Abstract
A carbon tax is one of the measures used to reduce GHG emissions, as it provides a strong political instrument for reaching the goal, stated in the Paris Agreement, of limiting the global mean temperature increase to well below 2 °C. While one aspect of a carbon tax is its ability to change income distribution, no quantitative assessment has been made within the context of global poverty. Here, we explore future poverty scenarios and show the extent to which carbon tax revenue, obtained to limit global warming to well below 2 °C, has the potential to help eradicate poverty. In order to better understand the relationship between poverty and climate change mitigation policy, we developed a novel modelling framework that includes a module representing poverty indicators in the conventional integrated assessment model. We found that the poverty gap, which is a measure of the shortfall in income relative to the poverty line, is 84 billion US dollars (USD) and that the carbon tax revenue potential for the above-mentioned 2 °C consistent climate change mitigation would be 1600 billion USD in 2030. Many low-income countries cannot fill the poverty gap using only their own domestic revenue; however, this shortfall could be met by using a portion of the revenue in high-income countries. Our results demonstrate that climate change mitigation can have a great potential in synergy effects for resolving poverty and illustrates the importance of international cooperation.
Highlights
The number of people worldwide under severe poverty, below the threshold for decent living ($1.90 per day in terms of international purchasing power parity, PPP), known as the poverty headcount, is reported as 736 million [1]
A large number of people still suffer from absolute poverty, poverty reduction has been very successful over the last couple of decades, as recognised by the success of the Millennium Development Goal (MDG) programme [2]
The poverty rate is projected to reach 4.3% after falling from 9.9% in 2015, nearly reaching the goal stated in the SustainableDevelopment Goals (SDGs)
Summary
The number of people worldwide under severe poverty, below the threshold for decent living ($1.90 per day in terms of international purchasing power parity, PPP), known as the poverty headcount, is reported as 736 million [1]. The number has historically decreased, and is over 1 billion less than in 1990, despite significant population increases in low-income countries during this period. This progress has been driven by strong global income growth and rising wealth in many low-income countries. A large number of people still suffer from absolute poverty, poverty reduction has been very successful over the last couple of decades, as recognised by the success of the Millennium Development Goal (MDG) programme [2]. Development Goals (SDGs) have been established as post-MDG UN goals. There are 17 goals and one of them is SDG1 which clearly states that its goal is to end poverty. Continuing efforts toward achievement of SDG1 may lift people out of poverty conditions
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