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Balancing Climate Change and Economic Development: the Case of China

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  • Lin, Fan
  • Xie, Danyang

Abstract

We analyze China's economic growth and climate change relationship using a dynamic equilibrium model with regional disparity. Our simulation findings suggest that without intervention, China's temperatures could rise to 4.7◦C and 3.4◦C in advanced and backward regions, respectively, by mid-next century. A social planner path could limit this rise to 3.3◦C across both regions, yielding welfare benefits. However, if China adheres to the Paris Agreement's 2◦C limit without exceptional low-carbon technology advancements, significant social welfare losses could occur.

Suggested Citation

  • Lin, Fan & Xie, Danyang, 2023. "Balancing Climate Change and Economic Development: the Case of China," MPRA Paper 119970, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:119970
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    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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