Abstract
This article aims to identify the mechanism of how climate change affects agriculture through various channels and the mechanism of longer-run adaptation. Using a county-panel dataset spanning the past 35 years, we evaluate the impact of global warming on agricultural total factor productivity (TFP) as well as the impacts on agricultural inputs and outputs in China. Results show that, in the short run, extreme heat has negative effects on China’s agricultural TFP and input utilization, which results in a more negative effect on agricultural output measured by yield. However, longer-run adaptation has offset 37.9% of the short-run effects of extreme heat exposure on TFP, while climate adaptation mitigates agricultural output loss to a greater extent due to more flexible adjustment in labor, fertilizer, and machines in the long run. Despite the detected climate adaptation, projections of impacts under future climate change scenarios still imply a substantial loss in China’s agriculture.
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