On the Economics of Happiness and Climate Change

Abstract

The present study bridges the field of happiness economics with the economics of climate change, based on two research questions. One is related to the effects of (extreme) climate events on individual happiness and their qualitative measurement. The empirical method to analyze this relation includes the identification of proxies of extreme climate events and studying their relationships with well-being for the impacted population. Here floods, and to some extent forest fires, are taken as an approximation of extreme climate events. The second research question concerns the way happiness studies can inform climate policy and how stringent climate policy would affect well-being. Assuming that effective climate abatement implies a reduction in the rate of economic (income) growth and carbon intensive consumption, I look at how income decline influences subjective well-being in the context of the economic crisis in Spain. To explore the happiness effect of a wider range of climate change mitigation strategies, including ones which are not solely policy-oriented, the sharing of goods is also taken as a case of a community-based initiative resulting in a reduction of greenhouse gas emissions.