O7E.4 Estimating economic impact of heat on china’s labor productivity: new evidence from a CGE model

High heat exposure and heat-related health impacts is a well-known occupational health hazard. Though recent studies have quantified high heat impacts on labor productivity in occupational group, little is known about the scale of economic impacts of labor productivity losses, resulting in inadequate policy response. Besides, sectors that suffer most from heat, such as agriculture, service and construction, have extensive inter-dependent relationship with other sectors in the economy. Therefore, it is also important to include these indirect impacts, to avoid the underestimation of the economy-wide impacts. Computable general equilibrium (CGE) model can capture direct and indirect economic impact of heat on labor productivity and do the comprehensive analysis. In this study, we used WBGT to estimate future labor productivity changes. Meanwhile we employed a China dynamic CGE model (CHEER) with 2012 as base year in the paper to investigate the economic impacts of heat on labor productivity and to find out the specific sectors’ losses and the whole-economy losses in China. Taking temperature projections (daily maximum temperature, daily minimum temperature, and daily average temperature) under RCP scenario, population projections (demographic age structure and employment structure) under SSP scenario in China as input and dividing China’s economic sector into 22 sectors in our model, we analyzed 22 sectors’ economic impacts in the long term. Based on these scenarios, our study quantifies the full scope of economic impact of heat on labor productivity and analyze the changes of GDP, specific sectors output and industrial structure in the future. Our study could contribute to the understanding of social cost of carbon in China. A range of measures for different economic sectors were also suggested to reduce future economic loss from heat in China. Future research needs were discussed at the end of the paper.