Inequality repercussions of financing negative emissions

Pietro Andreoni (), Johannes Emmerling and Massimo Tavoni
Additional contact information
Pietro Andreoni: RFF-CMCC European Institute on Economics and the Environment, Fondazione Centro Euromediterraneo sui Cambiamenti Climatici
Johannes Emmerling: RFF-CMCC European Institute on Economics and the Environment, Fondazione Centro Euromediterraneo sui Cambiamenti Climatici
Massimo Tavoni: RFF-CMCC European Institute on Economics and the Environment, Fondazione Centro Euromediterraneo sui Cambiamenti Climatici

Nature Climate Change, 2024, vol. 14, issue 1, 48-54

Abstract: Abstract Negative emissions technologies are attracting the interest of investors in the race to make them effective and profitable. When deployed at scale, they will be financed through public funds, reducing the fiscal space for a socially inclusive climate transition. Moreover, if the private sector owns negative emissions technologies, potentially large profits would disproportionally benefit investors and equity holders. Here we quantify the inequality repercussions of direct air capture of CO2 in a 1.5 °C scenario, using a regional integrated assessment model that features within-country income heterogeneity. We find that, under a single carbon market, financing negative emissions technologies could double the increase in income inequality of climate policy. The effects are highest around the time of net zero and in scenarios with carbon budget overshoot. We identify the drivers of the inequality increase and discuss policy provisions to mitigate the equity concerns of CO2 removal strategies.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.nature.com/articles/s41558-023-01870-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nat:natcli:v:14:y:2024:i:1:d:10.1038_s41558-023-01870-7

Ordering information: This journal article can be ordered from
https://www.nature.com/nclimate/

DOI: 10.1038/s41558-023-01870-7

Access Statistics for this article

Nature Climate Change is currently edited by Bronwyn Wake

More articles in Nature Climate Change from Nature
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().