Poverty, climate change, and policy design: essays in environmental and development economics

Poverty and climate change are not only two of the most pressing global challenges, but they are also interconnected in ways that can complicate attempts to alleviate either in isolation. Their relationship is evident across multiple dimensions. Climate change exacerbates poverty through rising temperatures and increasingly frequent and severe weather events, the effects of which are disproportionately felt by the world’s poorest communities. Conversely, efforts to alleviate poverty through economic development can contribute to higher emissions and environmental degradation. In the global fight to mitigate the worst effects of climate change, the burden of efforts to reduce emissions will be unevenly distributed, with transitions often disproportionately affecting vulnerable populations. Despite the pressing nature of climate change, the importance of alleviating poverty, and the ways these issues intersect, there remains a relatively small body of work that integrates these topics. This thesis seeks to contribute here, using micro-econometric methods and real-world policies to consider three key ways in which poverty and environmental policy are interconnected. After an introduction in Chapter 1, Chapters 2 and 3 examine how poverty influences the primary impacts of environmental policies, focusing on behavioral barriers and related solutions to facilitate the transition to energy-efficient technologies. Chapter 4 then considers the secondary effects of environmental policies—in particular, their possible impacts on poverty and inequality. Finally, Chapter 5 explores the role of policy in mitigating the adverse effects of climate change amongst the poorest and most vulnerable. Taken together, the findings in the thesis demonstrate some of the diverse ways that poverty and environmental policy can interact. Environmental policy will need to account for these interactions to achieve climate change mitigation, minimize adverse secondary impacts, and support communities vulnerable to climate change. A multifaceted approach, tailored to specific contexts, will be necessary for balancing mitigation, adaptation, and equity in the face of these interconnected challenges.