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Ambitious climate policies would help reduce extreme poverty

Extreme poverty in developing countries could be reduced through ambitious climate policies, according to a new study from the Potsdam Institute for Climate Impact Research (PIK). 

“Climate policies safeguard people from climate change impacts like extreme weather risks or crop failures. Yet they can also imply increased energy and food prices,” said study lead author Bjoern Soergel. 

“This could result in an additional burden especially for the global poor, who are already more vulnerable to climate impacts. Poverty reduction hence needs to be included in the design of climate policies.”

The Potsdam scientists determined that, at the current rate of socioeconomic development, about 350 million people will live in extreme poverty by 2030, living on less than $1.90 per day.

The experts report that if climate policies consistent with the Paris Agreement target of limiting warming to 1.5 degrees Celsius were introduced, this could even increase poverty by another 50 million people.

Sorgel said that in order to compensate for this, we should combine emission pricing with a progressive redistribution of the revenues, which could be achieved by establishing a “climate dividend.” In this case, the revenues would be returned equally to all citizens, turning poorer households with typically lower emissions into net beneficiaries of the scheme. 

According to Soergel, this could in fact turn the trade-off between climate action and poverty eradication into a synergy.

The researchers found that this type of redistribution plan can alleviate the negative side effects of climate policies on poverty. The scientists also looked at international burden sharing. 

“To share the costs of climate change mitigation in a fair way, industrialized countries should compensate developing countries financially,” explained study co-author Nico Bauer.

“Combining the national redistribution of emission pricing revenues with international financial transfers could thus provide an important entry point towards a fair and just climate policy in developing countries,” said study co-author Elmar Kriegler. “And it does not stop there: We need to look beyond 2030 and continue to work towards the goal of eradicating extreme poverty.”

The study is published in the journal Nature Communications.

By Chrissy Sexton, Staff Writer

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