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Abstract

Economy-wide and hydrological-crop models are combined to assess the economic impacts of historical climate variability and future anthropogenic climate change in Zambia. Accounting for uncertainty, results indicate that, on average, current variability reduces gross domestic product by 4% over a 10-year period and pulls 2% of the population below the poverty line. Socioeconomic impacts are much larger during major drought years, thus underscoring the importance of extreme weather events in determining climate damages. Climate change scenarios draw on projections for 2025. Results indicate that, in the worst case scenario, damages caused by climate change are half the size of those from current variability. The paper concludes that current climate variability, rather than climate change, will remain the more binding constraint on economic development in Zambia, at least over the next few decades.