A new assessment of climate-related economic risks in China warns that if global temperatures rise by more than 2°C after 2040, the country could face annual economic losses exceeding 5% of its GDP.
Source: Yicai Global
A new assessment of climate-related economic risks in China warns that if global temperatures rise by more than 2°C after 2040, the country could face annual economic losses exceeding 5% of its GDP. The report highlights human health impacts and rising sea levels as the primary drivers of the anticipated increase in climate-related losses. The findings were published in the latest issue of Population, Resources and Environment in China (Vol. 35, 2025). The research was conducted by experts from several leading institutions, including the Global Energy Interconnection Development and Cooperation Organization (GEIDCO), the Business School of the University of Chinese Academy of Social Sciences, and the Earth System Modeling Center of the China Meteorological Administration.
While countries such as the U.S. and those in the EU have already undertaken extensive cross-sectoral climate loss assessments, similar studies on climate loss in China have been relatively scarce. Significant differences in research methods, sectoral impact assessments, and data consistency have made it difficult to compare results across studies. As temperatures rise in the coming decades, these risks are expected to intensify, with varying levels of impact across different regions and sectors.
The study categorizes climate-related losses into two main areas: market-based and non-market-based impacts. Market-based losses primarily affect sectors like agriculture, forestry, water resources, and energy, while non-market-based losses include the effects of sea level rise, public health deterioration, and ecosystem damage.
The research indicates that including the non-market impacts could lead to a 25% increase in total estimated losses. One of the most pressing findings from the study is the rapid increase in health-related climate risks, particularly from heat-induced cardiovascular and respiratory diseases. The researchers call for more detailed studies to refine the understanding of these health risks, which could help policymakers design more effective strategies to address both climate change and public health challenges.
Additionally, the report warns that sea level rise will continue to expand the risks to China’s coastal ecosystems, economy, and society, and these impacts will be difficult to reverse. The study recommends that policymakers prioritize long-term planning for coastal infrastructure and industry, incorporating projections of future sea level rise to avoid long-term damage.
To mitigate these risks, the researchers suggest several key actions:
Enhance research on adaptation policies and their associated costs to reduce potential climate-related damages.
Establish an early warning system to provide targeted weather forecasts and climate risk alerts for key sectors such as energy, health, coastal management, agriculture, and water resources.
Strengthen adaptation efforts in vulnerable regions and sectors, particularly for populations at risk, to support China’s broader goals of sustainable development and ecological preservation.
The report underscores the urgent need for coordinated action to build resilience against climate impacts, as the costs of inaction will continue to grow.
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