Distributional impacts of carbon pricing in developing Asia

Steckel, Jan Christoph; Dorband, Ira Irina; Montrone, Lorenzo; Ward, Hauke; Missbach, Leonard; Hafner, Fabian; Jakob, Michael; Renner, Sebastian

doi:10.1038/s41893-021-00758-8

Cited by 56 publications

(27 citation statements)

References 30 publications

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“…There have been many recent studies of the impact of climate policies on poverty and equity (Goulder et al 2019;Soergel et al 2021a, b;Steckel et al 2021). Our study featured a flexible demand system with large coverage of consumer goods, as well as a set of national scenarios and the latest national policy pathways.…”

Section: Strengths and Limitationsmentioning

confidence: 99%

Poverty and inequality implications of carbon pricing under the long-term climate target

et al. 2022

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Many countries have taken stringent climate policies to minimize the risks by climate change. But these policies could burden households and the poor with the extra costs and threaten their wellbeing. However, the consequences of climate policies on poverty and welfare loss are seldom presented in stringent long-term climate change mitigation projections. Carbon pricing is a cost-effective approach; how it affects households varies among countries. This study investigated the distributional effects and poverty implications of carbon pricing in China during the transition towards carbon neutrality and the Paris Agreement’s long-term goals. We assessed multiple poverty and equity standards in future scenarios with a newly developed integrated assessment model. It was found that climate change mitigation efforts would not greatly hinder poverty alleviation in China, with the poverty headcount under the $3.2/cap/day-threshold being less than 0.3 million people in 2050 in most scenarios. A carbon tax became a regressive factor mainly due to price increases in food and energy goods. This indicates that the distributional effects on carbon pricing should be considered. For example, supplementary policies that compensate for price changes, such as subsidies and early mitigation actions, that lead to modest price increases in the long term are worthy of consideration as valid instruments for the just transition towards the 2 °C or even 1.5 °C pathway.

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Section: Strengths and Limitationsmentioning

confidence: 99%

Poverty and inequality implications of carbon pricing under the long-term climate target

et al. 2022

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“…Changes in the pattern of metal demand may bring new risks to the supply of renewable power. The production of coal, oil, and natural gas needed for traditional power generation is mainly concentrated in the Middle East and the United States 51,52 . Our results show that the metals needed for renewable power are mainly extracted in Latin American, Africa, and Other Asia.…”

Section: Discussionmentioning

confidence: 99%

Tracing Metal Footprints Through Global Renewable-Power Value Chains

Peng

Wang

et al. 2022

SSRN Journal

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“…Second, if these technologies are privately owned their financing will benefit disproportionately the high end of the income distribution that owns companies which might be very profitable (ownership effect). Since the carbon tax is expected to produce mostly regressive outcomes [15][16][17] and equity ownership is almost exclusively concentrated in the top of the income distribution, both mechanisms can lead to significant inequality which can erode the support and desirability of ambitious climate goals.…”

Section: Mainmentioning

confidence: 99%

Inequality repercussions of financing negative emissions

Andreoni

Emmerling

Tavoni³

2022

Preprint

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Negative emission technologies are attracting the interest of investors in the race to make them effective and profitable. When deployed at scale, negative emissions will need to be financed through carbon tax revenues or issuing other taxes. Financing negative emissions could thus reduce the fiscal resources needed for a socially inclusive transition. Moreover, if negative emissions are privately owned their profits will disproportionally benefit investors and equity holders. We quantify the inequality repercussions of negative emission through an integrated assessment model which features within-country income heterogeneity and direct air capture of CO2. We find that negative emissions technologies deployed by private actors contribute to more than half of the increase in income inequality observed in a 1.5°C scenario. The effects are concentrated around the time of net-zero and are higher in scenarios with carbon budget overshoot. We attribute regional variations to two main mechanisms, the revenue drying and private ownerships effects of negative emissions.

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Distributional impacts of carbon pricing in developing Asia

Cited by 56 publications

References 30 publications

Poverty and inequality implications of carbon pricing under the long-term climate target

Poverty and inequality implications of carbon pricing under the long-term climate target

Tracing Metal Footprints Through Global Renewable-Power Value Chains

Inequality repercussions of financing negative emissions

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