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Eradicating poverty

“End poverty in all its forms everywhere” is the first of the United Nation’s Sustainable Development Goals (SDGs) adopted last September; setting targets of eradicating extreme poverty by 2030 for all people everywhere. In parallel another United Nations process took place that culminated in December 2015 where 195 countries adopted the new Paris Agreement under the United Nations Framework Convention on Climate Change aiming at keeping warming to well below 2 °C above pre-industrial levels in the long term while recognizing developing countries right to eradicate extreme poverty and develop sustainably (see UNFCCC¹). These agreements provide a basis for putting the world economies on a sustainable pathway. However, both agreements do not prescribe how these ambitious goals may be achieved in a compatible manner, nor how the burden or responsibility of achieving them may be shared.

These issues must be considered within the context of global economic inequality and historical responsibility given that developed countries are responsible for the majority of fossil CO₂ emissions from 1750 to 2010² and the fact that only 18% of the current global population enjoy First World living standards³ despite the large impacts from current levels of resource extraction and through-put, while at the same time large parts of the global population live at desperate poverty levels. For example, 770 million people lived on <1.90$ a day in purchasing power parities (PPP) (referred to as extreme poverty) in 2013⁴, and about half the world population lives on <2.97$ PPP a day⁵.

The global community has responded with numerous policy goals to address the issue of extreme poverty, as well as Sustainable Development. Sustainable Development requires to meet the twin objective: to ensure that all people have the resources needed, such as food, water, access to health care and energy, to fulfill their human rights, and to ensure that humanity’s use of natural resources does not stress critical earth system processes. According to the report The Action Agenda for Sustainable Development by the UN’s Council of the Sustainable Development Solutions Network (or SDSN)⁶, “sustainable economic growth” should allow “all low-income countries to reach the per capita income threshold of middle-income countries by 2030.”

Achieving the Paris target of limiting climate change to well below 2 °C would not only require aggressive decarbonization in rich countries but may also limit the aspirations of poor countries as aggressive limits on greenhouse gas emissions can limit the options for energy sector growth; and growth in energy use is correlated with economic growth and poverty reduction, although the strength of this link is subject to change dependent on technology and consumption patterns^7, 8. There is a rich literature that views poverty as multidimensional and poorly represented by income measures (e.g., refs. ^8,9,10). The SDGs themselves make reference to eliminating poverty in all its dimensions and a focus merely on consumption represents a limited point of view but is often seen as a reasonable approach for capturing extreme poverty. There are numerous studies that investigate distributional effects of carbon and energy policies at regional and national levels^11, 12. But to our knowledge there are currently only very few global quantitative analyses (e.g., ref. ¹³) of what poverty alleviation would mean in terms of carbon implications and this is only a first step in this direction that uses detailed information on consumption patterns of people living at the edge of subsistence which is highly relevant to address poverty issues. Despite limitations, quantifying the “climate-development conflict” through greenhouse gas emissions associated with energy consumption¹⁴ is a very useful first approximation as energy is part of many household consumption activities as well as being an essential input to production of goods and services in all stages of global supply chains.

We find that in 2010, the global elite or top 10% of income earners were responsible for 36% of global carbon emissions whereas the extreme poor accounting for 836 million people, that was 12% of the global population, contributed only 4% of global emissions. Overall, the bottom half of global income earners caused only about 13%. Based on these specific carbon footprints for different income categories across the globe we find that lifting people out of extreme poverty has only relative little carbon implications with a projected increase of about 0.05 °C above the IPCC base run by the end of the 21st century. However, when moving the global poor, i.e., everybody below an income of $2.97 (in PPP) to the next income level, which is by the standards of industrialized countries still fairly modest, we would add another 0.6 °C by the end of the century. This more ambitious scenario would significantly increase the required speed and extent of future emission reductions. Given that so far efficiency gains have not been able to keep up with additional emissions a greater focus on demand-side measures jointly with lifestyle and behavioral change is called for especially considering the huge global carbon inequality staying in the way of efforts towards a low carbon society.

Results

We follow a simplifying approach to energy consumption and energy poverty in households, especially in the Global South, ignoring the role energy plays for households as an important prerequisite to enable capabilities (e.g., refs. ^12, 15). Our research complements recent World Bank reports by Fay et al. and Hallegatte et al.^16, 17, that make the case that climate mitigation policies can be introduced without slowing down poverty reduction, but these do not calculate the impact of doing so on global emissions. We approach this problem in several steps: we first calculate the additional carbon caused by higher levels of income and associated expenditure patterns; we then calculate the temperature increase associated with higher carbon emissions driven by increased consumption and associated increase in production and production capacity. These changes are introduced annually until 2030, in line with the SDG. We keep technology, i.e., carbon intensity constant until 2030, considering the uncertainty in technology, economic growth and policies (see e.g., The International Energy Outlook¹⁸. Beyond 2030, we do not make any assumptions about technical change but rather ask which annual reduction in carbon emissions is required to compensate for the additional carbon emitted through higher consumption levels (see Rozenberg et al.¹⁹ for a similar question). For calculating carbon footprints for different income groups, we follow the consumption-based approach to carbon accounting based on multi-regional input–output (IO) analysis. This allows us to account for carbon emissions throughout global supply chains, which are then allocated to the final consumer²⁰. It not only enables us to account for household’s carbon emissions associated with direct emissions associated with heating and cooling, cooking and transport but also accounting for the carbon emitted during the production of products and services consumed by different types of households. For the consumption patterns in developing countries, we use the World Bank’s Global Consumption Database²¹. This database contains the most detailed depiction of consumption patterns and lifestyles representing 4.5 billion people. For consumption patterns of household groups in developed countries we use consumer expenditure surveys of national statistical offices for the US²², the EU²³, Australia²⁴, and Japan²⁵.

Global carbon inequality

Once we calculate the carbon footprint for each income group (Fig. 1) we get the following picture for 2010, which is roughly in line with similar estimates²⁶. The global elite or top 10% of income earners (with incomes higher than 23$ PPP daily) are responsible for about 36% of global carbon emissions for their consumption of goods and services emitted in the production process along global supply chains. This would comprise mainly the populations of the rich countries such as the US, the EU, Japan, Australia, and Canada plus the elites of developing countries and transition economies. In comparison, the global poor or bottom 50% of income earners with income of <$2.97 PPP cause about 15% of global carbon emissions. The bottom half includes also the extreme poor of more than a billion people in 2010 earning <1.90$ PPP and contributing <4% of global carbon emissions.

This unequal distribution is also reflected in the respective carbon footprints for each global income category. The carbon footprint of the lowest income category is about 1.9 t CO₂-e whereas the global elite’s carbon footprint amounts to 26.3 t CO₂-e per capita on average. The low direct carbon footprint of the lower income categories might be partly due to the omission of non-commercial biomass (see “Limitations” section for further discussion). Whereas the lower income households spend a larger share of their income on necessities such as food, clothing and shelter, with increasing income the share of luxury items, services and travel increases (Supplementary Fig. 1).

Carbon implication of poverty alleviation

Extreme poverty, as defined by the World Bank, has been cut in half since the 1990s. But there are still one in five people in developing countries living in extreme poverty. Extreme poverty is mainly found in fragile and conflict-affected countries, predominantly in Southern Asia and sub-Saharan Africa. While the SDGs set a goal for eradicating extreme poverty, they do not specify how this might be achieved. Thus to investigate the carbon implications of the first SDG for moving the population in extreme poverty to the next higher income level we do just that without assuming changes in income in the other household categories or changing technology. We take the consumption patterns and the associated carbon footprint of people in extreme poverty (i.e, <$1.90 PPP) and move them to the next income level and their associated consumption patterns for the group $1.90–2.97 PPP by 2030, with population growth at the growth rate of low income countries according to the United Nations projection³. In addition to increases in household consumption, we increase proportionally government expenditure and investment to allow for a necessary expansion of production capacity required to supply the increase in household demand.

Since long-term climate impacts depend on cumulative carbon emissions we then take the resulting additional carbon emissions over time and add them to a baseline scenario. As baseline, we use one of the greenhouse gases (GHG) emission trajectories, known as representative concentration pathways (RCPs), adopted by the IPCC for its fifth Assessment Report (AR5) in 2014 that is consistent with limiting temperature changes to below 2 °C above pre-industrial level, i.e., RCP2.6. The RCP2.6 emission scenario assumes that global annual GHG emissions peak sometimes before 2020 and decline substantially afterwards. We use RCPs because they are produced to be independent from underlying socio-economic assumptions as these projections can result from very different Integrated Models. To convert emissions scenarios into global-mean temperature we used MAGICC version 6. Model for the Assessment of Greenhouse Gas Induced Climate Change (MAGICC) is used in many scientific publications and integrated models. It is also used by the IPCC to facilitate integrated model comparisons. The results are presented in Figs. 2 and 3.