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The adaptive investment effect: Evidence from Chinese provinces

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  • Mohaddes, Kamiar
  • Williams, Rhys J.

Abstract

This paper investigates the “adaptive investment effect”, a redirection of investment towards adaptive capital in order to mitigate the negative effects of climate change. We find that the impact of investment on economic growth is reduced by between 27% and 37% in Chinese provinces investing more in adaptive capital. This implies that the benefits from mitigation policies are greater than existing studies suggest.

Suggested Citation

  • Mohaddes, Kamiar & Williams, Rhys J., 2020. "The adaptive investment effect: Evidence from Chinese provinces," Economics Letters, Elsevier, vol. 193(C).
    • Handle: RePEc:eee:ecolet:v:193:y:2020:i:c:s0165176520302160
    DOI: 10.1016/j.econlet.2020.109332
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    Cited by:

    1. Novelli, Giacomo, 2022. "Energy Dependency and Long-Run Growth," FEEM Working Papers 329650, Fondazione Eni Enrico Mattei (FEEM).
    2. Kamiar Mohaddes & Ryan N C Ng & M Hashem Pesaran & Mehdi Raissi & Jui-Chung Yang, 2023. "Climate change and economic activity: evidence from US states," Oxford Open Economics, Oxford University Press, vol. 2, pages 28-46.
    3. Giacomo Novelli, 2022. "Energy Dependency and Long-Run Growth," Working Papers 2022.42, Fondazione Eni Enrico Mattei.

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    More about this item

    Keywords

    Climate change; Adaptation; Investment; China;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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