Heating up the divide: Climate change and the quest for inclusive growth in urban China

Abstract

Climate change has profoundly affected human production and development, and also brought new challenges to China's goal of achieving inclusive economic growth. Using the data of 273 cities in China from 2001 to 2019, this research evaluates the impact of climate change on urban inclusive economic growth by constructing a temperature bin variable according to the daily average temperature. It is found that with the temperature bin [18 °C, 21 °C) as the benchmark group, both temperature rise and fall have a negative influence on inclusive economic growth. Notably, the adverse effects of high temperatures (above 27 °C) are statistically and economically significant, exhibiting a trend of increasing magnitude. The mechanism test shows that high temperature affects the inclusive growth level of the urban economy mainly by exacerbating the urban‒rural income gap. The heterogeneity analysis found that cities located in hot regions, southern regions or coastal areas are more sensitive to high temperatures and experience more prominent effects. This research holds significant practical implications for China to achieve a win‒win situation of balanced economic development and climate governance.