| Popis: |
Summary: Concerns have been raised against using carbon pricing for fighting climate change, as these might disproportionally affect lower-income households and thus increase inequality. However, the distributional implications of climate policies will depend on policy design and their capacity to reduce climate change impacts. To quantify the interaction between climate policy and climate benefits on economic inequality, we develop a numerical climate-economic framework featuring both within- and between-country income heterogeneity. We implement a well-below 2°C target and examine a variety of redistributive schemes. We find that climate change impacts increase economic inequalities within and across countries. Climate policy reduces this increase by half, and an appropriate transfer scheme targeted at low-income households can eliminate it altogether. An equal per-capita redistribution scheme leads to most of the population being economically better off already today. The analysis shows the importance of including climate-economic benefits in the evaluation of climate policies. Science for society statement: Inequality and climate change are two key, and interlinked, challenges for the 21st century. We find that climate policies on their own are likely to increase inequality. A “climate dividend” or redistributing carbon revenues to households, however, can more than offset this inequality increase, allowing for a reduction in global inequality. Because climate impacts are likely to increase in the future, leading to further economic disparities, the inequality-improving effect of attaining Paris Agreement goal of keeping global warming below 2°C increases even further. In essence, the research underscores the importance of considering the impact of climate policies on inequality and demonstrates that well-designed strategies can simultaneously combat climate change and reduce economic disparities. Moreover, we find that the well-below 2°C target can make a large majority of about 58% of the world’s population better off than without strong climate action, already by 2030. |
