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Does Drought Increase Carbon Emissions? Evidence from Southwestern China

Author

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  • Jie Yang

    (University of Toyama)

  • Yijing Huang

    (Peking University)

  • Kenji Takeuchi

    (Graduate School of Economics, Kobe University)

Abstract

This study estimates the impact of the 2009/2010 drought in southwestern China on economic activities and CO2 emissions. We focus on the economic outcomes of the power and energy intensive sectors to investigate the substitution between hydropower and thermal power during this extreme drought. Panel data for 97,387 firms from 2006 to 2013 are used to examine the responses of firms to this extreme climatic event. We find that severe drought reduces hydropower generation, as well as the economic outputs of energy-intensive sectors, while it increases the power generated by coal-fired power plants. As a result, the net emissions of carbon dioxide between 2009 and 2013 increased by 443,425 tons. The findings suggest that climate disasters may increase carbon emissions, thereby posing a threat to further climate change.

Suggested Citation

  • Jie Yang & Yijing Huang & Kenji Takeuchi, 2020. "Does Drought Increase Carbon Emissions? Evidence from Southwestern China," Discussion Papers 2015, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:2015
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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