Fiscal Antibodies: How Public Health Expenditures Strengthen National Economic Vulnerability to Climate Change

Abstract

This study investigates the relationship between public health expenditures and national climate vulnerability, measured by the Notre Dame Global Adaptation Initiative (ND-GAIN) Index, across 62 developed and developing countries from 2000 to 2023. Motivated by contradictory findings in the prior literature and a lack of large-scale panel econometric evidence, this research aims to determine whether health investments significantly increase climate vulnerability. Using a dynamic generalized method of moments (GMM), the findings show that public health expenditure per capita has a statistically significant positive impact on the ND-GAIN composite index. Findings show that public health expenditure per capita has a statistically significant positive impact on the ND-GAIN composite index—where higher ND-GAIN values indicate lower climate vulnerability and greater adaptive capacity—implying that increased public health spending is associated with reduced national climate vulnerability. In high-income countries, health spending may improve adaptive capacity by leveraging established infrastructure and governance. As a result, policymakers should make funding for public health a top priority in their plans for adapting to climate change. This is because investing in health alone is not enough; they also need to invest in infrastructure, governance, and adaptive capacity, especially in developing countries.