LDE workshop 7-8 May 2013
The urban-rural divide, air pollution and
climate policy
The role of inequality, migration and
social reforms in economic and climate
perspectives.
Solveig Glomsrød,
CICERO Center for International Climate and
Environmental Research - Oslo
China’s
Development
is
“Unbalanced
Uncoordinated
Unsustainable”
中国发展的
“不均衡、
不协调、
不可持续”
2
Imbalances
• Urban-rural income
gap 3.13 (in 2011)
• Poverty (100 million
rural people)
• Investment and export
driven economy
• Credit market –
interest rate regulated
• Population growth –
age structure
Urban - rural income gap
• In 2011 the average urban income
was 3.13 times average rural income.
• Urban income includes income of
both registered urban residents and
rural work migrants
Income and population 2011, floating in urban
population
250
800
700
18
600
230
Income, billion Yuan
57
500
150
400
657
100
133
300
Population, million
200
Without floating
Wage, floating
Others, local urban
Wage, local urban
Without floating
Floating
Local urban
461
200
50
100
46
0
0
Income
population
Income
Population
Urban
Urban
Rural
Rural
Income and population 2011, floating in rural
population
200
1000
180
900
160
57
230
800
700
140
600
120
500
100
400
80
60
133
657
461
40
300
200
100
46
0
0
Income
population
Income
Population
Urban
Urban
Rural
Rural
Without floating
Others, local urban
Wage, local urban
Floating
Without floating
Local urban
18
20
Population, million
Income, billion Yuan
Wage, floating
Per capita Income level and gap 2011
35000
4.50
4.04
4.00
30000
3.50
3.13
25000
20000
2.50
2.00
15000
10000
28886
1.50
21810
1.00
5000
6977
7148
0
0.50
0.00
Floating in urban
Floating in rural
Income gap, urban/rural
Income per capita, Yuan
3.00
Urban
Rural
Income gap
Rural family decision tree
Rural family
utility
ehr=0.5
Sub-utility of rural
household in the
village
Sub-utility of
rural migrants
ehf=1.57
rur=1.57
Leisure
Leisure
Agricultural
good
(self-supply)
Non-agricultural
good
Agricultural Non-agricultural
good
good
Modeling behaviour of rural
households in a CGE for China
• Pilot CGE model, numerical policy
experiments
• Separate urban-rural economies
• Rural-urban work migration
• New decision tree for the rural population
• Policy experiment: Increase wage rate of
work migrants in the cities by 10 per cent
Percentage change in total and
factor income by household group.
Poverty reduction and climate policy
How does policies work?
A carbon tax on fossil fuel
• Urban sector more fossil based than the rural
sector, production contracts
• Reduced demand for rural labour in the cities
• Rural labour return to agriculture
• Increased food production
• Lower food prices, reduced costs of living
• Urban real wage is rising (enhancing work
migration)
Different consumption pattern
rural –urban households
Biomass production
• Garlic –a
seasonal crop
• Follows after
cotton
• Cotton bushes
removed to
give place for
garlic
• Last cotton output
picked in the village
byold, women and
children
• Residues used for
bioenergy
• Fuel collected
outside the gate
Burnt in the kitchen or in the
yard
Particles of local and global concern
• From biomass, coal
and diesel motors
• Damage health
• Heats the atmosphere
• Very short lived
• Biomass burning deeply rooted in the
agricultural production
system.
• Persistent?
To sum up:
• Rural labour has one foot in each of the
”economies” making the labour market and
effect of policies volatile
• Rural work migrants and their rural families take
their decisions jointly- but have different
lifestyles
• Appropriate income segments - a precondition
for analysis of climate policy, economic growth,
and poverty.