Economic disparity among generations under the Paris Agreement

ARTICLE OPEN https://doi.org/10.1038/s41467-021-25520-8 Economic disparity among generations under the Paris Agreement 1234567890():,; Haozhe Yang 1 & Sangwon Suh 1✉ The costs and benefits of climate change mitigation are known to be distributed unevenly across time and space, while their intergenerational distribution across nations has not been evaluated. Here, we analyze the lifetime costs and benefits of climate change mitigation by age cohorts across countries under the Paris Agreement. Our results show that the age cohorts born prior to 1960 generally experience a net reduction in lifetime gross domestic product per capita. Age cohorts born after 1990 will gain net benefits from climate change mitigation in most lower income countries. However, no age cohorts enjoy net benefits regardless of the birth year in many higher income countries. Furthermore, the cost-benefit disparity among old and young age cohorts is expected to widen over time. Particularly, lower income countries are expected to have much larger cost-benefit disparity between the young and the old. Our findings highlight the challenges in building consensus for equitable climate policy among nations and generations. 1 Bren School of Environmental Science and Management, University of California, Santa Barbara, CA, USA. ✉email: NATURE COMMUNICATIONS | (2021)12:5663 | https://doi.org/10.1038/s41467-021-25520-8 | www.nature.com/naturecommunications 1 ARTICLE NATURE COMMUNICATIONS | https://doi.org/10.1038/s41467-021-25520-8 Y ounger generations emerged at the forefront of the global climate movement in recent years1,2. One of the prevailing narratives to this phenomenon is that younger and future generations are the greatest victims of climate change driven by the actions and inactions of older generations3–5. Supported by such narratives, some studies indicated the presence of intergenerational gaps in the perceptions toward climate change mitigation2,6–8. Several studies have explored how the economic policy can be designed to reduce or eradicate the intergenerational disparity in climate change mitigation9,10. Though many studies have discussed the justice and inequality issues among generations under climate change3,11,12, there were, however, no peer-reviewed literature that quantifies the costs and benefits of climate change mitigation by age cohorts at a country level. In this study, we quantify the lifetime costs and benefits of climate change mitigation by age cohorts across countries under the Paris Agreement. In this paper, the cost of climate change mitigation refers to the gross domestic product (GDP) loss compared to the counterfactual scenario without climate change mitigation13. To measure the loss of GDP, Integrated Assessment Models (IAMs) are developed by many research groups to couple energy, economy, and climate (Supplementary Note). In these IAMs, the economic modules generally follow general or partial equilibrium models14. Here, the data for the cost of climate change mitigation is derived from several IAMs15 in the 2014 IPCC report. According to the report, the abatement cost of climate change mitigation range 2–6% of global GDP by 2100 relative to pre-Paris Agreement policy13. The benefit of climate change mitigation refers to the avoided economic damage by stabilizing global temperature16. Burke et al.17 developed a damage function that measures the nonlinear relationship between temperature and economic growth (BHM damage function). Using this nonlinear relationship, Burke et al. estimated that keeping the global temperature at 2010 level could save 23% of global GDP by 210017. Though the Burke method is still under discussion18,19, this empirical nonlinear GDP–temperature relation has been widely applied in the costbenefit analysis of climate change mitigation16,20,21. The climate change mitigation scenarios under the Paris Agreement employed in our models do not consider the policies to address the intergenerational disparity. The costs and benefits of climate change mitigation are modeled for the period of 2020–2100 (Supplementary Fig. 1). The benefit of climate change mitigation hereafter is quantified by the BHM damage function, and the cost of climate change mitigation is calculated by assuming a triangle distribution of GDP loss reported by the 2014 IPCC report. To quantify the cost-benefit disparity, we estimate the lifetime costs and benefits at a 3% discount rate by age cohort in 169 countries under the 2 °C target of the Paris Agreement. The lifetime cost and benefits are measured as accumulative GDP per capita (in 2018 dollars) during the lifetime of an age cohort. The lifetime of an age cohort is calculated by using the expected life expectancy for the age group22. The distribution of GDP per capita across age cohorts follows the income distribution from the OECD database. The Paris Agreement scenario is represented by the Representative Concentration Pathways (RCP) 2.6. The PreParis Agreement scenario, which is the baseline scenario in our study, is represented by the Shared Socioeconomic Path (SSP) 4 and RCP 6.023 in the main text (analysis of other SSP and RCP scenarios can be found in “Data Availability”). Results Costs and benefits over generations. We first evaluate the change of lifetime GDP per capita for age cohorts born between 2 1920 and 2020. Our results show that climate change mitigation incurs a net reduction in lifetime GDP per capita for age cohorts born prior to 1960 across nearly all nations (Fig.1). In low-income countries, the age cohorts born before 1960 incur the largest reduction of average lifetime GDP per capita compared to the same age cohorts in countries with higher income. In low-income countries, the age cohort born between 1920 and 1960 is estimated to incur, on average, ~2.5% net reduction in lifetime GDP per capita under the Paris Agreement (Fig. 1d, h). In contrast, in high-income countries, the same age cohorts incur the least net reduction (<1%) in average lifetime GDP per capita. In most of the lower-middle-income and low-income countries, age cohorts born after 1990 will start to have a net gain of lifetime GDP per capita in the course of climate change mitigation under the Paris Agreement. By quantity, the net gain of lifetime GDP per capita among the younger age cohorts is asymmetrically larger than the net reduction among the older age cohorts. In low-income countries (Fig. 1d, h), the age cohort born in 2020 enjoys a net gain of ~6% in lifetime GDP per capita on average, while the age cohort born in 1950 incurs a net reduction of ~3%. In lower-middle-income countries (Fig. 1c, g), on average, the largest net gain of lifetime GDP per capita is 5–8folds larger than the net reduction in absolute value. In high- and upper-middle-income countries, the trend of lifetime GDP per capita by age cohort is sensitive to the model specifications that measure the benefits of climate change mitigation. When using the short-term BHM damag (...truncated)