Door: Rob van der Rijt, 15 February 2015

Economic inequality and climate change and how they are related

Two of the most discussed topics of this moment: economic inequality and climate change. Both subjects have worldwide impact on prosperity and welfare, on economy and ecology and the sustainability of this society. Both topics have a borderless influence and show the interdependence between countries and continents. How do these two concepts relate to each other?

Economic inequality between countries

Economic inequality can be analyzed in different ways. In this blogpost I want to look at the economic disparity between countries. Which country is the poorest and which country the richest? I use the average gross domestic product (GDP) per capita to describe this. Research from the IMF shows that of the 15 poorest countries in the world, 14 are located in Africa and one in Asia (Afghanistan). In Africa, the countries south of the Sahara are economically the poorest. The top 5 consists of Congo, Zimbabwe, Burundi, Liberia and Eritrea.

The richest countries are located in Europe, North America and in oil-producing countries like Qatar, the UAE and Brunei.

The differences in wealth are huge. In Qatar there is a GDP per capita of 105.091 dollars ayear. A Dutchman is good for an average of $ 42 493 to gross domestic product per year. In Liberia, however, that amount is 716 dollars and a 394 dollars per year in Congo …

Most vulnerable countries to climate change

OK, the poorest and richest countries in the world are now described. Which countries are most vulnerable to climate change? In particular, Africa and Asia have to deal with a disproportionate amount of impact, according to the Netherlands Environmental Assessment Agency. Climate change threatens foodsupplies there because of droughts and floods while the population is still growing strongly. This puts food security at risk. Harvests are hit by a changing climate worldwide with a 15 to 18% decline, and in Africa, the effects are even stronger.

Globally, the most vulnerable areas are densely populated coastal areas and deltas, often with a high economic activity. Bangladesh is known as the most vulnerable country when it comes to climate change because of its location in a densely populated low-lying delta. Vietnam and Senegal, according to a study by Standard & Poor’s, make the top 3 of most vulnerable countries complete.

The twenty most vulnerable countries, following Standard & Poor’s research, are all emerging economies, while the twenty least vulnerable are in the richest countries.

Health and air quality

A further consequence of the burning of fossil fuels is the influence on human health. While the West successfully invested in cleaner technology to improve local air quality, the concentrations in aerosols in poor Africa are increasing. The result: a growing number of asthmatics. Meanwhile because of a warming world, Africa is also confronted with a growing number of malaria outbreaks. Massive disease slows down the economy. Ill people cannot participate in the labor market and do increase healthcare costs, which has a negative impact at the expense of consumption and the economic position of these countries.

Economic inequality and climate change and how they are related

There is clearly a link between vulnerability to climate change and the economic position of a country. The poorest countries experience most the negative consequences of climate change. That will further worsen their financial position so that the economic inequality between countries continues to increase worldwide. And, oh how ironic; the countries responsible for the largest amount of greenhouse gases experience the least of climatic consequences. At least temporarily, because it is estimated that climate change will let flee tens of millions of people. In 2007 there were 37.5 million climate refugees, by 2050 there will be a 150 million. These refugees seek safe and fertile areas which they can find in Europe and North America.

UN Climate Fund

During the climate summit in Copenhagen in 2009, the international community agreed to set up a fund to help poor countries with their climate projects. Through the Climate Fund the richer countries can allow to enter their climate-related investments in vulnerable countries. One half goes to so-called adaptation projects so that countries can adapt to climate change, such as building better dikes and water management systems. The other half goes to mitigation projects to keep emissions within the limits; through projects for cleaner transport and clean energy.

The fund must be filled with a 100 billion dollars in 2020. The Dutch government for example has already pledged a contribution of $ 125 million and the US an amount of 3 billion. The $ 125 million part of the Netherlands from the required $ 100 billion is about 0.13 percent of the whole. And that while the Netherlands is responsible for about 1% of the world economy … The hitherto pledged $ 125 million from the Netherlands is an unequal contribution when you look at responsibility and capacity.

To prevent is better than to cure

Well finally this applies to all: to prevent is better than to cure. Better start now with significant reductions of greenhouse gas emissions, for example by means of a CO2 tax and immense investments in clean technologies. Countering economic inequality and tackling climate change go hand in hand. It requires great effort and courage of politics, business and of you and me.

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