Creating a consistent model framework to evaluate climate loss and damage is crucial for effective policy-making in climate change mitigation and adaptation. A recent research paper by Jie Liu, Xiangzhen Shi, Li Yang, and others explores the assessment of climate damage in China within an integrated framework.
Historically, climate damage assessments have primarily focused on market sectors, while giving less attention to non-market sectors have received less attention. This disparity highlights inconsistencies in sector. This imbalance highlights inconsistencies in sector coverage and significant uncertainties in estinating parameters within sector damage modules, indicating room for improvement.
This study aims to estimate climate losses in eight major sectors in China, adjust sector-specific climate damage functions and parameters, and differentiate between direct, market, and overall climate losses.
To achieve this, the study introduces a comprehensive Integrated Assessment Model (IAM) framework for evaluating climate damage in China. The BCC-SESM climate model and FUND sectoral climate damage model, under the SSP2-RCPs scenario, are utilized.
The FUND model is used to assess the impact of climate change on various sectors, refine climate damage functions and parameters, covering both market and non-market sector loss assessments. The sector-specific damage functions and parameters of the FUND model version 3.6 have been enhanced in this study by incorporating the latest literature and data.
The BCC-SESM model is a simplified climate model developed based on the Beijing Climate Center Climate System Model CMIP5 dataset. It provides climate projections for China until the year 2100, including data on temperature rise, atmospheric CO2 concentration, and sea-level rise. This model adopts standardized Shared Socioeconomic Pathways (SSPs) and Representative Concentration Pathways (RCPs) to suit the spatial scale of China.
Using a bottom-up approach, the research estimates climate damage across eight major sectors, recalibrates sectoral climate damage functions and parameters for China, and distinguishes between direct climate loss, market climate loss, and aggregate climate loss.
The findings show that the total climate damage function for China follows a quadratic pattern in response to temperature rise. By 2050, under RCP2.6, RCP4.5, and RCP8.5, the projected climate damage is estimated to be 5.4%, 5.7%, and 8.2% of GDP, respectively.
Moreover, both direct and market climate losses are projected to remain below 2% of GDP by 2050, while the aggregate climate loss could reach as high as 8.2%, primarily driven by non-market sectors.
From a sectoral perspective, under the RCP8.5 scenario, human health damage is projected to constitute the largest share (61.9%) of the total climate loss by 2050, followed by sea-level rise damage (18.6%). This study emphasizes the importance of adaptation policies that prioritize non-market sectors, specifically focusing on human health and sea-level rise.
