Climate change impacts are more costly for the poorest

This global study published in the Journal of Environmental Economics and Management and co-authored by SPARCCLE researchers Johannes Emmerling and Francesco Granella examines how climate change impacts vary across income groups within countries on a global scale. The research shows that the poorest individuals within countries are projected to suffer the most severe economic impacts of climate change.

To analyse this, the study introduced a new method to estimate the income elasticity of climate impacts, providing crucial input for climate policy analysis. This method combines multiple climate impact models with detailed income distribution data, offering a more comprehensive view of potential future inequalities.

“Our research reveals that climate change is not just a global issue, but a deeply local one too. We found that within each country, it’s often the poorest who are most vulnerable to climate impacts. This underscores the urgent need for climate policies that not only reduce emissions but also address these potential inequalities,” explains Johannes Emmerling, Senior Scientist at CMCC.

“Notably, we found that the potential large impact on GDP, confirmed also in other recent studies, amounts to almost zero on average for the richest 10% of people within countries. This is because insurance and different adaptation options are more readily available and accessible for richer households,” adds Emmerling.

Globally, the study shows how for every 1% increase in income, climate damages decrease by about 0.4% (i.e., an elasticity of 0.6), indicating that damages fall disproportionately on the poor. Furthermore, vulnerability to rising temperatures tends to decrease along income deciles within countries. By 2100, climate change could increase the Gini index (a measure of inequality within a population) by up to 6 points in some countries, particularly in Sub-Saharan Africa and the Middle East.

“It’s crucial that we consider adaptation gaps and distributional effects when designing climate adaptation and mitigation strategies,” concludes Francesco Granella (CMCC), co-author of the study.

Adapted from a press release by CMCC. Read the original article here.

For more information:

Gilli, M., Calcaterra, M., Emmerling, J., & Granella, F. (2024). Climate change impacts on the within-country income distributions. Journal of Environmental Economics and Management, 103012(127). https://doi.org/10.1016/j.jeem.2024.103012