A majority of the global population, particularly low-income households, could economically benefit from climate policies already by 2030 if well-implemented. A CMCC study just published in the new open-access journal Cell Reports Sustainability sheds light on the consequences of climate policies on global inequality and suggests how to foster economic equality while taking action on climate.

In a new paper, just published in the first issue of the new journal by the publisher Cell Press, entitled “Global inequality consequences of climate policies when accounting for avoided climate impacts”, CMCC researchers unveil crucial findings on the interlinked challenges of inequality and climate change for the 21st century.

Key insights from the research include:

The study combines scenarios of population dynamics, economic growth, and inequality projections and finds that the recent trend of global inequality being dominated by inequality within countries is likely to continue during the 21st century. That is, while countries could converge, economic disparities will be dominated by inequality within countries.

Climate policies and inequality are highly interlinked. The study finds that climate policies, when implemented in isolation, are likely to exacerbate global inequality. However, the introduction of a “climate dividend” or redistributing carbon revenues to households can offset this increase in inequality, ultimately leading to a reduction in global inequality.

The research delves in particular into the impact of mitigation costs, climate impacts, and redistribution schemes. The study demonstrates that well-designed climate policies, including a global carbon tax and redistribution schemes, can lead to progressive outcomes, with the lower-income parts of the population benefit the most from avoided climate impacts and targeted redistributions.

The distributional implications are also highly relevant for social acceptance and support for climate policies. The research analyzes the winners and losers of climate policies, considering economic impacts across different countries and income groups. It reveals that, by mid-century, a majority of the global population (58%), particularly low-income households, can benefit from well-implemented climate policies, already by 2030.

Johannes Emmerling, Senior Scientist at CMCC and lead author of the study, comments, “Our research underscores the intricate relationship between climate change and inequality. By implementing well-designed strategies, we have the potential to not only combat climate change but also foster economic equality. The choices we make today will shape a more sustainable and just future for generations to come.

For the specific case of Italy, results suggest that a climate dividend would improve the economic impact of keeping the Paris Agreement Well-below 2 degree target of about half of the population by 2030, while due to relatively high expected impacts, already by 2050, everyone will be better off if the climate mitigation target is kept.”

TThe findings of the article, published in Cell Reports Sustainability, have broad implications for policymakers, environmental advocates, and economists working towards a more sustainable and equitable world.

Link to the article