The Economics of Inequality and the Environment

44 Pages Posted: 10 Apr 2024

See all articles by Moritz A. Drupp

Moritz A. Drupp

University of Hamburg - Faculty of Business, Economics, and Social Sciences

Ulrike Kornek

University of Kiel; Potsdam Institute for Climate Impact Research (PIK)

Jasper Meya

German Centre for Integrative Biodiversity Research (iDiv) Halle-Jena-Leipzig; Department of Economics, University of Leipzig

Lutz Sager

Georgetown University

Date Written: 2024

Abstract

Environmental degradation and economic inequality are two of the defining challenges of the twenty-first century. We synthesize conceptual mechanisms that underpin inequality-environment interlinkages and take stock of the relevant empirical evidence. We propose three channels of interaction, describing, first, how the cost of environmental policy is distributed across households, second, how environmental benefits vary with household income, third, how income inequality and redistribution shape environmental outcomes. The three channels determine how both environmental quality and economic inequality matter for policy appraisal. We argue that it is crucial to consider inequality-environment interlinkages in economic research and policy design, as neither issue can be fully understood in isolation, and close by highlighting future research needs.

Suggested Citation

Drupp, Moritz A. and Kornek, Ulrike and Meya, Jasper and Sager, Lutz, The Economics of Inequality and the Environment (2024). CESifo Working Paper No. 11036, Available at SSRN: https://ssrn.com/abstract=4788235 or http://dx.doi.org/10.2139/ssrn.4788235

Moritz A. Drupp (Contact Author)

University of Hamburg - Faculty of Business, Economics, and Social Sciences ( email )

Von-Melle-Park 9
Hamburg, 20146
Germany

Ulrike Kornek

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Potsdam Institute for Climate Impact Research (PIK) ( email )

Telegrafenberg 31
Potsdam, Brandenburg 14473
Germany

Jasper Meya

German Centre for Integrative Biodiversity Research (iDiv) Halle-Jena-Leipzig ( email )

Deutscher Platz 5e
Leipzig, 04103
Germany

Department of Economics, University of Leipzig ( email )

Leipzig, 04109
Germany

Lutz Sager

Georgetown University ( email )

Washington, DC 20057
United States

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