Although China and the United States are the two largest emitters of greenhouse gases, China’s emissions on a per capita basis are significantly lower than those of the U.S.: in 2005, per capita emissions in China were 5.5 metric tons—much less than the U.S. (23.5 metric tons per capita), and also lower than the world average of 7.03 metric tons. China’s total GHG emissions were 7,234.3 million tons of CO2 equivalent (tCO2e) in 2005, 15.4 percent of which came from the agricultural sector. By comparison, total U.S. emissions were 6,931.4 million tCO2e, 6.4 percent of which were from agriculture. Within China’s agriculture sector, 54.5 percent of emissions come from nitrous oxide, and 45.5 percent come from methane, which is the opposite of the composition of global GHG emissions from agriculture.

Economic studies show that climate change will affect not only agricultural production, but also agricultural prices, trade and food self-sufficiency. The research presented here indicates that producer responses to these climate- induced shocks will lessen the impacts of climate change on agricultural production compared to the effects predicted by many natural scientists. This study projects the impacts of climate change on China’s agricultural sector under the A2 scenario developed by the Intergovernmental Panel on Climate Change (IPCC), which assumes a heterogeneous world with continuous population growth and regionally-oriented economic growth. Depending on the assumptions used related to CO2 fertilization, in 2030 the projected impacts of climate change on grain production range from -4 percent to +6 percent, and the effects on crop prices range from -12 percent to +18 percent. The change in relative prices in domestic and international markets will in turn impact trade flows of all commodities. The magnitude of the impact on grain trade in China will equal about 2 to 3 percent of domestic consumption. According to our analysis, trade can and should be used to help China mitigate the impacts of climate change; however, the overall impact on China’s grain self-sufficiency is moderate because the changes in trade account for only a small share of China’s total demand.

The effect of climate change on rural incomes in China is complicated. The analysis shows that the average impact of higher temperatures on crop net revenue is negative, but this can be partially offset by income gains resulting from an expected increase in precipitation. Moreover, the effects of climate change on farmers will vary depending on the production methods used. Rain-fed farmers will be more vulnerable to temperature increases than irrigated farmers, and the impact of climate change on crop net revenue varies by season and by region.

In recent years, China has made tangible progress on the implementation of adaptation strategies in the agricultural sector. Efforts have been made to increase public investment in climate change research, and special funding has been allocated to adaptation issues. An experiment with insurance policies and increased public investment in research are just two examples of climate adaptation measures. Beyond government initiatives, farmers have implemented their own adaptation strategies, such as changing cropping patterns, increasing investment in irrigation infrastructure, using water saving technologies and planting new crop varieties to increase resistance to climatic shocks.

China faces several challenges, however, as it seeks to reduce emissions and adapt to climate change. Fertilizers are a major component of nitrous oxide emissions, and recent studies indicate that overuse of fertilizer has become a significant contributor to water pollution. Application rates in China are well above world averages for many crops; fields are so saturated with fertilizer that nutrients are lost because crops cannot absorb any more. Changing fertilizer application practices will be no easy task. Many farmers also work outside of agriculture to supplement their income and opt for current methods because they are less time intensive.

In addition, the expansion of irrigated cropland has contributed to the depletion of China’s water table and rivers, particularly in areas of northern China. Water scarcity is increasing and will constrain climate change mitigation strategies for some farmers. One of the main policy/research issues—as well as challenges for farm households—will be to determine how to increase water use efficiency.

Despite the sizeable amount of greenhouse gases emitted by and the environmental impact of China’s agriculture sector, it also offers important and efficient mitigation opportunities. To combat low fertilizer use efficiency in China, the government in recent years has begun promoting technology aimed at calibrating fertilizer dosages according to the characteristics of soil. In addition, conservation tillage (CT) has been considered as a potential way to create carbon sinks. Over the last decade, China’s government has promoted the adoption of CT and established demonstration pilot projects in more than 10 provinces. Finally, extending intermittent irrigation and adopting new seed varieties for paddy fields are also strategies that have been supported and promoted as part of the effort to reduce GHG emissions.

A concept note about setting up an international program for studying the effects of the emergence of biofuels on global poverty and food security. 

The recent global expansion of biofuels production is an intense topic of discussion in both the popular and academic press. Much of the debate surrounding biofuels has focused on narrow issues of energy efficiency and fossil fuel substitution, to the exclusion of broader questions concerning the effects of large-scale biofuels development on commodity markets, land use patterns, and the global poor. There is reason to think these effects will be very large. The majority of poor people living in chronic hunger are net consumers of staple food crops; poor households spend a large share of their budget on starchy staples; and as a result, price hikes for staple agricultural commodities have the largest impact on poor consumers. For example, the rapidly growing use of corn for ethanol in the U.S. has recently sent corn prices soaring, boosting farmer incomes domestically but causing riots in the streets of Mexico City over tortilla prices. Preliminary analysis suggests that such price movements, which directly threaten hundreds of millions of households around the world, could be more than a passing phenomenon. Rapid biofuels development is occurring throughout the developed and developing world, transforming commodity markets and increasingly linking food prices to a volatile energy sector. Yet there remains little understanding of how these changes will affect global poverty and food security, and an apprehension on the part of many governments as to whether and how to participate in the biofuels revolution.

We propose an international collaborative effort to:

• Understand and quantify the effects of expanding biofuels production on agricultural commodity markets, food security, and poverty;
• Develop training programs and policy tools to harness the benefits and mitigate the damages from such expansion on both local and global scales; and
• Build an international network of scholars and government officials devoted to studying and managing biofuels development and its social consequences

As water becomes scarcer in northern China, designing policies that can induce water users to save water has become one of the most important tasks facing China's leader. Past water policies may not be a solution for the water scarcity problem in the long run. This paper looks at a new water policy: increasing water prices so as to provide water users with direct incentives to save water. Using a methodology that allows us to incorporate the resource constraints, we are able to recover the true price of water with a set of plot level data. Our results show that farmers are quite responsive if the correct price signal is used, unlike estimates of price elasticities that are based on traditional methods. Our estimation results show that water is severely under priced in our sample areas in China. As a result, water users are not likely to respond to increases in water prices. Thus as the first step to establishing an effective water pricing policy, policy makers must increase water price to the level of VMP so that water price reflects the true value of water, the correct price signal. Increases in water prices once they are set at the level of VMP, however, can lead to significant water savings. However, our analysis also shows that higher water prices also affect other aspects of the rural sector. Higher irrigation costs will lower the production of all crops, in general, and that of grain crops, in particular. Furthermore, when facing higher irrigation costs, households suffer income losses. Crop income distribution also worsens with increases in water prices.

In summary, our paper provides both good news and bad news to policy makers. On the one hand, water pricing policies obviously have great potential for curbing demand and helping policy makers address the emerging water crisis. On the other hand, dealing with the negative production and income impacts of higher irrigation cost will pose a number of challenges to policy makers. In other words, if China's leaders plan to increase water prices to address the nation's water crisis, an integrated package of policies will be needed to achieve water savings without hurting rural incomes or national food security.

In China there is a growing debate on the role of cultivated land conversion on food security. This paper uses satellite images to examine the changes of the area of cultivated land and its potential agricultural productivity in China. We find that between 1986 and 2000 China recorded a net increase of cultivated land (+1.9%), which almost offset the decrease in average potential productivity, or bioproductivity (-2.2%). Therefore, we conclude that conversion of cultivated land has not hurt China's national food security. We also argue that more recent change in cultivated area likely has had little adverse effect on food security.