Climate Impact Assessments With a Lens on Inequality

• DOI: 10.1177/1070496518774098
• Date: 01 September 2018
• Author: Marco V. Sánchez
• Published date: 01 September 2018
• Subject Matter: Articles

Article

Climate Impact

Assessments With

a Lens on Inequality

Marco V. Sa

´nchez

1

Abstract

Climate impact assessments inform climate change discussions. Integrated use of

biophysical and economic models made it possible to move from assessments exclu-

sively focused on the physical impacts, to assessments that incorporate the prospect-

ive effects on human welfare. Effects on poverty and livelihoods are better

understood. However, even though structural inequalities exacerbate exposure

and vulnerability to climate change, the nexus between climate change and inequality

remains underresearched. We suggest ways to feature inequalities prominently in

climate impact assessments hoping to encourage new research. We suggest how to

use modeling capability to explore how existing inequalities may worsen in the face

of climate hazards, through perturbation of natural resource systems, unemployment

of production factors, a lack of access to human capital and basic services, and

socioeconomic attributes that place people at a disadvantage. We also point to

the policy analysis that one can develop and areas to improve it going forward.

Keywords

climate change, inequality, impact assessment, policy modeling, biophysical models,

economic models, scenario analysis

The discussion of impacts of climate change remained for quitesome time focused

on the physical impacts. It took some time for researchers across dif‌ferent dis-

ciplines to broaden the focus of the analysis to include socioeconomic impacts.

Journal of Environment &

Development

2018, Vol. 27(3) 267–298

!The Author(s) 2018

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DOI: 10.1177/1070496518774098

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1

Agricultural Development Economics, Food and Agriculture Organization of the United Nations, Rome,

Italy

Corresponding Author:

Marco V. Sa

´nchez, Agricultural Development Economics, Food and Agriculture Organization of the

United Nations, Viale delle Terme di Caracalla, 00153 Rome, Italy.

Email: marco.sanchezcantillo@fao.org

The World Health Organization (WHO; 1990) addressed the potential health

impacts of climate change as early as 1989. During the timeframe of the f‌irst

assessment reports of the Intergovernmental Panel on Climate Change (IPCC) in

the 1990s, there was also the recognition of distributional concerns in climate

research (Rao, Van Ruijven, Riahi, & Bosetti, 2017).

Broader evidence on the prospective ef‌fects on human welfare emerged more

clearly until the 2000s. Studies began to combine the use of dif‌ferent modeling

tools to look at the biophysical and socioeconomic impacts together. The litera-

ture interchangeably calls these studies integrated climate impact assessments,

climate impact assessments, or integrated assessments.

Within this literature, the ef‌fects of climate change on poverty and livelihoods

receive special attention (e.g., Brainard, Jones, & Purvis, 2009; Carvajal-Velez,

2007; Hughes, Irfan, Moyer, Rothman, & Solo

´rzano, 2012; Skouf‌ias, 2012;

Stern, 2006; United Nations Economic Commission for Africa, 2010;

World Bank, 2002, 2008; among others). Recent research focuses on how the

mechanisms through which climate change af‌fects poverty and livelihoods work

in practice. Hallegatte et al. (2014) identify prices, assets, productivity, and

opportunities as four critical channels through which households may move in

and out of poverty in the presence of climate change. In their contribution to the

Fifth Assessment Report of the IPCC (AR5), Olsson et al. (2014) provide an

extensive review of evidence, from cross-sectional statistical analyses as well as

case studies, which demonstrates there is a dynamic interaction between climate

change, poverty, and livelihoods. Hallegatte et al. (2016) examine the magnitude

of future climate change impacts on poverty as these are channeled through food

prices and production, natural disasters, health, and labor productivity.

Despite the emerging literature, the AR5 identif‌ies gaps with regard to the

distributional concerns that are still seen today (Rao et al., 2017). The nexus

between climate change and inequality within countries remains relatively

underresearched or inadequately studied. This is quite surprising, given the

strong association among inequality, poverty, and the exposure and vulnerabil-

ity of individuals and societies to climate change. This gap in the literature is all

the more worrisome, given the long-term and continuous increase in the within-

country component of global inequality (Lakner & Milanovic, 2013).

According to IPCC (2014), exposure to climate change refers to thepresence of

people (including their livelihoods), ecosystems and species, or economic, social,

or cultural assets in places that could be adversely af‌fected by climate hazards.

Vulnerability is def‌ined as the propensity or predisposition to be adversely

af‌fected, which encompasses sensitivity or susceptibility to harm and a lack of

capacity to cope and adapt. Conforming to these def‌initions, exposure and vul-

nerability are determined implicitly by the conditions of poverty, marginalization,

and social exclusion as they af‌fect specif‌ic population groups.

Only recently has the role of inequality per se gained visibility in the climate

discussion. Skouf‌ias (2012) had noted the regressive nature of climate change

268 Journal of Environment & Development 27(3)

impacts in the context of Brazil, where these impacts tend to af‌fect relatively

more the poor than the rich. Olsson et al. (2014, p. 796) argued that ‘‘socially

and geographically disadvantaged people exposed to persistent inequalities at

the intersection of various dimensions of discrimination based on gender, age,

race, class, caste, indigeneity, and (dis)ability are particularly negatively af‌fected

by climate change and climate-related hazards.’’ Disproportionate erosion of

physical, human, and social assets as a result of climate change and climate-

related hazards exacerbates inequalities and places these people even at more of

a disadvantage (Olson et al., 2014).

The recognition that inequality should be a key element in the climate discus-

sion warrants an additional discussion on the methodologies that are available to

address the issue of how climate change and climate-related hazards exacerbate

inequalities. This article argues that, despite the methodological advances, inte-

grated climate impact assessments are not signif‌icantly addressing inequalities

within countries, evenif these inequalities inf‌luence the exposure and vulnerability

of people to climate hazards. The article discusses ways to integrate existing

modeling frameworks for more prominent and adequate exploration of within-

country inequalities in integrated climate impact assessments.

The remainder of the article contains four sections. The second section dis-

cusses how the link between climate change and inequality began to be estab-

lished using quantitative analyses and points to their limitations. The third

section brief‌ly describes the standard use of modeling tools in integrated climate

impact assessments and discusses the critical areas where the scope of these

assessments needs to be expanded for improving the analysis of within-country

inequalities. This section lays the groundwork for a deeper understanding, in the

fourth section, of ways to explore dif‌ferent dimensions of inequality using exist-

ing modeling frameworks and examples. The f‌inal section provides the conclu-

sions and sets out key research challenges going forward.

Methodological Advances and Limitations in

Analyzing Inequality

Initial studies addressed equity considerations on the basis of an analysis of the

social cost of carbon—the expected present-value of damages arising from

carbon dioxide emissions (Anthof‌f, Hepburn, & Tol, 2009). These studies pro-

vide estimates for socially desirable mitigation policies. However, these policies

are dif‌f‌icult to implement in practice because of two restrictive assumptions of

these studies: (a) People who benef‌it from the policies will be better of‌f if they

compensate those negatively impacted by them, and (b) a dollar given to a poor

person is the same as a dollar given to a rich one. Equity weights were intro-

duced to relax the second assumption, signif‌icantly changing the results of cal-

culating the social cost of an incremental emission (Anthof‌f et al., 2009). Some

studies have posited simple linear functional relationships between the fair share

Sa

´nchez 269