For Whom the Bell Tolls: Climate Change and Inequality

For Whom the Bell Tolls: Climate Change and Inequality
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Volume/Issue: Volume 2022 Issue 103
Publication date: May 2022
ISBN: 9798400211720
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Topics covered in this book

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Economics- Macroeconomics , Economics / General , Environmental Economics , climate change vulnerability , climate change adaptation , income redistribution , income equality , income growth , Income inequality , Climate change , Income distribution , Global

Summary

Climate change is the defining challenge of our time with complex and evolving dynamics. The effects of climate change on economic output and financial stability have received considerable attention, but there has been much less focus on the relationship between climate change and income inequality. In this paper, we provide new evidence on the association between climate change and income inequality, using a large panel of 158 countries during the period 1955–2019. We find that an increase in climate change vulnerability is positively associated with rising income inequality. More interestingly, splitting the sample into country groups reveals a considerable contrast in the impact of climate change on income inequality. While climate change vulnerability has no statistically significant effect on income distribution in advanced economies, the coefficient on climate change vulnerability is seven times greater and statistically highly significant in the case of developing countries due largely to weaker capacity for climate change adaptation and mitigation.