Income and inequality pathways consistent with eradicating poverty

Abstract

Abstract To investigate concurrent climate action and poverty eradication, we present combined income growth (GDP/capita) and domestic income inequality (measured as Gini coefficients) pathways that pursue (absolute and relative) poverty eradication reflecting the three narratives of Sustainable Development Pathway (SDP). The GDP/capita pathways are modifications of the Shared Socioeconomic Pathway SSP1 scenario, including one post-growth future for high-income countries and higher growth for all currently lower-income countries. Current inequality levels, together with the total national income from the GDP pathways, determine the inequality reductions required to eradicate poverty in individual countries; they are based on a methodology that specifies the relationship between poverty, inequality, and growth. Our pathways show rapid and sustained reductions in within-country inequality (Gini), even with high economic growth. The speed of redistribution is limited to the highest historically observed changes in inequality. We identify which countries face the greatest difficulties in meeting their poverty eradication targets and estimate the level of international transfers needed to fill the gap for those countries. Our findings reconfirm the importance of reducing within-country inequality in eradicating global poverty.