2 emissions, while climate vulnerability varies significantly between rich‐poor countries. Furthermore, the negative nexus between renewable sources and CO 2 emissions demonstrates its importance for optimal environmental policies design while an inverted U‐shaped relationship for temperature and emissions.