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Climate change and inequality: evidence from the United States

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posted on 2024-02-05, 14:18 authored by Carolyn Chisadza, Matthew Clance, Xin Sheng, Rangan Gupta
This paper examines the effects of climate change on income inequality in the United States. Computing impulse response functions (IRFs) from the local projections’ method, we empirically show that there is an immediate temporary positive response in income inequality from rising temperatures within the first year. We also observe differences in the effects of temperature growth on inequality across different classifications, mainly states with high inequality and low temperature growth are more susceptible to changes in temperature growth than states with already high temperature growth and high inequality growth. States with low inequality growth exhibit similar positive effects on income inequality across low- and high-temperature-growth classifications. We find that the initial positive effect on income inequality is not permanent. However, if the effects of rising temperatures are unabated in the earlier periods, income inequality starts to rise in the later periods. Our results highlight an important pathway, that climate change can negatively affect sustainable development through increased income inequality.

History

Refereed

  • Yes

Volume

15

Issue number

6

Publication title

Sustainability

ISSN

2071-1050

Publisher

MDPI AG

File version

  • Published version

Language

  • eng

Item sub-type

Journal Article

Affiliated with

  • School of Economics, Finance and Law Outputs