Valuing China’s Economic Impacts of Climate Change

56 Pages Posted: 22 Sep 2020

See all articles by Hongbo Duan

Hongbo Duan

Chinese Academy of Sciences (CAS) - University of Chinese Academy of Sciences

Deyu Yuan

University of International Business and Economics

Zongwu Cai

University of Kansas - School of Business - Economics Area

Shouyang Wang

Chinese Academy of Sciences (CAS) - Academy of Mathematics and Systems Science

Date Written: November 5, 2019

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 impacts 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℃-temperature, 100mm-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 impacts 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.

Keywords: Climate Change; Economic Output; Heterogeneity Effects; Prefecture Cities; China

JEL Classification: Q54; Q56; O13

Suggested Citation

Duan, Hongbo and Yuan, Deyu and Cai, Zongwu and Wang, Shouyang, Valuing China’s Economic Impacts of Climate Change (November 5, 2019). Available at SSRN: https://ssrn.com/abstract=3669663 or http://dx.doi.org/10.2139/ssrn.3669663

Hongbo Duan

Chinese Academy of Sciences (CAS) - University of Chinese Academy of Sciences ( email )

Building 7, NO. 80 Zhongguancun Road
Beijing, Beijing 100190
China

Deyu Yuan (Contact Author)

University of International Business and Economics ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Zongwu Cai

University of Kansas - School of Business - Economics Area ( email )

1300 Sunnyside Avenue
Lawrence, KS
United States

Shouyang Wang

Chinese Academy of Sciences (CAS) - Academy of Mathematics and Systems Science

Beijing
China

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