The impact of climate change on the sustainable development of regional economy

Abstract

Global warming has aroused the attention all over the world, because not only can it directly damage the living environment, but it can also impact on the social and economic development, of a region in an obvious and far-reaching way. In this paper, we builded a trans-log production function model incorporating variables, such as rainfall, labor force, technology and temperature to simulate how climate changes impacted on the regional economics. Time series data of the domestic economy of Nanjing, a city in the southeast China, between 1996 and 2017, were used to verify the production theory of trans-log production frontier. The results showed that: with the rainfall increased and the temperature declined, the climate impact on the economy and the absolute value of the output elasticity of the frontier diminished. In addtion, the climate change was also positively related to the capital investment. The larger variation of temperature negatively impacted on the economic development.