Climate Change and The Uncertainty of CO2 Fertilization: Possible Effects on China's Grain Trade

This study analyzes the potential impact of climate change and the uncertainty of CO2 fertilization on China's corn, wheat and rice domestic agricultural markets and the international markets out to the year 2050. The study provides a brief background and reviews research literature of climate change effects on China's crop yields. The paper presents the potential impact of climate change on China's yields and attempts to quantify the domestic and global market impacts. The analysis has four scenarios, which assumes two future levels of greenhouse gas emissions with the effects of CO2 fertilization and no CO2 fertilization. A 27 country commodity partial equilibrium simulation mathematical programming model (PEATSim) is used for this analysis. Results indicate under CO2 fertilization, which increases yields, China's grain imports may decrease leading to a decrease in international prices. Under no CO2 fertilization, yields decrease, China's grain imports may increase leading to increased international prices.