Abstract

Climate-change is the pervasive reality of the world today. This research paper explores the relationship between climate change and income inequality, highlighting how these two global challenges amplify one another. It examines the disproportionate contributions of wealthy nations and individuals to greenhouse gas emissions and the severe impacts of climate change on low-income communities and vulnerable economies. The paper discusses solutions such as climate finance, carbon pricing, and investments in sustainable technologies, and emphasises their potential to address both environmental and economic disparities. This study advocates for inclusive approaches that prioritise social justice to achieve a more sustainable and equitable future.

Keywords: Climate Change, Income Inequality, Carbon Emissions, Economic Disparities

Introduction

Climate change is no longer a threat in the distant future – it is now the reality of today’s world and has serious impacts on the planet’s ecosystems and economy. Manifesting in the form of a drastic rise in occurrence of natural disasters and seen in the changing patterns of agriculture, climate change impacts those the most who are least prepared to deal with its consequences.

Post the pre-industrial era, the Earth’s average temperature has increased by around 1.2°C, and this has had a direct impact on global economic stability and inequality. It is estimated that by 2100 in India and Saudi Arabia, the cost of climate change could reach upto 9%-13% of their respective GDPs, and the number of children who die annually due to losses in income, could increase by 165,000 and 250,000, respectively. By the same year, the number of people living on less than $2 a day could increase by 145-220 million.1 To prevent such a dire state of events would require investments amounting to only 1% of global GDP annually.2 

This disparity is not limited to financial aspects, but extends to environmental and social ones too. While wealthy individuals and nations have relatively easy access to resources for adaptation, developing countries are often to get such access without taking on debt. According to a 2020 Oxfam report, carbon emissions of the top 10% are more than double those of the bottom 50%.3

Carbon-pricing mechanisms also reflect inequality – until redistributive policies are implemented in an effective manner, they end up burdening low-income households disproportionately more. Similarly, fossil fuel subsidies, which, according to the IMF, were $5.9 trillion in 2020, also distort energy markets and divert resources which could have been used for making investments in renewable energy.

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