Mining Rents, Climate Extremes, and Water Stress in China: An Econometric Assessment of Emissions and Water-Related Climate Vulnerability

Mining-intensive economies face increasing pressure to align resource extraction with the Paris Agreement and water-related Sustainable Development Goals. This study examines how mining rents, extreme climatic events, and institutional factors jointly shape anthropogenic greenhouse gas emissions, water stress, and flood-related climate vulnerability in China. The study employs a multi-decadal Chinese dataset and uses advanced econometric techniques to capture the dynamic interactions between mining intensity, climatic conditions, institutional capacity, and the three dimensions of vulnerability. Long-run ARDL results show that (i) emissions are highly persistent and amplified by economic growth and flood frequency but partially mitigated by stronger climate readiness and governance, (ii) water availability exhibits mean-reversion while mining intensity increases water stress unless moderated by effective governance, and (iii) flood damages adjust rapidly over time, with mining intensifying hydroclimate vulnerability. Additionally, higher climate readiness and institutional quality significantly weaken the damage intensity of mining and flood-related shocks. The results further show that mining activity and water availability act as a key upstream driver, while hydrometeorological variability and climate extremes represent downstream forces. Flood events and ENSO conditions (current and lagged) emerge as the strongest predictors of logarithmic flood damage per capita, followed by adaptive capacity (ND-GAIN) and, to a smaller extent, mineral rents, income, urbanization, and governance indicators. Partial-dependence tests revealed that estimated flood damages per capita increase systematically with flood frequency and more severe ENSO conditions, supporting the hypothesis that hazard frequency is the primary mechanism of loss, albeit moderated by adaptation capacity and development factors. This study offers policy-relevant insights for reconciling China’s developing pattern with the targets of both the Paris Agreement and SDG-consistent water management.