The uneven impacts of climate change on China's labor productivity and economy

Abstract

Climate change is considered to increase economic costs by worsening heat-related labor productivity loss. While extensive global and national research has been conducted on this topic, few studies have analyzed subnational and individual economic impacts, potentially weakening local governments’ motivation to tackle climate change. Figuring out the most affected regions and labors could help climate policymakers to identify priority regions and sectors to allocate adaptation resources efficiently, and enhance stakeholder engagement. This study adopted a provincial Computable General Equilibrium model by distinguishing different labors and regions in modelling work to address the aforementioned gap. The study estimated economic costs at different level under three climate change scenarios (lower (SSP126), middle (SSP245), and higher (SSP585) warming scenario). Low-income regions located in southwest part of China (such as Guangxi and Guizhou), would experience the largest economic loss, 3.4–7.1 times higher than high-income in China by 2100 under SSP245 scenario. Additionally, wages for labors highly sensitive to heat in these regions are expected to rise, for example, by an 8.3% rise in Guangxi, driven by the rising demand for these labors. Conversely, others would experience a significant wage decrease, especially those with less sensitivity (e.g., managers). Therefore, we recommended that national financial supports be allocated more to these most affected regions and that government encourage managers provide assistance to workers vulnerable to heat.