Accounting for distributive justice in Integrated Assessment Models

Abstract

Integrated Assessment Models (IAMs) are widely used tools for estimating climate change's impacts on the socio-economic system. However, IAMs possess a limited ability to represent the impact on vulnerable populations. Influential IAMs use highly aggregated outcomes masking significant relative differences in impacts across heterogeneous populations and time. Therefore IAM studies systematically undervalue the need for faster CO2 emission reductions to prevent substantial climate impacts on low-income groups. Previous literature has proposed alternative distributive principles to use in IAMs to overcome inequity problems in current abatement pathways. Due to the heterogeneous models, scenario assumptions, and principles used, comparison between studies has been difficult. Therefore the literature lacks an overarching comparative study of the performance of various distributive principles. Furthermore, deep uncertainty present within climate change is often not considered because most studies focus on single-scenario optimality. Therefore, current abatement pathways contribute to maintaining current economic inequalities and possess exposure to uncertainty. This thesis applies alternative principles to the RICE model through a MORDM method. Alternative distributive principles are used to generate more equitable abatement strategies using a MOEA. This research analyses four main principles: the Prioritarian, Sufficitarian, Egalitarian, and the Utilitarian principle. Alternative principles generate significantly different abatement trajectories than the Nordhaus optimal policy. Sufficitarian policies have the most stringent abatement targets focusing on reaching net-zero emissions by 2065. Prioritarian strategies aim at 2065-2105. Utilitarian strategies focus on reaching net-zero emissions around 2135. Lastly, Egalitarian policies enforce slow climate abatement. Abatement strategies have been stress-tested through an uncertainty analysis based on the SPP-framework and exposure to long-term climate uncertainty. Sufficitarian strategies possess high robustness to climate extremes and high average performance across all scenarios. Prioritarian strategies possess high average robustness but lower regret-based robustness. This research shows that alternative principles can successfully generate well-performing abatement pathways in the RICE model that outperform Utilitarian-based policies. The Sufficitarian principle's capacity to produce equitable and economically optimal strategies has been undervalued in previous research. Lastly, this thesis emphasizes that stronger climate action is needed to prevent possible disastrous worldwide impacts on low-income groups. Global emission reductions should adhere to a global warming of 1.5 degrees set out by the IPCC, which is consistent with the best-performing pathways found in this research. A first step would be to reduce existing economic inequalities to overcome exposure to climate extremes for lower-income groups.