A new paper challenges the idea that all people in the future will be more affluent than previous generations. The tweaked model suggests that unequal effects of climate change can slow the economic growth of poor people, and in some cases even halt growth altogether.
“If climate impacts are borne mostly by the poor, then the future poor will, in fact, be very poor indeed,” Dennig said in his email. “Even while the average income is growing inexorably, climate change would be exacerbating inequality and hindering poverty reduction.”
There’s no national carbon-pricing scheme in the U.S., although the government has produced several estimates for the social cost of carbon using existing models (which do not take such inequalities into account). Currently, the most widely acknowledged estimate is $37 per ton, which many economists feel is an underestimate already.
The results from this paper further suggest that these estimates should be revised upward, taking income inequalities and potential disproportionate impacts of climate change into account.
In the meantime, Dennig suggested that further work should focus on gaining a better understanding of just how unequal the future effects of climate change will be. The scenarios assumed in his modified model, which assumed the poor would suffer a higher proportion of damages, were theoretical, even if many climate experts would agree that there’s a high probability this will be the case in many places.
Such work will be important to national governments looking for the best ways to slash their carbon output in the future, particularly if an international emissions reduction agreement is reached at the UN climate conference ongoing in Paris.
Producing the most accurate estimates for the social cost of carbon will, in turn, inform more effective and faster-acting emissions reduction schemes in the future. And that could make all the difference to subsequent generations, whose future, if this paper has anything to say about it, could be in greater jeopardy than we thought.