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David Castells-Quintana, Universitat Autònoma de Barcelona

15-06-2022

Inequality and climate change: the within-countries distributional effects of global warming

 

Abstract:

Climate change is already impacting several development outcomes, including economic growth, human health and mortality, agricultural productivity and even conflict. Moreover, the impact of climate change is expected to be unevenly distributed across locations and population groups. In particular, the worse effects of climate change are expected to be felt in low-income countries. Similarly, within countries, the most vulnerable to these effects are typically low-income regions and households. While the literature to date has provided evidence of the between-countries inequality-increasing effect of global warming, it has not yet done so for inequality within countries. In this paper, we empirically explore the connection between climate change and income distribution within countries. To do so, we build a global dataset combining gridded data on climate variables with gridded data on population and country-level data on income inequality. Using panel-data econometric techniques, we find a clear positive and statistically significant relationship between rising temperatures and increasing inequality at country level. This role of rising temperatures is robust to several controls and different specifications and estimation techniques.