Persistent inequality in economically optimal climate policies

Benefit-cost analyses of climate policies by integrated assessment models have generated conflicting assessments. Two critical issues affecting social welfare are regional heterogeneity and inequality. These have only partly been accounted for in existing frameworks. Here, we present a benefit-cost...

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Bibliographic Details
Published in:Nature communications Vol. 12; no. 1; pp. 3421 - 10
Main Authors: Gazzotti, Paolo, Emmerling, Johannes, Marangoni, Giacomo, Castelletti, Andrea, Wijst, Kaj-Ivar van der, Hof, Andries, Tavoni, Massimo
Format: Journal Article
Language:English
Published: London Nature Publishing Group UK 08.06.2021
Nature Publishing Group
Nature Portfolio
Subjects:
704/844/2739
704/844/682
704/844/843
Assessments
Climate change
Climate models
Climate policy
Cooperation
Cost benefit analysis
Economic analysis
Economics
Environmental impact
Environmental policy
Global temperatures
Heterogeneity
Humanities and Social Sciences
Inequality
International cooperation
Mitigation costs
multidisciplinary
open climate campaign
Regional development
Science
Science (multidisciplinary)
ISSN:2041-1723, 2041-1723
Online Access:Get full text
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Summary:Benefit-cost analyses of climate policies by integrated assessment models have generated conflicting assessments. Two critical issues affecting social welfare are regional heterogeneity and inequality. These have only partly been accounted for in existing frameworks. Here, we present a benefit-cost model with more than 50 regions, calibrated upon emissions and mitigation cost data from detailed-process IAMs, and featuring country-level economic damages. We compare countries’ self-interested and cooperative behaviour under a range of assumptions about socioeconomic development, climate impacts, and preferences over time and inequality. Results indicate that without international cooperation, global temperature rises, though less than in commonly-used reference scenarios. Cooperation stabilizes temperature within the Paris goals (1.80 ∘ C [1.53 ∘ C–2.31 ∘ C] in 2100). Nevertheless, economic inequality persists: the ratio between top and bottom income deciles is 117% higher than without climate change impacts, even for economically optimal pathways. Benefit-cost analyses of climate policies have generated conflicting assessments; as social welfare is affected by regional heterogeneity. Here the authors show that economically optimal pathways are consistent with climate stabilization but are characterized by persistent economic inequalities due to climate damages.
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ISSN:2041-1723
2041-1723
DOI:10.1038/s41467-021-23613-y