Link Between Climate Change and Inequality

Climate Change and Economic Inequality are deeply intertwined issues that perpetuate and exacerbate each other. Climate change not only impacts the environment but also has far-reaching consequences on economies and societies, particularly those already facing economic disparities.

Within countries, people living in poverty and other disadvantaged groups – including indigenous peoples and small landholders, are disproportionately exposed to climate change. A majority of people in these groups live in rural areas and are highly dependent on agricultural, fishing, and other ecosystem-related income. Their lives and livelihoods are finely attuned to environmental conditions that are now changing rapidly. 

In recent decades, global economic growth has lifted millions out of extreme poverty and reduced inequalities between countries. But unmanaged climate change threatens to set back that progress by damaging poverty eradication efforts worldwide, and disproportionately affecting the poorest regions and people. A World Bank report estimated that an additional 68 to 135 million people could be pushed into poverty by 2030 because of climate change. 

Effects of Climate Change

The effects of climate change are experienced to varying degrees across and within countries due to differences in exposure, susceptibility, and coping capacities. If left unaddressed, climate change will lead to increased inequality both within and among countries and could leave a substantial part of the world further behind. Developing countries, particularly Small Island Developing States, face disproportionate risks from an altered climate, while high-income countries are generally less vulnerable and more resilient.

Within countries, people living in poverty and other vulnerable groups – including smallholder farmers, indigenous peoples, and rural coastal populations – are more exposed to climate change and incur greater losses from it, while having fewer resources with which to cope and recover. Climate change can generate a vicious cycle of increasing poverty and vulnerability, worsening inequality, and the already precarious situation of many disadvantaged groups.

The effects of climate change are distributed unevenly, so too are the policies designed to counter them. As countries take climate action, there will be trade-offs to consider between the positive and negative effects of adaptation measures and distributional impacts.

Economic Inequality

People’s opportunities in life and the future of their children are largely shaped by their income and wealth. Now five years into implementation, the 2030 Agenda has focused the attention of the international community on the predicament of growing economic inequality. Real and sustained progress in addressing it however has eluded most countries. 

The economic inequality has been on the rise in most high-income countries over the past 30 years but has declined in several low- and middle-income countries. Where inequality has risen, increases have been largely due to the rapid rise in top incomes. Even though economic inequality among countries has declined, it is still more pronounced than that observed within countries. 

Inequality levels and trends vary greatly by country. Income inequality among countries is declining. After a prolonged period of rising international inequality, the relative gap in mean national incomes is shrinking. Strong economic growth in Asia has been the main driver of this decline.

Despite this positive trend, absolute disparities among countries are still very large. The average income of people living in the European Union is 11 times higher than that of people in sub-Saharan Africa; the income of people in Northern America is 16 times higher than that of sub-Saharan Africans.

While low-income countries are growing faster than high-income countries, the absolute gap between the mean per capita incomes of high- and low-income countries increased from about $27,600 in 1990 to over $42,800 in 2018. The distinction between relative and absolute inequality is not merely of academic interest: perceptions that inequality is rising globally often refer to absolute differences. 

People perceive and experience absolute inequalities in their daily lives, in terms of living conditions and well-being. The aim to see the Goals and targets of the 2030 Agenda met ‘for all nations and peoples’ calls for a reduction of these absolute gaps.

Promoting Adaptation and Resilience

Addressing climate change and economic inequality requires systemic change that prioritizes social and environmental justice. This includes policies that support marginalized communities in adapting to the impacts of climate change, as well as efforts to reduce inequality and promote sustainable development for all. Only by addressing these interconnected issues can we create a more equitable and sustainable future for all.

An equitable transition towards green economies calls for integrating climate goals with social and economic policies aimed at reducing vulnerability, supporting those affected by climate change, and creating decent jobs. At the international level, climate finance, technological transfer, and capacity-building can support developing countries in implementing a just transition.

In parallel to reducing emissions, adaptation policies must be put in place to decrease the exposure of the most vulnerable populations to climate change impacts. The devising rules regulating construction in risky areas, such as flood zoning, land entitlement, and building standards. The poorest communities must be provided with better health services and new insurance mechanisms.

As the poorest tend to be excluded from the decision-making process, there is always a risk of underinvestment in actions that would be particularly beneficial to them. Policies need to be tailored to ensure they do not impose undue financial constraints on those who have the fewest resources. 

Policymakers must guarantee that adaptation policies will actually benefit those most in need and will not be hijacked by the wealthiest or by political interests. Another idea of interest is the creation of adaptation funds that would ensure technological transfers from rich countries, which produce most patents, to poorer ones.

Conclusion

Jointly tackling climate change and inequality reductions requires paying attention to the intricate links between these issues. Limiting climate change is essential to reduce the risks it would impose, notably on the poorest. 

To design climate policies the recognition that individuals and countries differ in their ability to cope with climate change impacts is essential. Poorly designed policies risk amplifying existing inequalities, but just transitions to low carbon and more resilient economies can foster more equal societies.