For Whom the Bell Tolls: Climate Change and Inequality

May 27, 2022

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Format: Chicago

Serhan Cevik, and João Tovar Jalles. For Whom the Bell Tolls: Climate Change and Inequality, (USA: International Monetary Fund, 2022) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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.

Subject: Climate change, Environment, Income distribution, Income inequality, National accounts

Keywords: Climate change, Climate change adaptation, Climate change vulnerability, Global, Income distribution, Income equality, Income growth, Income inequality, Income redistribution

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2022/103
Stock No:

WPIEA2022103
ISBN:

9798400208126
ISSN:

1018-5941

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