Climate change impacts on China's agriculture: The responses from market and trade

2018·0.45 MB·English

by  Wei Xie

China Economic Review xxx (xxxx) xxx–xxx
ContentslistsavailableatScienceDirect
China Economic Review
journal homepage: www.elsevier.com/locate/chieco
Climate change impacts on China's agriculture: The responses from
market and trade
Wei Xiea, Jikun Huanga,⁎, Jinxia Wanga, Qi Cuia,c,⁎⁎, Ricky Robertsonb, Kevin Chenb
aChinaCenterforAgriculturalPolicy,SchoolofAdvancedAgriculturalSciences,PekingUniversity,Beijing100871,China
bInternationalFoodPolicyResearchInstitute,Washington,DC20005-3915,USA
cBeijingKeyLabofStudyonSci-TechStrategyforUrbanGreenDevelopment,SchoolofEconomicsandResourceManagement,BeijingNormal
University,Beijing100875,China
ARTICLE INFO ABSTRACT
Keywords: China'sfoodsecurityhasbeenfacingseveralchallenges,whicharelikelytobeworseneddueto
Climatechange climatechange.Thepurposeofthispaperistoprovideanevidenceontheimpactsofclimate
Foodsecurity changeonChina'sagriculture,withparticularattentiontothemarketandtraderesponses.Using
Market projectedcropyieldchangesforChinaandits'maintradingpartnersunderchangingclimate,we
Trade
employ an agricultural partial equilibrium model (CAPSiM)and a linked national and global
China
equilibriummodel(CAPSiM-GTAP)toassesstheimpactsonfoodproduction,price,tradeand
self-sufficiencyofChina.Ourresultsshowthatclimatechangewillhavesignificanteffectson
crop production though with large differences among crops. Under the worst climate change
scenarioRCP8.5,wheatyieldinChinaisprojectedtodeclineby9.4%by2050,whichisthe
biggestyieldreductionamongthecrops.However,themarketcanalsorespondtotheclimate
change,asfarmerscanchangeinputsinresponsetoreducedyieldsandrisingprices.Asaresult,
production losses for most crops are dampened. For example, wheat production loss under
RCP8.5reducestoonly4.3%duetomarketresponse.Theadverseimpactsoncropproduction
willbefurtherreducedafteraccountingforthetraderesponseasfarmersadjustproductionto
muchhigherpricesinthemoreseverelyaffectedcountries.Thepaperconcludesthatweneedto
learnmorefromfarmerswhooptimizetheirproductiondecisionsinresponsetothemarketand
tradesignalsduring climate change. Amajor policyimplication is that policymakers need to
mainstreamthemarketandtraderesponsesintonationalplansforclimateadaptation.
1. Introduction
China'sagricultureisexpectedtofacechallengesinthefuturemainlyduetorisingfooddemandandconstraintsoflandandwater
resources.AlthoughChinahaslargelyensureditsfoodsecurityinthepast40years,ithasincreasinglyreliedoninternationalmarkets
toensureitsfoodsupplysince2004(Ali,Huang,Wang,&Xie,2017;FAO,2017).Withincreasingpopulation,higherincomeand
constraintsofresources,thepressureonChina'sfoodsecurityisgoingtoincreaseinthefuture.Huang,Wei,Cui,andXie(2017)
predictedthatChina'soverallfoodself-sufficiencyislikelytofallfrom94.5%in2015toaround91%by2025.
ClimatechangewilllikelyaggravatethechallengesChinafacesonitsfoodsecurityinthefuture.China'sannualaveragetem-
peraturehasbeenrisingsignificantlyoverthepastsixdecadesandthewarmingtrendwillcontinueunderthefutureprojections(Cui,
⁎Correspondingauthor.
⁎⁎Correspondingauthor.
E-mailaddresses:[email protected](J.Huang),[email protected](Q.Cui).
https://doi.org/10.1016/j.chieco.2018.11.007
Received15December2017;Receivedinrevisedform21November2018;Accepted26November2018
1043-951X/ © 2018 Elsevier Inc. All rights reserved.
Please cite this article as: Xie, W., China Economic Review, https://doi.org/10.1016/j.chieco.2018.11.007
W.Xieetal. China Economic Review xxx (xxxx) xxx–xxx
Xie,&Liu,2018;Liang&Yan,2016;Meehl,2007;Nakicenovicetal.,2000).Itisgenerallyacceptedthatthemechanismofclimate
changeaffectingChina'sagricultureismainlythroughrisingtemperatureandincreasingfluctuationinprecipitation(Wuetal.,2014;
EditionCommitteeofChina'sNationalAssessmentReportonClimateChange,2015).
TheimpactsofclimatechangeonChina'sagriculturehavebeenwidelystudiedintheliteraturethroughbiophysicalmodels(e.g.,
Li & Geng, 2013; Wang, Huang, & Yang, 2014; Xiong, Matthews, Holman, Lin, & Xu, 2007; Tao, Hayashi, Zhang, Sakamoto, &
Yokozawa,2008;Xiongetal.,2009;Piaoetal.,2010).Forexample,Linetal.(2005)foundthatthenegativeimpactsofclimate
changeonwheatyieldinChinacouldreachupto5.6–18.5%underA2scenario1by2020s.Similarly,Taoetal.(2008)suggestedthat
ifthetemperatureincreasesby1°C,riceyieldwoulddeclineby6.1–18.6%evenafterconsideringtheadaptationmeasures.Xiong,
Conway,Lin,andHolman(2009)predictedamoderatedecreaseinriceyieldintherangeof4.9–8.6%in2050s.Meanwhile,some
otherstudiesalsoprovidetheevidenceonpositiveimpactsofclimatechangeonsomeofthecrops.Linetal.(2005),forexample,
concludedthatirrigatedmaizeyieldwouldincreaseslightlyby2020underB2scenario1.
Amajorlimitationofthebiophysicalmodelsforassessingclimatechangeimpactisthattheytendtooverestimateadverseimpacts
ofclimatechangeonagriculture,astheyfailtoaccountfortheunderlyingbufferingcapabilityofeconomicsystem,whichthelater
attainsthroughadjustmentsinproductioninputsandstructure.Forexample,Wang,Huang,andYang(2009)usedageneralequi-
librium economic model to assess the climate change impacts on agriculture in China and found that the percentage decrease in
productionofrice,wheat,andmaizein2030wouldbelowerthantheyieldchangespredictedbybiophysicalcropmodelers.Using
the global general equilibrium model (AGLINK), Zhai, Lin, and Byambadorj (2009) also found that climate change would cause
China'stotalcropproductiontodecreaseonlyslightly(0.2–0.5%)in2080.Someglobalstudiesonclimatechangedoexplicitlycover
Chinawhileaccountingforendogenousresponseofmarkets(Calzadillaetal.,2013;Nelson,Valin,etal.,2014;Parry,Rosenzweig,
Iglesias,Livermore,&Fischer,2004;Zhaietal.,2009;Zhouetal.,2017).Nevertheless,thesestudieseitherlackempiricallybased
dataonyieldshocksformaincropsinChinaordonotapplythedetailednationaleconomicmodelforChinathatcanreflectChina's
agriculturemarketaccurately.
InternationaltradeisalsoanotherimportantfactoraffectingChina'sfoodmarketbutfewstudieshaveconsideredtheroleoftrade
whileassessingclimatechangeimpactsonChina.Around2004,Chinaturnedanetimporterofagricultureproductsformpreviously
anetexporter,somuchsothatin2016 > 80milliontons(Mt)ofsoybeanwasimported.Atthesametime,Chinabecametheworld's
largestimporterofrice(Huangetal.,2017).Thereareseveralimportantglobalstudiesontheroleofinternationaltradeinclimate
changeonagriculture.Forexample,ReillyandHohmann(1993)madethefirstattempttodiscusstheroleofinternationaltradein
assessingclimatechangeimpacts.Later,BaldosandHertel(2015)exploredthepotentialforamorefreelyfunctioningglobaltrading
systemtomaintainimprovedfoodsecurityinthelongrun(i.e.by2050).Morerecently,Brownetal.(2017)suggestedthatglobal
tradewouldcontinuetoplayacentralroleinassuringthatglobalfoodsystemadaptstoachangingclimateinthatitislikelyto
facilitate the movement of food from areas of surplus to areas of deficit. However, there is no China-focused study that assesses
climatechangeimpactsonChina'sagriculturewhileaccountingfortheroleofinternationaltrade.
TheoverallpurposeofthispaperistoprovideanupdatedandmorereliableevidenceontheimpactsofclimatechangeonChina's
production,prices,tradeandself-sufficiencyofmajorcrops,withparticularfocusonthemarketandtraderesponses.Ourstudyaims
togivesomeperspectivetothestudiesthat(i)focusonlyontheimpactsofclimatechangeonnationalfoodmarkets(ii)usesingle
regionmodeland(iii)failtoconsiderthepricetransmissionfromtherestofworld.Ourstudyexaminestheclimatechangeimpacts
onmajorcropstowards2050undertheworstclimatechangescenario(measuredwithrepresentativeconcentrationpathway,i.e.,
RCP8.5)andthebestclimatechangescenarioRCP2.6.2Toachievethispurpose,weusetheeconometricallyestimatedprojected
changesintheyieldsofmajorcropsinChina,whilewederivetheprojectedcropyieldchangesforChina'smaintradingpartnersfrom
aprocess-basedbiophysicalmethod.Next,weemployawidely-usedagriculturalpartialequilibriummodel(ChinaAgriculturePolicy
Simulation Model, CAPSiM) of China to assess the climate change impacts on agriculture, thus considering the domestic market
responses.Thenweusethelinkednationalandglobalequilibriummodel(CAPSiM-GTAP)toassesstheclimatechangeimpactson
agriculture,whereinweconsiderboththemarketandtraderesponses.Thelinkedmodelapproacheffectivelytransmitstheeffectsof
foreigncountries'climateshocksonagriculturetoChinaviatrade,whileallowingustouseamorepreciseanddetailednational
economicmodel.
Ourresultsshowthattheeffectsofclimatechangeoncropproductionaresignificantbuthavelargevariationsamong crops.
Undertheworstclimatechangescenarioi.e.,RCP8.5,amongallcropsinChina,wheatyieldisprojectedtoexperiencethelargest
decreaseof9.4%by2050.Aftertakingintoaccountthemarketresponse,productionlossesformostcroparedampened(e.g.wheat
production loss reduces to only 4.3%) because of the growers' response to changes in agricultural prices under climate change.
Moreover,ifweconsidertheimpactsofclimatechangefromtherestoftheworld,whichaffectChina'stradeandthereforedomestic
production,theseverityofclimatechangeimpactsonChina'sagriculturalproductionwillbefurtherreduced,e.g.toaround4%for
wheat.Thestudyconcludesthatweneedtolearnmorefromfarmerswhorespondtochangingclimateaccordingtothemarketand
tradesignals,andfurthermainstreamtheselessonsintonationaladaptationdevelopmentplan.
Therestofthepaperisorganizedasfollows:Section2introducesdatasourcesforyieldchangesunderdifferentclimatechange
1A2andB2scenariosrepresentdifferentcarbonemissionpathwaysandcorrespondinglydifferenttemperatureincreaseinthefuture.
2RCP2.6 and RCP8.5 are named after a possible range of radiative forcing values in the year 2100 relative to pre-industrial values (+2.6
and+8.5W/m2,respectively).WecaneasilyseethatRCP2.6andRCP8.5representlowandhighcarbonemissionpathwaysandcorrespondingly
lowandhightemperatureincrease,respectively,inthefuture(IPCC,2014).
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Table1
Thecropproduction(Mt)andclimatechangeimpactsoncropyieldofChinaunderRCP2.6andRCP8.5(%).
Production(2012) 2030 2050
RCP2.6 RCP8.5 RCP2.6 RCP8.5
Wheat 121.02 −2.28 −3.39 −4.83 −9.39
Rice 204.24 −0.56 −0.78 −1.34 −2.60
Maize 205.61 0.33 −0.01 0.25 0.31
Soybean 13.60 0.26 0.08 0.31 0.42
Cotton 6.84 0.73 1.76 1.74 4.24
Rapeseed 14.00 −0.17 0.18 0.03 0.61
Peanut 16.69 −0.20 −0.20 −0.37 −0.20
Sugarbeet 11.74 −0.35 −0.14 −0.65 −0.38
Note:Thebaseyearis2012.
Source:Theproductionin2012comesfromtheCAPSiMdatabase;theyieldchangecomesfromWang,2016.
scenarios for China and its main trade partners. Section 3 describes the simulation methodology, baseline scenario and climate
changescenarios.Section4presentsandanalyzestheresultsforclimatechangeimpactsonChina'sagricultureandtheroleofmarket
andtrade.Section5concludesthestudywithpolicyimplications.
2. ClimatechangeshocksforbiophysicalyieldsofcropsinChinaandtherestofworld
2.1. ClimatechangeshocksforbiophysicalyieldsofcropsinChina
Inthisstudywecoverrice,wheat,maize,soybean,cotton,rapeseed,peanutandsugarbeetastheyarethemajorcropsproduced
inChina.WebeganwithextractingthechangingtrendsoftemperatureandprecipitationforChinafromthedownscalesimulationof
LiangandYan(2016),basedontheRCPscenariosofIntergovernmentalPanelonClimateChangeFifthAssessmentReport(IPCC
AR5)(IPCC,2014).BothRCP8.5andRCP2.6scenariosaremodeledinthisstudyastheworstandbestclimatechangescenario,
respectively.InLiangandYan(2016),severalglobalcirculationmodels(GCM),providedbyCMIP5,areappliedtoprojectmonthly
temperatureandprecipitationduring2010–2100ineachprovinceofChinawithbaseyearof1980–2010.Thenweestimateboth
annualaverageandstandarddeviationoftemperatureandprecipitationduringeachcrop'sgrowthseason.Theprojectionsshowthat
comparedto2012,theannualaveragetemperatureandprecipitationduringgrowingseasonofeachcropwillincreasesignificantly
in2020–2050,whilethestandarddeviationofannualprecipitationwillincreasesignificantlyforeachcrop(seeAppendixFig.1).
Thisshowsbothtemperatureandprecipitationwillincrease,butthelatterwillhavemoreannualfluctuationduringcropgrowing
seasonsofthefutureyears.
WeobtainthechangesinannualcropyieldunderclimatechangeinChinafromauniqueeconometricestimationofWang(2016).
ThestudyusedChina'sprovincialpaneldatatoestimateclimatechangeimpactsontheyieldsofdifferentcropsintermsofchangesin
annualtemperature,precipitationandtheirstandarddeviationsduringthegrowthseasonofmajorcropproducingprovinces,while
controllingfordifferencesinagricultureinputsandtechnologyprogress(AppendixTable2).Thestudyfinallyillustratedanonlinear
correlationbetweenclimatevariablesandcropyield,andextrapolatedtheannualchangesofChina'scropyieldsunderIPCC'sfour
RCPscenariosfortheperiod2010–2050(Table1).3
ThephysicalimpactsofclimatechangeoncropyieldsinChinavaryconsiderablyamongcropsandareshowninTable1.Wheat,
rice,peanut, and sugarbeet are projectedto experience yield reductionsunder both RCP 8.5and RCP 2.6 scenarios, with wheat
expectedtobearthehighestyieldloss.Specifically,wheatyieldwoulddeclinesignificantlyin2050i.e.,by4.83%underRCP2.6and
9.39%underRCP8.5.Nexttowheat,riceyieldwouldhavemoderateyieldreductionin2050of1.34%underRCP2.6and2.60%
underRCP8.5.Duetothechangingclimate,theyieldsofpeanutandsugarbeetareprojectedtodroponlymarginally.Othercrops,
includingcotton,rapeseed,soybeanandmaizemayseepositiveyieldimpactsfromclimatechange.Amongthesecrops,cottonwill
havethemostsignificantincreaseinyieldduetoclimatechange,followedbyrapeseed,soybean,andmaize.UnderRCP8.5,cotton
yieldisprojectedtoincreaseby1.74%in2030and4.24%in2050.Comparedwithcotton,thepositiveimpactsofclimatechangeon
soybeanandmaizeyieldarerathersmallsuchthattheiryieldswouldincreaseby<0.5%in2050underRCP8.5.Toconcordwith
cropsectorsinCAPSiMmodel,weestimateoilseedyieldchangeastheaverageofchangesinrapeseedandpeanutyieldsweightedby
harvestareain2015.
3Theinterestedreaderscancontactthecorrespondingauthoraboutthedatasource,detailestimationmethodandresults.
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Table2
Theannualimpactsofclimatechangeoncropyieldintherestoftheworldto2050(%).
RCP2.6 RCP8.5
Rice Wheat Maize Soybean Rice Wheat Maize Soybean
Australia&NewZealand −0.02 −0.27 −0.12 −0.09 −0.19 −0.40 −0.28 −0.28
Japan 0.15 −0.09 −0.04 0.01 0.16 0.09 −0.18 −0.01
Korea −0.01 0.23 −0.35 −0.03 −0.06 0.24 −0.66 −0.07
Indonesia −0.01 0.00 −0.17 −0.08 0.00 0.00 −0.33 −0.13
Malaysia −0.04 0.00 −0.17 0.12 −0.08 0.00 −0.42 −0.05
Philippine −0.03 0.00 −0.18 −0.11 −0.05 0.00 −0.38 −0.24
Thailand −0.05 0.05 −0.38 −0.23 −0.14 −0.00 −0.79 −0.31
Vietnam −0.09 0.03 −0.22 −0.12 −0.18 0.03 −0.57 −0.26
Canada 0.00 0.05 0.15 0.17 0.00 −0.03 0.05 0.14
USA −0.09 0.06 −0.22 −0.03 −0.27 0.07 −0.63 −0.21
Argentina −0.03 −0.10 −0.05 −0.01 −0.12 −0.15 −0.25 −0.15
Brazil −0.07 −0.04 −0.14 −0.13 −0.18 −0.18 −0.41 −0.34
EU_28 0.07 0.13 −0.03 0.08 0.04 0.06 −0.20 0.00
RestofWorld −0.07 0.05 −0.13 −0.15 −0.20 −0.01 −0.37 −0.37
Note:Thebaseyearis2012.
Source:SimulationresultsfromIFPRI.
2.2. ClimatechangeshocksforbiophysicalyieldsofcropsintherestofWorld
Theestimatesonclimatechangeimpactsoncropyieldsforothercountriesarebasedonthebiophysicalsimulationsofaprocess-
basedcropmodelbytheInternationalFoodPolicyResearchInstitute(IFPRI).Annualyieldchangesofmajorcrops,i.e.,wheat,maize,
rice,andsoybean,inresponsetoclimatechangearelistedinTable2fortheworld's14regions/countries.Theyieldchangesofthese
crops are estimated using the Decision Support System for Agrotechnology Transfer (DSSAT) model and IPCC RCP scenarios for
2011–2050withthebaseyearof2010.AsshowninTable2,climatechangeisprojectedtocausedifferentyieldchangesamong
majorcropsinothercountriesunderRCP2.6andRCP8.5.Mostcountrieswouldseeareductionintheirannualaveragecropyields
inresponsetoclimatechange.NoticethatUSA,ArgentinaandBrazil,whoarealsothemainexportersofmaizeandsoybean,would
haveseriousyieldlossesby2050.Particularly,theannualaveragedecreaseinmaizeyieldwillbe>0.4%forUSAandBrazil,and
0.2%forArgentinaunderRCP8.5.Whilethesoybeanyieldwillfallby>0.3%forBrazil,and>0.15%forUSAandArgentinaunder
RCP8.5. Thesupplyofthesecrops,alsoregardedasthemajoragriculturalcommoditiesimportedbyChina,willbesignificantly
threatened by climate change, ensuing a major global hike in their respective prices. Furthermore, we can also find that Canada
wouldbenefitfromclimatechangeinbothmaizeandsoybeanyieldby2050(increaseby0.05%perannum(p.a.)formaizeand
0.14%p.a.forsoybeanunderRCP8.5).Moreover,mostcountriesarefoundtohavenegativeimpactsofclimatechangeonriceand
wheatyieldsby2050.AustraliaandNewZealandareprojectedtoexperiencethebiggestdecreaseinwheatyield(−0.40%p.a.),
whileUSAhavethebiggestdecreaseinriceyield(−0.27%p.a.)underRCP8.5.Atthesametime,JapanandEuropeanUnionwould
benefitfromclimatechangeintermsofbothriceandwheatyieldsunderRCP8.5.
HerewewanttonotethatusingclimateshocksforChinaandtherestofworldfromdissimilarsourcesinthisstudycanresultin
some inconsistencies. In fact, our motive is to include the effects of adaptation by farmers to reflect the real impacts of climate
change,whichwedothroughoureconometricestimationforChina.AsChinaisourmainstudyregion,ourpriorityistomakesure
thattheresultsofChinahavehighaccuracy.However,duetotheunavailabilityofdataforalltheothercountries,itisimpossibleto
dotheeconometricestimationfortherestofworld,forwhomweusethesimulationresultsfromabiophysicalmodel.Additionally,a
comparison between our econometric results and the biophysical simulation results for China could reveal if there are large dis-
crepanciesbetweenbothsetsofyieldshocks.Here,wefindthatthetwomethodshavesimilarresultsfortheimpacts(forexample,
under RCP8.5 in 2050, the econometric results for rice and soybean are −2.6% and 0.42% respectively; while the biophysical
simulationresultsforriceandsoybeanare−3.2%and−0.87%respectively).Wethinkthatthecropyieldlossesforothercountries
without consideration of adaptation might be slightly overestimated, so the results of our study might also be somewhat over-
estimatedinoursimulationsofeconomicmodels.
3. Simulationmethodologyandscenarios
3.1. SimulationModel
In order to consider the domestic market responses to climate change impacts on China's agriculture, we have used a widely
recognizedagriculturalpartialequilibriummodel(ChinaAgriculturePolicySimulationModel,CAPSiM).Themodelwasdeveloped
attheChinaCenterforAgriculturePolicy(CCAP)inthemid-1990sasapartialequilibriummodelforanalyzingpoliciesaffecting
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China'sagriculturalproduction,consumption,prices,andtrade(Huang&Li,2003;Li&Huang,2004).Sincethen,CAPSiMhasbeen
periodicallyupdatedandexpanded,whiletherecentversionsoftheCAPSiMaredesignedtotrackchangesintradeliberalization,
urbanization,andclimatechange(Yang,Huang,Rozelle,&Martin,2012;Huangetal.,2017).InCAPSiM,thecropssectorsaremore
disaggregatedandaccountfor>90%ofChina'sagriculturaloutput.Themodelcovers21agriculturalcommodities:includingrice,
wheat,maize,othercoarsegrain,sweetpotato,potato,soybean,edibleoilcrops,cotton,vegetables,fruits,othercrops,aswellassix
livestock products and three fishery sectors. The accompanying database of CAPSiM has been updated to 2015 according to the
officialstatisticsfromChina'sNationalBureauofStatisticsandNationalCustoms.CAPSiMcaninvestigatetheclimatechangeimpacts
onChina'sagriculturetorevealtheresponsefromlocalmarkets,withtheassumptionthatclimatechangeeffectsfromothercountries
donottranscendtoChinaviatrade.
Thentoconsiderboththemarketandtraderesponsessimultaneously,wealsousedthelinkednationalandglobalequilibrium
model(CAPSiM-GTAP)toassesstheclimatechangeimpactsonagriculture.GTAP(GlobalTradeAnalysisProject)modelisawell-
recognized multi-country, multi-sector computable general equilibrium model, and is often used for international trade analysis
(Hertel,1997).GTAPmodelhastheadvantageofsimulatingglobalpricechangesofagriculturalcommoditiesinresponsetoclimate
change. However, in contrast to the China module of GTAP model, the CAPSiM model also has the following advantages: first,
CAPSiMisa partial equilibriummodel ofChina'sfoodmarket presenting the supplyanddemandin volumetric(quantity) terms.
Whereas,GTAPmodelisageneralequilibriummodelusingdollarvaluesforsupplyanddemandrelationships.Forfoodmarkets,
quantityimpactsareveryimportantforcapturingtheeffectsofclimatechangeoranyothershocks.Thisisoneofthereasonsthat
researchersusuallyrelyonpartialequilibriummodelstoprojectthequantitylevelresultsforthefuture(forexample,FAO-OECD
AgriculturalOutlook;USDAAgriculturalProjections).Second,mostofthekeyparametersofCAPSiMmodelarederivedfromthe
empiricallybasedstudiesconductedbyCCAP,incontrasttogeneralizedparametersusedinGTAPmodel.Third,thebasedataof
CAPSiMhasbeenupdatedtomorerecentyear(2015)reflectingChina'smarketstructuremoreprecisely,whilethelatestdatabaseof
GTAPmodelisbasedonmarketconditionsin2011.Moreover,theCAPSiMbasedprojectionsonfuturefoodmarketforChinaarealso
widelyacceptedinChina.We,therefore,havehigherconfidenceinCAPSiMresultsincomparisontoresultsfromtheChinamoduleof
GTAPmodel.Overall,alinkedmodelbetweenCAPSiMandGTAPoffersthebestofbothindividualmodelssuchthatwecantransmit
theeffectsofothercountries' climateshockstoChinaviatrade,while simultaneouslyusingamorepreciseanddetailed national
economicmodel.Finally,tomapthesectorsbetweentheCAPSiMandGTAPmodel,theGTAPversion9databaseisaggregatedinto
15regionsand25sectors(AppendixTable1).
FollowingHorridgeandZhai(2005),weestablishedalinkagemodulebetweenCAPSiMandGTAPmodeltoevaluatetheclimate
change impacts while considering both the responses of market and trade concurrently. The key idea of CAPSiM-GTAP linking
method,asproposedbyHorridgeandZhai(2005),istotransmittheglobalpricechangesfromGTAPmodelintothenationalmodel
throughtrade.Specifically,inCAPSiM,theglobaldemandpriceforChina'sfoodexportandtheglobalsupplypriceforChina'sfood
importareexogenousandareupdatedusingtheprojectionofOECD-FAOagriculturaloutlook(OECD/FAO,2018)underthebaseline
scenario.Underourproposedfirstscenario(climatechangescenarioconsideringonlydomesticmarketresponseunderRCP2.6and
RCP8.5usingCAPSiM),aswedonotconsidertheglobalpricechangescausedbyclimatechangeinothercountries,wekeepthe
globaldemandpriceforChina'sfoodexportandtheglobalsupplypriceforChina'sfoodimportsameasthebaselinescenario(only
useCAPSiMmodelasgiveninAppendixTable3).Underourproposedsecondscenario(climatechangescenariosconsideringboth
thedomesticmarketresponseandthetraderesponseusinglinkedCAPSiM–GTAPmodel),weproceededinthreesteps:1)weassume
thatclimatechangeonlyaffectsChinaandthereforeweonlyshockChina'scropyieldsandkeepthecropyieldsforallothercountries
unchangedinGTAPmodel.Ideally,ifthestructureforChina'seconomyinbothCAPSiMandGTAPmodelweresimilartoeachother,
wewouldexpecttohavethesameresultsfromthissimulationasinthefirstscenario.However,asChinaisrepresenteddifferentlyin
bothmodels,weanticipatethatourCAPSiMmodelcanbetterreflectChina'sfoodmarketthantheChinamoduleinGTAPmodel.2)
We assume that climate change strikes all over the world, so we shock all countries' crop yields in GTAP model. 3) We take the
differenceofglobalfoodpricesbetweenstep1and2(step2-step1)asakintotheimpactsofclimatechangeinothercountrieson
China'sfoodmarket.Thus,weincorporatethedifferenceinglobalpricebetweenthetwostepsintoCAPSiMtoreflecttheimpactsof
climatechangeinothercountriesonChina'sfoodmarketthroughtrade(ofcourse,underthesecondscenario,weshockboththecrop
yieldsandtheglobalfoodprices–theglobaldemandpriceforChina'sfoodexportandtheglobalsupplypriceforChina'sfoodimport–
inCAPSiM)(seeAppendixTable3).
3.2. Baselinescenario
ForanalyzingtheimpactsofclimatechangeonChina'sagriculture,weestablishabaselinescenariotowards2050forbothGTAP
model and CAPSiM. The GTAP baseline is constructed by recursively updating the database such that given GDP targets are met
throughgivenexogenousestimatesoffactorendowmentsi.e.skilledlabor,unskilledlabor,capital,naturalresources,andpopulation.
The procedure and the exogenous macro assumptions are discussed in details in Hertel (1997) and Walmsley, Dimaranan, and
McDougall(2006).ForthebaselineinCAPSiM,severalkeyassumptionsareusedforthebaselinescenarioconcerningGDPgrowth,
populationgrowth,urbanizationrate,urbanandruralhouseholds'incomegrowth,andagriculturaltechnologyadvancement(forin
depthdiscussionseeHuangetal.,2017).
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In the baseline projection, China's agricultural production will continuously increase in the future, with a simultaneous and
significantriseintheimbalancebetweenagriculturalproductionanddemand.Demandforfeedgrainswillgrowfasterthantheir
domesticproduction,leadingtodecliningself-sufficiencyrates.4By2050,domesticproductionofriceandwheatwillalmostmeet
China'sdomesticdemand,bothreachinghighself-sufficiencyratesofover95%.However,formaize,whichexperiencedover-supply
inrecentyearsmainlyduetopolicyinterventionsinChina,thedemandwillincreasesignificantlyincomingdecadesduetorising
demandbylivestockproduction.IfChinadoesnotimplementtariffratequota(TRQ)5inthefuture,China'smaizeimportisprojected
tosurpass40milliontonsby2050,leadingtoaself-sufficiencyrateof<85%.Similartomaize,soybeanimportisprojectedtocross
100milliontonsin2050,resultinginaself-sufficiencyrateof<10%forChina.Demandforsugarandedibleoilswillbesignificantly
higher than their respective domestic productions, leading to decreasing self-sufficiency ratios for both commodities. In contrast,
domestic production of vegetables and fruits is projected to increase in pace with domestic demand, ensuring almost full self-
sufficiencyinthefuture.
China's livestock supply-demand balance mostly depends on policies governing feed grain trade and grassland development.
CAPSiM projection shows that aquatic products will almost keep supply-demand balance requiring minimal import. However, li-
vestockself-sufficiencymayundergosignificantchangesduetomanyuncertaintiessurroundingitsdemandandsupply.IfChinawere
toremovetheimportlimitationsonfeedgrainandthusmakewayfordomesticlivestockproductionfedbycheapimportedfeed
grain, pork and poultry could retain high self-sufficiency rates. In contrast, livestock imports in China will significantly increase
mainlyduetomaizeimportlimitation(e.g.TRQ)andinadequategrasslanddevelopment.Inthelattersituation,CAPSiMprojections
showthatinadditiontoconsiderableporkandpoultryimports,Chinawillimportlargequantitiesofbeef,muttonanddairyby2050,
andwillhaveself-sufficiencyratesrangingover70–80%acrossdifferentlivestockproducts.
3.3. Climatechangescenarios
In the CAPSiM settings, percent change of crop yield is a linear function of the percentage change of crop price, input prices
(includingfertilizer,land,andlabor),aswellasotherfactors(suchasclimatechangeconditions).Thus,climatechangeimpactson
cropyieldsdiscussedinsection2aretransmittedintothecropproductionmoduleintheCAPSiMthroughshiftingthecropyield
changes.Meanwhile,cropyieldchangesaresimulatedinGTAPmodelastheshifttototalfactorproductivityofthecropsectors.In
RosonandMensbrugghe(2010),variationsinagriculturalyieldaremodeledaschangesinmultifactorproductivityforagricultural
activities,sothatoutputvolumesvarydespiteusingthesamemixofproductionfactors(theyusedtheENVISAGEmodel—ageneral
equilibriumeconomicmodel).InNelson,Mensbrugghe,etal.(2014),forthegeneralequilibriumeconomicmodels,theyieldshocks
of climate change are implemented as shifts in the land efficiency parameters of the sectoral production functions; while for the
partialequilibriummodels,theshockswereintroducedasadditiveshiftersinayieldorsupplyequation.Robinson,vanMeijl,Valin,
and Willenbockel (2014) also discussed the incorporation of yield shocks into general/partial equilibrium models. It can thus be
concludedthatregardlessofthemodeltypei.e.generalorpartialequilibrium,somestudieschosetoshockTFP;whiletheothers
shocklandefficiency.Inourstudy,fortheCAPSiM,theshocksareintroducedasadditiveshiftersincropyield;forGTAPmodel,crop
yieldchangesaresimulatedaschangesintotalfactorproductivity(TFP)ofthesecropsectors.Becauseweusedthelinkedmodel,we
kepttheshockmethodsconsistentbetweenCAPSiMandtheChinamoduleinGTAP.
WeconstructedtwoseparateclimatechangescenariostosimulatetheimpactsofclimatechangeonChina'sfoodsupply,prices,
tradeandself-sufficiency, andexamine the marketand traderesponses. 1) Climatechangescenarioswith consideringmarket re-
sponse(usingCAPSiM)underRCP2.6andRCP8.5;2)climatechangescenariowithconsideringboththemarketresponseandthe
impactsonrestoftheworld(ROW)(usinglinkedCAPSiM-GTAPmodel).Comparingchangesinbiophysicalcropyieldswithchanges
incropproductionestimatedusingCAPSiMonlycouldrevealtheresponseofdomesticmarketinbufferingclimatechangeimpacts,
becauseCAPSiMmodelkeepsfoodimportandexportpricesunchanged.ThelinkedCAPSiM–GTAPmodel,ontheotherhand,allows
thefoodimportandexportpricestochangewithchangesinglobalfoodprices,whichareprojectedbytheGTAPmodel.Acom-
parisonbetweentheresultsfromCAPSiMandCAPSiM-GTAPmodelcouldrevealtheresponseofglobaltradeinbufferingclimate
changeimpacts(AppendixTable3).
4. SimulatedresultsforclimatechangeimpactsonChina'sagriculture
ThefollowingsectiondescribessimulatedresultsforclimatechangeimpactsonChina'sagriculturalproduction,prices,andtrade
basedontheCAPSiMandthelinkedCAPSiM-GTAPsimulationsin2015–2050.ComparingtheCAPSiMresultswiththebiophysical
impactsofclimatechangecanrevealtheresponseofdomesticmarketinbufferingclimatechangeimpacts.Thentheassessmenton
climatechangeimpactsconsideringtheresponseofglobaltradewillbediscussedbasedonthesimulationresultsfromthelinked
CAPSiM-GTAPmodel.Tothisend,percentagechangesindicatedinthetextrefertothedifferenceofagriculturalproduction,prices
andtradewithoutandwithclimatechange.
4Theself-sufficiencyrateisdefinedastheratioofdomesticfoodproductiontofoodsupply(productionplusnetimport)
5Themaizeimportquotaissetat7.2Mt.in2017,anda65%tariffwillbeimposedontheimportedmaizebeyondthequota.
6
W.Xieetal. China Economic Review xxx (xxxx) xxx–xxx
Table3
TheimpactsofclimatechangeoncropproductioninChinaunderRCP2.6and8.5(%).
RCP2.6 RCP8.5
CAPSiM-GTAP CAPSiM CAPSiM-GTAP
2050 2030 2050 2030 2050 2030 2050
Rice −0.27 −0.46 −0.28 −0.55 −0.30 −0.67 −0.21 −0.22
Wheat −0.92 −1.61 −0.97 −2.21 −1.95 −4.28 −1.92 −4.03
Maize 0.24 0.20 0.40 3.58 −0.11 −0.64 1.01 1.93
Soybean 0.38 0.29 1.48 2.98 0.00 −1.47 4.26 16.75
Cotton −0.48 0.74 −0.10 2.35 2.07 3.57 2.49 9.30
Oilseed 0.06 0.17 0.11 0.23 0.19 −0.10 0.41 0.72
Sugar −0.11 −0.21 −0.15 −0.45 −0.32 −0.66 −0.53 −1.53
Note:Thebaseyearis2012.
Source:CAPSiMandCAPSiM-GTAPsimulations.
4.1. ClimatechangeimpactsonChina'sagriculturalproduction
Climate change will have varying impacts on China's future crop production. From the CAPSiM simulations, rice, wheat, and
sugarwillhaveproductionlossesduetoclimatechangebothundertheRCP2.6andRCP8.5(Row1–2,Table3),whereinwheatis
projectedtohavethehighestproductionreductionby2050(−1.61%underRCP2.6and−4.28%underRCP8.5).Noticethatthe
climate change impacts on production of these crops are less than the yield losses estimated by the econometric model. Wheat
productionlossin2050underRCP8.5(4.28%)islessthanhalftheyieldlossduetoclimatechange(9.39%).Thisindicatesthatthe
domesticmarketevidentlyplaysanimportantroleindampeningclimatechangeimpacts.Whentheclimatechangehitscroppro-
duction,thefarmersimprovetheirproductionpracticesinlightoftheirpreviousexperienceundersimilarsituations,whichatleast
partially reduces the production losses caused by climate change. Farmers are likely to increase frequency and strength of field
management,suchasirrigation,weeding,adoptingdrought-resistantvarieties,amongothers.Theseresultssignifytheimportantrole
thatthedomesticmarketcanplayinbufferingclimatechangeimpacts.
Moreinterestingly,somecropswithpositiveyieldchangeswillenduphavingproductionreduction(Table3).Forexample,by
2050maizewillhaveslightyieldincreaseunderRCP8.5(0.31%,Table1),however,itsproductionisprojectedtodecreaseunder
RCP8.5(−0.64%,Table3).Themechanismatactionisthatriceandwheataremostlydomesticallyproducedandtheiryields,in
contrasttomaize,aremoreseriouslyaffectedbyclimatechangeinChina.Keepinginmindtheimportanceofriceandwheat,the
farmerswouldincreasetheirproductionbynotonlyimprovingfieldmanagement,butalsobytakingagriculturalinputs(e.g.,land
andlabor)awayfromthepositivelyaffectedcrops(likemaize).Asaresult,thepositiveimpactsofclimatechangeonmaizeyield
wouldbeoffsetbydeclininginputsoflandandlabor,andevenrendermaizeoutputtodecline.Moreover,bothsoybeanandoilseed
cropshaveslightlypositiveoutputimpactsduetoclimatechange,exceptin2050underRCP8.5(Table3).Similartomaize,the
substitutioneffectsbetweencropswouldoffsettheslightyieldincreaseforsoybeanandoilseedcropsbroughtbyclimatechange.In
20
ent 15 Physical impacts CAPSiM CAPSiM-GTAP
er
diff 10
der %)
e unos ( 5
n changscenari 0
o -5
cti
u
od -10
Pr
-15
Wheat Rice Maize Soybean
Fig.1.Comparisonofcropphysicalimpactsandproductionchanges(%)intheCAPSiMandCAPSiM-GTAPmodelin2050underRCP8.5(thebase
yearis2012).
7
W.Xieetal. China Economic Review xxx (xxxx) xxx–xxx
Table4
TheimpactsofclimatechangeoncroppriceinChinaunderRCP2.6and8.5(%).
RCP2.6 RCP8.5
CAPSiM CAPSiM-GTAP CAPSiM CAPSiM-GTAP
2030 2050 2030 2050 2030 2050 2030 2050
Rice 1.75 2.92 1.52 2.91 1.61 4.55 2.81 7.41
Wheat 3.85 6.83 3.71 7.17 5.49 15.47 8.56 22.91
Maize 0.16 0.31 0.23 6.35 0.00 0.23 2.95 8.86
Soybean −0.02 −0.02 1.64 6.73 −0.03 0.10 7.06 30.27
Cotton 0.28 −0.27 1.02 3.82 −0.58 −0.77 0.54 10.42
Oilseed −0.05 −0.15 0.11 0.42 −0.27 0.10 0.56 3.00
Sugar 0.24 0.32 0.24 0.58 0.23 0.51 0.81 2.06
Note:Thebaseyearis2012.
Source:CAPSiMandCAPSiM-GTAPsimulations
addition,cottonproductionwouldbenefitfromclimatechangeby2050byrelativelylowermarginsunderbothRCP2.6(0.74%)and
RCP8.5(3.57%).Thisisbecausecottonyieldincreasesaremuchlargeby2050(1.74%forRCP2.6and4.24%forRCP8.5)although
partlyoffsetbythesubstitutioneffects.
Further,theclimatechangeimpactsinothercountrieswillcausecrossborderrippleeffectsandwillfurthersoftentheimpactsof
climatechangeonChina'sagriculture(Fig.1).Forexample,whilesoybeanproductionin2050willdecreaseslightlyunderRCP8.5
(−1.47%)intheCAPSiMresults,thesameisprojectedtosignificantlyincrease(16.75%)intheCAPSiM-GTAPlinkagemodel.This
effectcouldbeattributedtooppositeimpactsofclimatechangeonsoybeanyieldsinChinaandtheothercountries.Whilesoybean
yieldisprojectedtoincreaseslightlyinChina(Table1),theyieldsformainexporters,suchasBrazil,Argentina,andUSA,areall
projectedtodecreasesignificantly(Table2).Soybeanoutputreductionintheaforementionedglobalexporterswouldcausesevere
shortageintheglobalmarket,whichwillfurtherincentivizethefarmersinChinatoimprovesoybeanproduction.Consequently,
China'ssoybeanproductionwouldexpandintheCAPSiM-GTAPresults.Asimilareffectofinternationaltradecanalsobefoundon
maize production, which has a slight decrease in the CAPSiM results in 2050 under RCP8.5 (−0.64%) but a slight increase in
CAPSiM-GTAPresults(1.93%)(Fig.1).AlthoughbothriceandwheatoutputswoulddeclineinCAPSiMsimulationunderRCP8.5,
theoutputreductionsintheCAPSiM-GTAPresultsarelowerthanthoseintheCAPSiMresults(Fig.1).Forexample,wheatoutput
wouldreduceby4.28%intheCAPSiMresultsin2050underRCP8.5,andby4.03%intheCAPSiM-GTAPresults.Thissetofresults
showsthatafterweconsidertheroleofinternationaltradeinclimatechangeassessment,thenegativeimpactsofclimatechangeon
China'sagriculturewillbefurtherreduced,atleastpartially.
4.2. ClimatechangeimpactsonChina'sagriculturalprices
Thepricesofthenegativelyaffectedcropsunderclimatechangewouldincreasesindomesticmarketby2030and2050both
underRCP2.6andRCP8.5.InCAPSiMsimulation,themarketclearingmechanismdictatesthatwhenclimatechangecausesyield
Table5
ImpactsofclimatechangeoncropnetimportunderRCP2.6and8.5(%).
RCP2.6 RCP8.5
CAPSiM CAPSiM-GTAP CAPSiM CAPSiM-GTAP
2030 2050 2030 2050 2030 2050 2030 2050
Rice 9.86 22.16 16.31 61.88 15.35 43.93 1.66 −50.37
Wheat 10.86 20.33 13.22 43.11 22.87 56.81 16.69 30.87
Maize −1.11 −0.47 −1.50 −10.87 0.64 1.69 −4.74 −1.70
Soybean −0.06 −0.05 −0.99 −3.31 −0.02 0.28 −3.75 −13.71
Cotton 0.60 −0.62 0.12 −1.97 −2.60 −3.00 −3.12 −7.81
Oilseed −0.11 −0.35 −0.15 0.80 −0.38 0.46 −0.62 0.14
Note:Thebaseyearis2012.
Source:CAPSiMandCAPSiM-GTAPsimulations
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W.Xieetal. China Economic Review xxx (xxxx) xxx–xxx
Table6
Impactsofclimatechangeoncropself-sufficientrateunderRCP2.6and8.5(absolutepercentchange).
RCP2.6 RCP8.5
CAPSiM CAPSiM-GTAP CAPSiM CAPSiM-GTAP
2030 2050 2030 2050 2030 2050 2030 2050
Rice −0.05 −0.11 −0.08 −0.29 −0.08 −0.21 −0.01 0.23
Wheat −0.24 −0.48 −0.28 −1.00 −0.50 −1.37 −0.37 −0.78
Maize 0.16 0.13 0.23 2.85 −0.09 −0.46 0.70 0.71
Soybean 0.06 0.04 0.31 0.77 0.00 −0.21 1.04 4.02
Cotton −0.27 0.34 −0.05 1.07 1.15 1.63 1.38 4.24
Oilseed 0.02 0.07 0.04 −0.08 0.08 −0.08 0.15 0.08
Sugar −0.06 −0.13 −0.08 −0.26 −0.18 −0.40 −0.27 −0.83
Note:Thebaseyearis2012.
Source:CAPSiMandCAPSiM-GTAPsimulations
reduction, domestic production of the crops will decrease, and consequently, the inadequate domestic supply will raise the local
prices.Rice,wheat,andsugarwouldhavetheirlocalpricetoincreasebyhighestmarginsinresponsetoyieldreductioncausedby
climatechange.Forexample,wheatwouldhavethelargestpriceincreasein2050ofaround6.83%underRCP2.6and15.47%under
RCP8.5(Table4),becauseitwouldexperiencetheworstyielddamage.Ricewillseeamoderatepricehikeby2050of2.92%under
RCP2.6and4.55%underRCP8.5.Moreover,thedomesticpricesofallothercropswillalsoincreasesin2050underRCP8.5except
forcotton.Consistentwithitspositiveyieldshock,cottonwouldhaveareductioninlocalpriceof0.58%in2030and0.77%in2050
underRCP8.5.However,whilemaizewillexperienceslightyieldincreaseunderbothRCP2.6andRCP8.6,itsdomesticpricefor
Chinawillincreasemarginally,mainlyduetothesubstitutioneffectsmentionedinsection4.1.
AscomparedtotheCAPSiMresults,thedomesticpricesforallthecropswillincreasebymuchhighermarginsifweconsiderthe
responseofinternationaltradeusinglinkedCAPSiM-GTAPmodel(Table4).Climatechangehavesignificantimpactsnotonlyoncrop
prices in China, but also on the crop prices in other countries. The global prices would increase sharply for the crops with high
negativeyieldchangesduetoclimatechangesuchthatChinawillbeunabletoimportthesecropsatthenewpricelevels.Asaresult,
the reduced supply will lead to a sharp rise in China's domestic crop prices. Our results show that domestic prices of wheat and
soybeanwouldfurtherincreasegreatlyinthelinkedCAPSiM-GTAPresults,mainlybecauseChina'smaintradingpartnerswillsuffer
moresevereyieldreductionforthesecrops.
4.3. ClimatechangeimpactsonChina'sagriculturaltradeandself-sufficiency
Inadditiontocropproductionandprices,climatechangewillalsosignificantlyaffectChina'stradeintheseagriculturalcom-
modities.IntheCAPSiMresults,thecropswithnegativeyieldshocks,especiallyriceandwheat,willseeincreaseintheirnetimports
in 2030 and 2050 (Table 5). Wheat is projected to have the most significant increase in net import in 2050 both under RCP 2.6
(20.33%)andRCP8.5(56.81%).Comparedwitharound4%productionreductionofwheatin2050underRCP8.5,theseemingly
largepercentageincrease(56.81%)inwheatnetimportisnotactuallylargeinvolumetermsaswheatimporthasverysmallsharein
China'stotalwheatdemand.Othercrops,includingcotton,oilseed,andsoybean,areexpectedtohaveslightreductionsintheirnet
importsinresponsetoclimatechange,astheirrespectiveyieldswouldincreaseslightlyinChina.
Ontheotherhand,netimportsofthecropsintheCAPSiM-GTAPresultsdifferfromthoseintheCAPSiMresults.ThoughChina's
domesticpricesofcropswouldriseduetoclimatechange,globalcroppriceswouldalsoincreaseduetoreducedproductioninseveral
majorproducingcountries.IftheglobalcroppricesincreasemorethantheincreaseinChina'scropprices,Chinawouldinevitably
reduceitsnetimportsofthecrops.Forexample,in2050underRCP8.5, China'snetimportofwheatisprojectedtoincreaseby
56.81%intheCAPSiMresults,buttheincreaseisreducedto30.87%intheCAPSiM-GTAPresults(Table5).Similartowheat,other
cropsalsohavelowernetimportsinthelinkedCAPSiM-GTAPresults,e.g.,China'snetimportforsoybeanwillfallby13.71%(>10
Mt)in2050underRCP8.5ascomparedto0.28%increaseofnetimportforsoybeanintheCAPSiMresults.
ThoughclimatechangewouldthreatenChina'sself-sufficiencyinmanyagriculturalcommodities,thecropself-sufficiencyrates
willincreasewhenconsideringtheclimateshocksinothercountries.Comparedtothebaselinescenario,cropsexperiencingnegative
yieldshockswillhavedecreasingself-sufficiencyratesintheCAPSiMresults(Table6).Amongthesecrops,wheathasthelargest
decreaseinself-sufficiencyratein2050(by0.48percentagepointsunderRCP2.6and1.37percentagepointsunderRCP8.5),which
isconsistentwiththefactthatwheathappenstobethecropwiththemostsignificantoutputreductionandnetimportincrease.
UnderRCP8.5scenario,allothercropswillhavelowerself-sufficiencyratesby2050comparedto2010,exceptforcotton,which
benefitsmostfromclimatechange.Theoverallself-sufficiencyrateofmajorcereals6in2050woulddecreaseby0.21percentage
pointsunderRCP2.6,and0.65percentagepointsunderRCP8.5.Ontheotherhand,intheCAPSiM-GTAPresults,allcropswould
have higher self-sufficiency rates as compared to the corresponding numbers in the CAPSiM results. For example, soybean's self-
6Majorcerealsincluderice,wheat,andmaize.
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W.Xieetal. China Economic Review xxx (xxxx) xxx–xxx
sufficiencyratewouldincreaseby0.46percentagepoints(0.77–0.31)in2050underRCP2.6and2.98percentagepoints(4.02–1.04)
underRCP8.5whenconsideringtheclimateshocksinothercountries.Theseresultsfurthershowthatwhenconsideringtheclimate
shocksinothercountries,China'sagriculturalself-sufficiencywillincrease.
5. Conclusionsandpolicyimplications
Agriculture,animportantsectorinChina,ismandatedtofeedover1.3billionpeopleofthecountryandprovideimportantinputs
formanyindustries.Suchprospect,however,islikelytobethreatenedbytheyielddamagescausedbyclimatechange.Theprevious
studiesonclimatechangeeffectsonagricultureinChinadidnotaccountforthebufferingcapabilityoflocalmarketandinternational
trade.Tofillthisgapintheliterature,weassessclimatechangeimpactsonChina'sagricultureandresponsesfrommarketandtrade
usinganagriculturalpartialequilibriummodel,CAPSiM,anditslinkagemodelwithGTAPmodel(CAPSiM-GTAP).Inthispaper,the
climatechangeimpactsareexaminedduring2020–2050underRCP2.6andRCP8.5scenarios.Ourresultsshowthatclimatechange
wouldhavesignificanteffectsonagricultureproductionofChinabutwithlargevariationsamongcrops.Undertheworstclimate
changescenario,i.e.,RCP8.5,wheatproductionisprojectedtodeclinebyaround9.4%by2050,thebiggestproductionreduction
amongthecrops.Theresultsalsosuggestsomeevidenceoftheadaptationcapabilityofmarketresponsetoclimatechangewherein
farmersintensifyagronomicinputs,improvefieldmanagementandadjustproductionstructure.Whenweaddthemarketresponseto
the mix, production loss for wheat under RCP8.5 reduces to only 4.3%. Global agricultural trade provides additional adaptation
capability to climate change damage for China, where the country can further avoid crop production losses and raising its self-
sufficiencyof important food crops,at leastpartly. Whenconsideringboth domestic market andinternationaltrade responsessi-
multaneously,wheatproductionlossunderRCP8.5wouldreducefurthertoaround4%.
Ourresultshaveimportantpolicyimplicationsfornationaladaptationplans.First,theadaptationpoliciesshouldprioritizethe
cropsbasedontheseverityofproductionlosses.Specifically,theinvestmentsinadaptationmeasuresshouldbechanneledtomore
negativelyaffectedcropsandtotheonesthatplaymorevitalroleinnationalfoodsecurity.Secondly,thepoliciesfacilitatingmarket
integrationandfreetradewouldhelptobufferclimatechangeimpacts.Ingeneral,whenclimatechangestrikes,farmersintrinsically
increaseagronomicinputs(labor,irrigation,pesticide,andothers)toadapttoclimatechange,becausetheyexpecthighpricesin
lightoftheirpreviousexperienceofhighpriceduetoclimatechange.Moreso,ifthedomesticmarketandinternationaltradearefree
of distortions and barriers, wherein the price will increase to some reasonable extent in times of climate change. Then in the
subsequentcropseason,farmerswillincreaseinputsashighastheycantopreventproductionlossesbasedontheirexperiencewith
the price increase during previous climate changes. On the contrary, if the market is cluttered with interventions or the trade is
restricted,farmerscannotexperiencegeneralpricechangeduetopreviousclimatechanges,andwhenclimatecontinuestochange,
theymaynotincreaseinputstothatextent.Thus,inadditiontothehardmeasuresforadaptation(suchasinvestmentinirrigation
system),thesoftmeasures(e.g.reducingmarketintervention,reducingimporttariffsandimportquotasorothertradebarriers)are
recommendedinordertoreduceproductiondamagescausedbyclimatechange.Thirdly,tooptimizeadaptationplans,weneedto
learn more from farmers who respond to changing climate according to the market and trade signals, and then improve and
mainstreamthepracticesadoptedbyfarmersintonationaladaptationdevelopmentplans.Thefarmer'sadaptationmeasurescarried
bythemselvesaremuchimportantinadaptingtoclimatechange,includingincreasingnumberofirrigationsandotherfieldman-
agementmeasures.Theonlythingweneedtodoistokeepmarketsfreeandremovetradebarriers.
Acknowledgements
TheauthorsacknowledgetheirrespectivefinancialsupportsfromMinistryofScienceandTechnology,China(2012CB955700),
NationalNaturalSciencesFoundationofChina(71503243;71873009;71333013),NSFC-CGIAR(71161140351),AustralianCentre
forInternationalAgriculturalResearch(ADP/2010/070),andNationalSocialScienceFundofChina(16AJL009).
10