Persistent inequality in economically optimal climate policies

Paolo Gazzotti, Johannes Emmerling, Giacomo Marangoni, Andrea Castelletti, Kaj-Ivar van der Wijst, Andries Hof, Massimo Tavoni*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

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.
Original languageEnglish
Article number3421
Pages (from-to)1-10
JournalNature Communications
Volume12
Issue number1
DOIs
Publication statusPublished - Dec 2021

Bibliographical note

Funding Information:
The research leading to these results has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 821124 (NAVIGATE) and No. 776479 (COACCH). The usual caveat applies.

Publisher Copyright:
© 2021, The Author(s).

Keywords

  • Climate-change impacts
  • climate-change mitigation
  • environmental economics

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