Abstract

China, the second largest economy in the world, covers a large area spanning multiple climate zones, with varying economic conditions across regions. Given this variety in climate and economic conditions, global warming is expected to have heterogeneous economic impacts across the country. This study uses annual average temperature to conduct an empirical research from a top-down perspective to evaluate the nonlinear impacts of temperature change on aggregate economic output in China. We find that there is an inverted U-shaped relationship between temperature and economic growth at the provincial level, with a turning point at 12.2°C. The regional and national economic impacts are projected under the shared socioeconomic pathways (SSPs) and representative concentration pathways (RCPs). As future temperature rises, the economic impacts are positive in the northeast, north, and northwest regions but negative in the south, east, central, and southwest regions. Based on SSP5, the decrement in the GDP per capita of China would reach 16.0% under RCP2.6 and 27.0% under RCP8.5.

Significance Statement

To estimate the economic consequences of climate change, we need to understand the relationship between temperature and economic activity. Economic responses to temperature could vary across regions due to climatic, geographic, and socioeconomic conditions. To better quantify the economic impacts of global warming in China, there is a need for understanding temperature–economy relationship at a regional scale. This study demonstrates that economic growth increases with temperature up to an annual temperature average of 12.2°C and decreases thereafter. The effect of global warming could reduce China’s gross domestic product per capita by as much as 27% by 2090. The regional pattern is different, however, with the northeast, north, and northwest regions potentially seeing economic benefits from warming.

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