Improving living standards within stringent carbon budgets: the critical importance of climate equity

The impacts of climate change are increasingly visible around the world through hotter temperatures, thinning ice, alternating droughts and heavy rains, and more frequent severe storms. While many governments and companies have pledged net-zero emissions by 2050, decarbonisation progress is insufficient to meet the Paris Agreement targets.

This working paper explores the interconnected issues of climate change, poverty, and inequality. It highlights the urgent need for action to address climate change and the insufficient progress in reducing greenhouse gas emissions. The paper emphasises the importance of equitable burden-sharing and proposes a more equitable approach to emission reduction that focuses on reducing emissions from the wealthiest individuals and raising living standards for the poorest. It discusses the concept of a carbon budget compatible with a 1.5°C climate target and presents data on the disproportionate impact of the wealthiest individuals on emissions. Scenario modelling is used to demonstrate the potential emission reductions achieved through equitable distribution and reduced consumption by the wealthy. The paper also examines the feasibility of improving diets and infrastructure while lowering emissions. Based on the analysis, the paper concludes with recommendations for improving the well-being of the poorest while mitigating climate change.

Key Messages

In the past 30 years, inequality within countries has become an increasingly important driver of emission inequality, with carbon footprints closely linked to income and consumption.
The bottom three-quarters of the global consumption distribution based in low- and middle-income countries outside Europe have considerably lower per capita expenditures, on average, than their counterparts in European upper-middle-income countries and high-income countries. This difference would be even starker if considering other Western nations (e.g. United States, Canada or Australia) or other high-income countries (e.g. those in the Persian Gulf).
National averages conceal stark differences within countries. The wealthiest Indians or Nigerians, for instance, may emit as much as Australians. However, our findings underscore that most Indians or Nigerians have very small carbon footprints, unlike the average or even poorer Australian.
Even if we raise the living standards of billions of people who now consume too little for their own well-being, their per capita emissions would still be very low and even their aggregate emissions quite modest. The continued deprivation of people in poverty won’t save the planet from climate change.
There are low-carbon options for reliable power, access to goods and services, and nutrition. The relative affordability and viability of these options are shaped partially by exogenous factors such as technological costs, established infrastructure stock and availability of land, but also endogenous factors such as regulatory environments, planning decisions, acquired capabilities and cultural norms.