18 May 2021 – by Evelyn Workman
It is well understood that less economically developed countries will be impacted harder by climate change compared to more developed countries. However, climate action to combat climate change could also worsen poverty by increasing prices for basic necessities, i.e. land-mitigation measures could drive up food prices. In addition, at the international level, a uniform carbon price would lead to higher relative policy costs for developing countries.
A new study has examined the ways in which climate policies could also help to reduce extreme poverty, rather than exacerbate it. The study’s researchers at the Potsdam Institute for Climate Impact Research in Germany found that if socioeconomic efforts to reduce global poverty are continued at the current rate, then 350 million people globally will remain in poverty by 2030, with a large majority of them in Sub-Saharan Africa.
The study predicts that ambitious climate policies introduced to meet the targets of the Paris Climate Agreement could push this number up by 50 million. However, the authors stress that if ‘progressive redistribution’ is considered in climate policies, this could instead lead to a small reduction in global poverty by about 6 million people. ‘Progressive redistribution’ means that countries would redistribute revenues from carbon tax back to all their citizens implemented as an equal-per-capita climate dividend.
However, despite this overall decrease in global poverty, the researcher calculated that this ‘progressive redistribution’ strategy could result in sub-Saharan Africa becoming poorer, with 10 million more people in this region being pushed into extreme poverty. To counteract this negative consequence to sub-Saharan African countries, the authors suggest the implementation of an international finance scheme whereby developed countries redistribute 5% of their carbon carbon revenues to sub-Saharan countries. This scheme could result in 30 million less people in extreme poverty in sub-Saharan Africa, and 45 million less people globally in extreme poverty, by 2030, compared to the current trends.
This research highlights the importance of considering other sustainable development goals (i.e. eradicating extreme poverty) when undertaking climate action, in order to achieve climate change mitigation in a fair and equitable way for all people.
