IMPACT OF CLIMATE CHANGE ON INCOME INEQUALITY. IMPLICATIONS FOR RICH AND POOR COUNTRIES

Abstract

The article aims to provide evidence of the link between income inequality and climate change in both developed and low-income economies. This study uses a descriptive analysis method along with panel data analysis to assess the impact of climate changes on income inequality in 42 advanced economies and 68 developing countries between 1995 and 2020. The results of empirical research confirm that climate change is an important factor responsible for growing income inequality. The impact of a country’s vulnerability is positively associated with increasing income inequality in low-income economies. In turn, climate resilience has a statistically significant effect on income distribution in both groups, although the ability to mitigate climate change and adapt is considerably weaker in developing countries. This research raises our awareness of the links between the economy and climate change, including their implications for income inequality, and signals possible changes in the redistributive system to mitigate climate change and combat income inequality. The added value of this article is the results of research on the negative consequences of climate change on income inequality in over 100 countries. Particular attention was paid to the ethical issue of unequal responsibility for causing climate change between rich and poor countries.