Achieving Sustainability in a World with Climate Change


Student thesis: Doctoral Thesis

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Awarding Institution
Award date11 Aug 2021


Climate change has become a global issue and has profound implications on economic activity and human development inevitably, which attracts concerns from a wide range of stakeholders. The development of regional and international policies to combat global climate change is increasingly a challenge for scholars and policymakers. This thesis aims to assess how to achieve sustainability in a world with climate change through the approach of mitigation and adaptation in the presence of natural resources limitation.

Chapter 2 considers the management of quality-related water shortages and provides an economic investigation into the underlying causes of industrial wastewater emissions. The study further examines the direct and the structural break-induced effect of national environmental regulation on industrial wastewater emissions. The results show that strict environmental regulation can partially offset the energy-induced effects imposed by the scale effects of FDI and cause positive behavioural responses by either limiting coal usage or improving upon coal usage technology and shift towards clean energy sources.

In addition, global climate change has forced many countries around the world to make efforts to develop clean or renewable energy. Global warming has an impact on the availability of water. The decline in water availability can either stimulate the innovation and development of water conservation technologies or result in a reduction in the usage of water-related technologies. Chapter 3 investigates how a change in natural resources affects production technology in a regulated industry. In particular, it addresses the challenge of achieving sustainable electricity generation given the constraints imposed by water scarcity. This chapter finds significant plant-level technology substitution in response to water scarcity: decrease in water availability causes the decline in hydro power generation, while the increase in nuclear and coal generation. The decrease in hydro power generation cannot be fully offset by the increase in nuclear and coal generation, which leading to electricity shortages. These results imply a hidden increase in carbon emission lead by technology substitution.

From the perspective of adaptation to climate change, Chapter 4 is related to the regional management of resource-wide water scarcity induced by climate change. This chapter mainly studies the impact of climate change on agricultural water use efficiency in China and specifically addresses the volatility and regional disparity of the impact of climate change over time and across regions. The results reveal that, overall, climate change indeed decreases agricultural water efficiency. However, I find that when the information on damage is observable, the negative effect of climate change on AW efficiency can be alleviated.

On the other hand, climate change is an indicator of business opportunities to reshape investment decision-making as well. Chapter 5 provides empirical evidence to what extent climate risks affect the greenfield foreign direct investment at the international city level. To do this, it is necessary to understand the role of technology and governance play in building a modern city with climate resilience. Thus, this chapter highlights the role of smart cities on multinationals’ investment decisions via attenuating the adverse influence of relative risk of climate change. The findings suggest that the relative smartness of the host city empowered by new technologies makes it capable to promote sustainable development and more resilient to prepare for future shocks of climate change.

    Research areas

  • Climate Change, Mitigation, Adaptation, Stringent Environmental Regulation, Natural Resources Limitation, Power Outage, Smart Cities, Climate Resilience