Impacts of climate change on net crop revenue in North and South China

Purpose – The purpose of this paper is to explore the impacts of climate change on crop net revenue by region. Particularly, the authors focus on the impact differences between north and south regions. Design/methodology/approach – The authors applied the Ricardian approach which assumes that each farmer wishes to maximize revenue subject to the exogenous conditions of their farm. The climate data are based on actual measurements in 753 national meteorological stations and the socio-economic data covers 8,405 farms across 28 provinces in China. Findings – On average, the rise of annual temperature will hurt farms both in the north or south. The impacts of climate change on both precipitation and temperatures have different seasonal impacts on producers in the north and the south of China. As a consequence, the impact on net farm revenues varies with farms in the north and the south being adversely affected (to different degrees) by a rise in the temperature, but both benefiting from an anticipated increase in rainfall. The results also reveal that irrigation is one key adaption measure to dealing with climate change. Whether in the north or south of China, increasing temperature is beneficial to irrigated farms, while for rainfed farms, higher temperature will result in a reduction in net revenues. The results also reveal that farms in the north are more vulnerable to temperature and precipitation variation than that in the south. Irrigated farms in the south are more vulnerable to precipitation variation than that in the north; but rainfed farms in the north are more vulnerable to precipitation variation than that in the south. Originality/value – Applying empirical analysis to identify the differences of climate change impacts between north and south regions will help policy makers to design reasonable adaptation policies for various regions.