JustInequality

In this project we will investigate the optimal investment distribution to reduce the economic inequality that is caused by the unavoidable climate change that will unfold within the next 20 years. In recent years the Potsdam Institute has contributed towards the investigation of the impact of climate change on economic growth in a quite profound way including the effect of temperature and precipitation variability on a regional scale (Kalkuhl and Wenz, 2020; Kotz et al., 2021; Kotz, Levermann and Wenz, 2022). This has allowed us to compute projections of climate-change-induced economic development of the next 20 years on a subnational level which turns out to increase inequality between countries as well as within countries (Kotz, Levermann and Wenz, submitted). From this analysis we are able to identify which of the five climate variables have the strongest influence on future economic development in different regions within different countries of the planet. In this project we propose to identify the optimal investment distribution for a set of internationally available funds: Revenues from the European carbon emission trading scheme (ETS), national budgets for climate adaptation of countries of special interest, and the Green Climate Fund. The aim of this project is to investigate how these budgets may be invested efficiently to reduce inequality within the countries of special interest.