Climate change: droughts and extreme rainfall widen inequality by harming the poorest. Published in Proceedings of the National Academy of Sciences (PNAS) the study by researchers from the Institute of Economics and the EMbeDS Department of Excellence

Climate change is already happening, and it is affecting societies around the world. However, its impacts vary a lot not only across countries, but also across income classes. In particular, droughts and extreme rainfall are particularly harmful for the poorest. This is one of the main findings of a study recently published in the Proceedings of the National Academy of Sciences (PNAS), carried out by researchers of the Institute of Economics and of the EMbeDS Department of Excellence at Scuola Superiore Sant’Anna, Pisa (Italy).
By combining 40 years of data on climate and income inequality for more than 100 countries, the study finds that precipitation anomalies have increased income inequality. “The effect is much stronger in countries that heavily rely on agriculture, up to 35 times compared to developed ones. In these places, poor people often work in the primary sector, and depend on natural rainfall for their subsistence” reports Elisa Palagi, author of the study and researcher at the Institute of Economics at Scuola Superiore Sant’Anna. “Worryingly, countries which are most exposed to climate shocks are also those that are already very unequal, as in the case of many Sub-Saharan nations”.

“It never rains but it pours: climate change will likely worsen income inequality in the near future” continues Matteo Coronese, author of the study and researcher at the Institute of Economics at Scuola Superiore Sant’Anna. “Our projections not only indicate that 86% of countries around the world will become poorer because of climate change, but income inequality will increase as well. In the worst-case scenario, countries that heavily rely on agriculture will see their inequality indicators increase by 45% only because of altered precipitation. If we also consider changing temperatures, the number jumps to 78%”.

Francesco Lamperti, author of the study, assistant professor at the Institute of Economics at Scuola Superiore Sant’Anna and scientist at RFF-CMCC European Institute on the Economics and the Environment, specifies that “Though we should keep in mind that climate projections are highly uncertain, the outlooks are robustly negative. For example, in Sub-Saharan Africa the worst-case scenario indicates that income shares of the poorest 50% will shrink by more than 10% because of rainfall changes, while best-case projections indicate negligible positive effects. Further, there are specific areas of the world, such as Europe, where impacts are projected to be positive for some countries and negative for neighboring ones, thus increasing regional disparities.”

“Our findings underline the urgent need for mitigation and adaptation policies coupled with interventions to tackle inequalities and foster development, especially in highly exposed countries” adds Andrea Roventini, author of the study and professor at the Institute of Economics at Scuola Superiore Sant’Anna and OFCE, Sciences Po (France). “This policy mix could alleviate the direct impacts of climate change, improve well-being, reduce existing disparities and support sustainable growth.”