The distributional impact of climate change on rich and poor countries

Mendelsohn, Robert; Dinar, Ariel; Williams, Larry J.

doi:10.1017/s1355770x05002755

Cited by 551 publications

(299 citation statements)

References 28 publications

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“…Although limited, the available empirical evidence indicates that the poor are likely to suffer disproportionate damage from climate change, and thus that the value of ξ is likely less than 1 (21)(22)(23)(24), and even negative for certain types of damage (25). ** There are two key normative parameters in climate-economy models.…”

Section: Making Rice Nicementioning

confidence: 99%

Inequality, climate impacts on the future poor, and carbon prices

Dennig

Budolfson

Fleurbaey

et al. 2015

Proc. Natl. Acad. Sci. U.S.A.

175

132

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Integrated assessment models of climate and the economy provide estimates of the social cost of carbon and inform climate policy. We create a variant of the Regional Integrated model of Climate and the Economy (RICE)-a regionally disaggregated version of the Dynamic Integrated model of Climate and the Economy (DICE)-in which we introduce a more fine-grained representation of economic inequalities within the model's regions. This allows us to model the common observation that climate change impacts are not evenly distributed within regions and that poorer people are more vulnerable than the rest of the population. Our results suggest that this is important to the social cost of carbon-as significant, potentially, for the optimal carbon price as the debate between Stern and Nordhaus on discounting.T he most prominent debate on cost-benefit evaluation of climate policy has been on the discount rate (see, e.g. refs. 1-4).* One of the important principles this debate has highlighted is that the effect of climate impacts are discounted when they are borne by more affluent-future-generations. † However, despite Schelling's early remarks (9) that this principle should also apply across contemporaries with different levels of affluence, the interaction between climate impacts and economic inequality has only been studied by looking at inequality between regions (10, 11). This is potentially an important oversight, because in leading cost-benefit integrated assessment models (IAMs) much of the poverty associated with high levels of vulnerability is masked by regional averaging of economic variables. ‡ In light of this, we modify a leading climate-economy model, Regional Integrated model of Climate and the Economy (RICE), to include what is known about economic inequality within regions and countries. This representation of economic inequality allows us to investigate the effect on optimal policy of different assumptions about the distribution of damages by economic strata. § When subregional differences are modeled in this way, several policy-relevant aspects of the model can change dramatically even when other assumptions and parameters from RICE are held constant. As we show below, even when RICE regional damage functions are used to establish the damage level of each region, the distribution of damage within regions can cause some members of future generations to be less affluent than their current counterparts. { If the distribution of damage is less skewed to high incomes than the distribution of consumption, then weak or no climate policy will result in sufficiently large damages on the lower economic strata to eventually stop their welfare levels from improving, and instead cause them to decline. This paints a different picture from the standard narrative in leading cost-benefit IAMs, where regional average consumptions continue to grow even under business-as-usual (BAU).The implications for policy recommendations are striking, both by the standard utilitarian metric and by metrics of sustainability (18) and just...

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Section: Making Rice Nicementioning

confidence: 99%

Inequality, climate impacts on the future poor, and carbon prices

Dennig

Budolfson

Fleurbaey

et al. 2015

Proc. Natl. Acad. Sci. U.S.A.

175

132

View full text Add to dashboard Cite

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“…Whereas the relationship between environmental conditions and economic performance is debated (4)(5)(6)(7)(8)(9)(10)(11)(12) it is central to cost-benefit analyses of environmental policies, such as the global regulation of greenhouse gases (13)(14)(15)(16)(17)(18). In this study, the economic histories of geographically and economically similar Caribbean and Central American countries are analyzed to understand whether year-toyear variations in surface temperature and tropical cyclones (hurricanes and tropical storms) could be responsible for countrylevel economic fluctuations.…”

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confidence: 99%

“…The magnitude, structure, and coherence of these responses support the hypothesis that the underlying mechanism is a reduction in the productivity of human labor when workers are exposed to thermal stress. The ergonomics and physiology of thermal stress in humans is well studied (21)(22)(23)(24)(25)(26), but has been absent from previous integrated assessments of global climate change impacts (13)(14)(15)(16)(17)(18).…”

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confidence: 99%

Temperatures and cyclones strongly associated with economic production in the Caribbean and Central America

Hsiang

2010

Proc. Natl. Acad. Sci. U.S.A.

759

487

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Understanding the economic impact of surface temperatures is an important question for both economic development and climate change policy. This study shows that in 28 Caribbean-basin countries, the response of economic output to increased temperatures is structurally similar to the response of labor productivity to high temperatures, a mechanism omitted from economic models of future climate change. This similarity is demonstrated by isolating the direct influence of temperature from that of tropical cyclones, an important correlate. Notably, output losses occurring in nonagricultural production (–2.4%/+1 °C) substantially exceed losses occurring in agricultural production (–0.1%/+1 °C). Thus, these results suggest that current models of future climate change that focus on agricultural impacts but omit the response of workers to thermal stress may underestimate the global economic costs of climate change.

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“…The region has severe problems related to marginalization aggravating vulnerability, especially in small municipalities that rely mostly on mono-agriculture. Climate change impacts fall disproportionately on people that have contributed the least to cause the climate change problem and have the least resources to cope with it (Mendelsohn et al 2006). For these people, food security is an issue of major concern, because climate change will affect crop yields and agriculture (Parry and Carter 1998;Met Office et al 2011).…”

Section: Discussionmentioning

confidence: 99%

Socio-economic vulnerability to climate change in the central mountainous region of eastern Mexico

Esperón-Rodríguez

Bonifacio-Bautista

Barradas

2015

Ambio

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Climate change effects are expected to be more severe for some segments of society than others. In Mexico, climate variability associated with climate change has important socio-economic and environmental impacts. From the central mountainous region of eastern Veracruz, Mexico, we analyzed data of total annual precipitation and mean annual temperature from 26 meteorological stations and from General Circulation Models. We developed climate change scenarios based on the observed trends with projections to 2025, 2050, 2075, and 2100, finding considerable local climate changes with reductions in precipitation of over 700 mm and increases in temperature of *9°C for the year 2100. Deforested areas located at windward were considered more vulnerable, representing potential risk for natural environments, local communities, and the main crops cultivated (sugarcane, coffee, and corn). Socio-economic vulnerability is exacerbated in areas where temperature increases and precipitation decreases.

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The distributional impact of climate change on rich and poor countries

Cited by 551 publications

References 28 publications

Inequality, climate impacts on the future poor, and carbon prices

Inequality, climate impacts on the future poor, and carbon prices

Temperatures and cyclones strongly associated with economic production in the Caribbean and Central America

Socio-economic vulnerability to climate change in the central mountainous region of eastern Mexico

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