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Pollution and Economics
Introduction
Climate change is a catastrophic global externality that is unevenly distributed across the world and generations. Since the recognition of the adversities of climate change, there have been widespread efforts to estimate or study the economic effects of climate change on various sectors of the Chinese economy. Sectors of the Chinese economy that are immensely affected by climate change are agriculture, forestry, coastal zones, energy development, fisheries, and water resources (Song and Wing 48). The agricultural sector is the most affected one.
Geographically, China is located in the cold temperature zones that are found on the North and tropical belt found on the South. China is one of the world’s largest agricultural economies, where agriculture accounts for 18.7 percent of the GDP. The agricultural sector in the country must feed a fifth of global citizenry. To study the cost of adverse limatic changes on the Chinese economy, particularly on the agricutural sector, it is vital to use models that assess the impacts of climate change (Johnson 19). This paper will provide a detailed estimate of the cost of climate change on the Chinese economy. The study computed the impact of changes in precipitation and temperature on the net revenue of agriculture per Mu (1 Hectare = 15 Mu).
Methodology
The study will use the Ricardian method to approximate the incidence of climate change on the agricultural economy. The approach used examines the effects of climate on different agricultural zones and its effects on the net value or rent of farmland. The approach used in this study is a cross sectional empirical study that is designed to estimate the effects of climate on different farming practices. This method employs the typical economic measures of farm performances, net farm income, or net revenue. An examination of the economic performance of critical sectors across different climates enables the empirical estimation of long term climatic sensitivity. This method has been successfully used in the estimation of the cost of climate change on the economy of Brazil, India, and the US (Wei 21). An important ability of the approach is the fact that it can capture economic adaptations in response to local environmental conditions. It also captures actual responses instead of controlled responses.
Spatial Variations of Economic Costs
In the case of agricultural activities, Chinese aggregate agriculture cannot be considered at risk to climate changes. However, this does not protect the local populations from economic losses. Regional variations in precipitations and temperatures affect each area according to the season and magnitude of the event. During winter, Northern China experiences negative effects or costs of climate change from the increased temperature. However, the Southern part benefits because of the warming winter. The population on the South benefits because of a reduction in the number of diseases that affect crops such as wheat. AIDitionally, the warm weather experienced in the Southern parts of the country is beneficial to farmers who want to produce vegetables and fruits. The whole of the country experiences negative effects from spring temperatures. One of the regions that experience the most negative impacts are the North and South of China Plains and Yangtze River Delta. The negative effects are caused by the fact that the warm weather causes wheat to grow quickly, and it intensifies spring drought. AIDitionally, as a result of a rapid increase in temperatures on the South, crops may fail. Areas in North China Plain experience positive effects from the summer temperatures. The Sourthern parts of the country experience the most negative effects from the summer temperatures. AIDitionally, the distribution of the effects of autumn temperature is uniformly beneficial (Watson 84). A warm harvet season facilitates an expeditious crop harvesting. An increase in precipitation has negative impacts, particularly in the Southwestern regions of the country. The Southern and Southeastern parts of the country benefit from increases in winter precipitation.
Economic Costs of Climate Change
In this case, economic estimates or costs of climate change are usually based on the damage functions that are related to GDP losses due to increases in temperature or precipitation. The approximations of GDP costs cover different climate change impacts that are grouped in the nonmarket and market impacts. Market impacts or effects include impacts on climate sensitive areas of the economy, such as forestry, tourism, agriculture, and fisheries, in aIDition to damages experienced in coastal areas. The damages in coastal areas are as a result of a rise in sea levels. The economic costs of climate changes are also transferred to other crucial areas, such as variations in water resources and changes in energy expenditure. Nonmarket effects of climate change are felt in sectors such as the health sector because of increased water shortages, spread of infectious diseases, and pollution. They are also felt in human settlements, ecosystems, and leisure activities. The point to mean GDP losses occassioned by a 3 degree celcius warming is between 0-3 percent of the country’s GDP (Pittock 113).
Estimates of the total economic costs associated with damages from climate change mask the large variations across regions in China. Costs of damages tend to be high in regions that have high initial temperatures and low levels of development. In China, a moderate increase in temperature will increase agricultural productivity in regions that have low initial temperatures. However, it may lead to crop failure in regions that have high initial temperatures. Warming reduces deaths associated with cold climates. However, it increases morbidity and mortality in regions that have warm climates. In terms of enegery expenditures, warming helps in the reduction of energy expenditures. It reduces expenditures on heating, but may increase energy expenditures because of the need for summer cooling (Pittock 115).
The Economic Costs of the Mitigation Efforts
As a result of the economic growth and economic activities in China, the country has been heavily associated with climate change. This means that China has some economic responsbilities for climate change. As a result, the country must come up with mitigation efforts that target not only local systems but also the global impacts of climate change. China should be spending much of its resoures in the mitigation of climate change because of its total emissions and the refusal of the country to commit to emission caps. Macroeconomic modeling of policies that seek to mitigate climate change focus on indirect and direct costs of reducing GHG emissions. They also focus on structural changes in the economic needs of the country. This means that manufacturing factories and activities must reduce their emissions. This has cost implications because factories will be forced to purchase new machines and technologies that reduce emissions. AIDitionaly, they might be forced to scale down on their operations in order to reduce their emissions. One of the mitigation policies is making polluters pay for their pollution. This has cost implications because the price on GHG emissions leads to an increase in the cost for producers who buy GHG intensive services and goods as inputs. The main expense of these products is that they induce technological switching (Yu 33). For instance, they may switch from fossil fuels to renewable energies. Consumers may swith to less GHG intensive products. This will drive up the prices of these products. In order to mitigate climate change through this policy, China will be required to make incremental energy related investments. The International Energy Agency approximates the figure at $10.5 trillion for the period between 2010 and 2030.
Conclusion
An investigation of the costs of climate change on the Chinese economy will be conducted using the Ricardian method. The approach used examines the effects of climate change on different sectors of the economy. Climate change immensely impacts on agriculture and agricultural activities. China is a leading agricultural economy with agriculture accounting for 18.7 percent of the country’s GDP. The approach used in this study is a cross sectional empirical study that is designed to estimate the effects of climate change on different farming practices. Using this method, it was possible to see that the costs of climate change on the economy vary according to the event and location. Increase in precipitation cause flooding and increase in temperature cause crop failure and increased energy expenditures for summer cooling. The outstanding aspect is that China must make incremental investments in shifting energy expenditures from fossile fuels to renewable energy sources.
Outline
Introduction
This section introduces the paper by stating that climate change is a catastrophic global externality that is unevenly distributed across the world and generations. The section also identifies some of the sectors of the economy that are affected by climate change. The agricultural and energy sectors are the most affected sector by climate change in China.
Methodology
This section outlines the metod that will be used in the study of the cost of climate change on the Chinese economy. The study will use the Ricardian method to approximate the impact of climate change on the agricultural sector. The approach used examines the effects of climate change on different economic zones. The approach used in this study is a cross sectional empirical study designed to estimate the effects of climate on different economic activities.
Spatial Variations of Economic Costs
This section introduces the costs of climiate change on agriculture. Regional variations in precipitations and temperatures affect each area according to the season and magnitude of the event. The section outlines the effect of climate change on different agricultural areas in the country.
Economic Costs of Climate Change
This section outlines the costs of climate change on the Chinese economy. In this case, economic estimates or costs of climate change are usually based on the damage functions that are related to GDP losses due to increases in temperature or precipitation. The approximations of GDP costs cover different climate change impacts that are grouped in the nonmarket and market impacts.
The Economic Costs of the Mitigation Efforts
This section outlines the economic costs of the mitigation efforts instituted by China. China has some economic responsbilities for climate change. As a result, the country must come up with mitigation efforts that target not only local systems but global impacts of climate change. Macroeconomic modeling of policies that seek to mitigate climate change focus on indirect and direct costs of reducing GHG emissions. They also focus on structural changes in the economic needs of the country.
Conclusion
This section concludes the paper by providing a summary of the points discussed. The approach used in this case examines the effects of climate change on different sectors of the economy. Climate change immensely impacts on agriculture and agricultural activities, in aIDition to the energy sector.

Works Cited
Johnson, ToID M. China: Issues and Options in Greenhouse Gas Emissions Control: Report. Washington, DC: World Bank, 2006. Print.
Pittock, A. B. Climate Change: The Science, Impacts and Solutions, 2009. Internet resource.
Song, Ligang, and Wing T. Woo. China’s Dilemma: Economic Growth, the Environment and Climate Change. Canberra: Anu E Press, 2008. Internet resource.
Watson, Robert T. The Regional Impacts of Climate Change: An Assessment of Vulnerability: A Special Report of IPCC Working Group Ii. Cambridge [u.a.: Cambridge Univ. Press, 2008. Print.
Wei, Yiming. Energy Economics: Co[subscript 2] Emissions in China. Beijing: Science Press, 2010. Internet resource.
Yu, Hongyuan. Global Warming and China’s Environmental Diplomacy. New York: Nova Science Publ, 2008. Print.

Appendix

(Watson 17)

(Watson 33)
Disaster Across High And Low Income Earners In The Country

(Watson 54)