Implications of COP26 Forty-Five Percent Reduction in Carbon Emissions on Economic Growth and Multidimensional Poverty

Abstract

The Conference of Party [COP] 26 proposed a forty-five percent (45%) reduction in carbon emissions by all countries before the year 2030. The measure is expected to reduce the world’s temperature by 1.50C and disasters. However, there is no empirical study to ascertain the direct effect of the carbon reduction on Economic growth. Also, the generic 45% carbon reduction measure does not consider the possible effect on poverty especially in developing countries. Hence this study sought to assess the effect of the 45% reduction in carbon emission on economic growth and poverty across the various continents of the world. The study collected secondary data from several international institutions and adopted the exploratory and inferential spatial statistics techniques. Results indicated GDP growth rate is expected to decrease by 0.11% while monetary poverty will increase by 0.96% in Africa, but the opposite will persist in Europe and America with the 45% reduction in carbon emission. The study concludes that, though the 45% reduction is more likely to reduce world’s temperature, but with negative consequence on economic growth and poverty in developing countries as such the generic 45% should be reassessed based on countries level of development. Also, developed countries should support Africa and Oceania states with the needed climate funds to improve their resilience to climate change.

Keywords: Carbon Emission, COP26, Economic Growth, Multidimensional Poverty