The distributional impact of climate change on rich and poor countries

TLDR

Countries in low latitudes begin with very high temperatures. The study examines how climate change impacts rich versus poor countries worldwide. The authors compute impact per capita and impact per GDP by aggregating market impacts across climate‑sensitive sectors for each country. Both indices show that climate change will disproportionately damage poorer countries, mainly because their low‑latitude locations push them further from optimal temperatures for climate‑sensitive sectors.

Abstract

This paper examines the impact of climate change on rich and poor countries across the world. We measure two indices of the relative impact of climate across countries, impact per capita, and impact per GDP. These measures sum market impacts across the climate-sensitive economic sectors of each country. Both indices reveal that climate change will have serious distributional impact across countries, grouped by income per capita. We predict that poor countries will suffer the bulk of the damages from climate change. Although adaptation, wealth, and technology may influence distributional consequences across countries, we argue that the primary reason that poor countries are so vulnerable is their location. Countries in the low latitudes start with very high temperatures. Further warming pushes these countries ever further away from optimal temperatures for climate-sensitive economic sectors.