Model results of the impact of climate change on agriculture in China

This paper assesses the impact of climate change on China's agricultural production at a cross-provincial level using the Ricardian approach, incorporating a multilevel model with farm-level group data. The farm-level group data includes 13379 farm households, across 316 villages, distributed in 31 provinces. The empirical results show that, firstly, the marginal effects and elasticities of net crop revenue per hectare with respect to climate factors indicated that the annual impact of temperature on net crop revenue per hectare was positive, and the effect of increased precipitation was negative when looking at the national totals; secondly, the total impact of simulated climate change scenarios on net crop revenues per hectare at a Chinese national total level, was an increase of between 79 USD per hectare and 207 USD per hectare for the 2050s, and an increase from 140 USD per hectare to 355 USD per hectare for the 2080s. As a result, climate change may create a potential advantage for the development of Chinese agriculture, rather than a risk, especially for agriculture in the provinces of the Northeast, Northwest and North regions. However, the increased precipitation can lead to a loss of net crop revenue per hectare, especially for the provinces of the Southwest, Northwest, North and Northeast regions.

Model experiment on optimal size of a fish stock with environmental uncertainties

We analyze the effect of environmental uncertainties on optimal fishery management in a bio-economic fishery model. Unlike most of the literature on resource economics, but in line with ecological models, we allow the different biological processes of survival and recruitment to be affected differently by environmental uncertainties. We show that the overall effect of uncertainty on the optimal size of a fish stock is ambiguous, depending on the prudence of the value function. For the case of a risk-neutral fishery manager, the overall effect depends on the relative magnitude of two opposing effects, the 'convex-cost effect' and the 'gambling effect'. We apply the analysis to the Baltic cod and the North Sea herring fisheries, concluding that for risk neutral agents the net effect of environmental uncertainties on the optimal size of these fish stocks is negative, albeit small in absolute value. Under risk aversion, the effect on optimal stock size is positive for sufficiently high coefficients of constant relative risk aversion.