What do you believe is the single most important factor driving up the cost of living in Nigeria?

Climate change and economic inequality are deeply interconnected, with the potential to exacerbate each other if left unchecked. A study published in Nature Climate Change sheds light on this critical relationship using data from eight large-scale Integrated Assessment Models (IAMs) to examine the distributional impacts of climate policies and climate risks.

The study provides robust evidence that climate policies aligned with the Paris Agreement can mitigate long-term inequality while addressing climate change.

Led by Johannes Emmerling, Senior Scientist at the Euro-Mediterranean Center on Climate Change (CMCC), the study assesses how climate change is projected to increase inequality within countries, with the Gini index increasing by an average of 1.4 points by 2100.

However, implementing ambitious climate policies—such as carbon pricing—can significantly reduce this inequality increase in the long term. The study finds that redistributing carbon revenues equally among citizens can not only offset short-term economic costs but also reduce inequality, lowering the Gini index by nearly 2 points.

"This research demonstrates that with careful policy design, we can address both climate change and economic inequality—two of the most pressing challenges of our time," says Emmerling.

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