LATEST RESEARCH

Climate change impacts increase economic inequality: evidence from a systematic literature review (published in Environmental Research Letters)

Aurélie Méjean, Peron Collins-Sowah, Céline Guivarch, Franziska Piontek, Bjoern Soergel, Nicolas Taconet

While it is widely assumed that poor countries will suffer more from climate change, and that climate change will exacerbate inequalities within countries, systematic and large-scale evidence on this issue has been limited. In this systematic literature review, we examine and synthesize the evidence from the literature. Drawing from 127 individual papers, we find robust evidence that climate change impacts indeed increase economic inequality and disproportionately affect the poor, both globally and within countries on all continents. This result is valid across a wide range of physical impacts, types of economic inequality, economic sectors, and assessment methods. Furthermore, we highlight the channels through which climate change increases economic inequality. While the diversity of different approaches and metrics in the existing literature base precludes extracting a universal quantitative relation between climate change and economic inequality for use in future modelling, our systematic analysis provides an important stepping stone in that direction. 

Climate action with revenue recycling has benefits for poverty, inequality, and wellbeing (published in Nature Climate Change)

Mark Budolfson, Francis Dennig, Frank Errickson, Simon Feindt, Maddalena Ferranna, Marc Fleurbaey, David Klenert, Ulrike Kornek, Kevin Kuruc, Aurélie Méjean, Wei Peng, Noah Scovronick, Dean Spears, Fabian Wagner, Stéphane Zuber

Existing estimates of optimal climate policy ignore the possibility that carbon tax revenues could be used in a progressive way; model results therefore typically imply that near-term climate action comes at some cost to the poor. Using the Nested Inequalities Climate Economy (NICE) model, we show that an equal per capita refund of carbon tax revenues implies that achieving a 2 °C target can pay large and immediate dividends for improving well-being, reducing inequality and alleviating poverty. In an optimal policy calculation that weighs the benefits against the costs of mitigation, the recommended policy is characterized by aggressive near-term climate action followed by a slower climb towards full decarbonization; this pattern—which is driven by a carbon revenue Laffer curve—prevents runaway warming while also preserving tax revenues for redistribution. Accounting for these dynamics corrects a long-standing bias against strong immediate climate action in the optimal policy literature. 

Climate change and population: An assessment of mortality due to health impacts (published in Ecological Economics)

Antonin Pottier, Marc Fleurbaey, Aurélie Méjean, Stéphane Zuber 

We develop a model of population dynamics accounting for the impact of climate change on mortality through five channels (heat, diarrhoeal disease, malaria, dengue, undernutrition). An age-dependent mortality, which depends on global temperature increase, is introduced and calibrated. We consider three climate scenarios (RCP 6.0, RCP 4.5 and RCP 2.6) and find that the five risks induce deaths in the range from 135,000 per annum (in the near term) to 280,000 per annum (at the end of the century) in the RCP 6.0 scenario. We examine the number of life-years lost due to the five selected risks and find figures ranging from 4 to 9 million annually. These numbers are too low to impact the aggregate dynamics but they have interesting evolution patterns. The number of life-years lost is constant (RCP 6.0) or decreases over time (RCP 4.5 and RCP 2.6). For the RCP 4.5 and RCP 2.6 scenarios, we find that the number of life-years lost is higher today than in 2100, due to improvements in generic mortality conditions, the bias of those improvements towards the young, and an ageing population. From that perspective, the present generation is found to bear the brunt of the considered climate change impacts. 

Catastrophic climate change, population ethics and intergenerational equity (published in Climatic Change)

Aurélie Méjean, Antonin Pottier, Marc Fleurbaey, Stéphane Zuber

Climate change threatens irreversible and dangerous impacts, possibly leading to extinction. The most relevant trade-off then may not be between present and future consumption but between present consumption and the mere existence of future generations. To investigate this trade-off, we build an integrated assessment model that explicitly accounts for the risk of extinction of future generations. Using the class of number-dampened utilitarian social welfare functions, we compare different climate policies that change the probability of catastrophic outcomes yielding an early extinction. We analyse the role of inequality aversion and population ethics. Low inequality aversion and a preference for large populations favour the most ambitious climate policy, although there are cases where the effect of inequality aversion on the preferred policy is reversed. This is due to the fact that a higher inequality aversion both decreases the welfare loss of reducing consumption of the current generation and also decreases the welfare gain of reducing the future risk of extinction.