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Valuing the impact of climate change on China’s economic growth

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  • Duan, Hongbo
  • Yuan, Deyu
  • Cai, Zongwu
  • Wang, Shouyang

Abstract

There are still many uncertainties regarding the possible influences of global climate change in the mid-latitude regions, owing to rather limited research and lack of empirical evidence. This paper systematically evaluates the economic impact of climate variation by constructing a 27-year panel dataset of 274 prefecture cities and 816 weather stations in China. Our results document some significant climate–economic relationships, with the increase of 1 °C-temperature, 100 mm-rainfall, and 1%-humidity associated with a 0.78% decrease, 0.86% increase and 1.34% decrease in output, respectively. Higher temperature damages are reflected in less-developed regions, while the positive impact of rainfall mainly appear in more-developed regions. Using integrated assessment models, we project that the model-average climate damage of China may account for up to 4.23 percent of GDP by 2100, based on a nonlinear historical climate–economic interaction.

Suggested Citation

  • Duan, Hongbo & Yuan, Deyu & Cai, Zongwu & Wang, Shouyang, 2022. "Valuing the impact of climate change on China’s economic growth," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 155-174.
    • Handle: RePEc:eee:ecanpo:v:74:y:2022:i:c:p:155-174
    DOI: 10.1016/j.eap.2022.01.019
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    More about this item

    Keywords

    Climate change; Economic output; Heterogeneity effects; Prefecture cities;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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