Three essays on climate change, mitigation policy, and poverty in developing countries
Abstract
Climate change mitigation policies can have adverse poverty impacts. This is the central premise of this thesis. The first essay focuses on the poverty implications of two types of climate change mitigation policies. The first policy is designed in such a way that only the Annex I countries take action. The second policy is one in which the first policy is accompanied by a forest carbon sequestration incentive in non-Annex I regions. The results show that that the Annex I-only policy is poverty-friendly, since it enhances the competitiveness of non-Annex countries, particularly in agricultural production. However, once forest carbon sequestration incentives in the non-Annex regions is added to the policy package, the overall effect is to raise poverty in the majority of our sample countries. The second essay looks into the possibility that over the near term, the poverty impacts of climate change mitigation policy might be more significant than the poverty impacts of climate change itself. The essay uses the same modeling framework as the first essay to generate poverty distributions from climate change and climate change mitigation policies. The results indicate that the poverty impact of climate change mitigation is greater than the poverty impact of climate change in 6 out of the 14 countries in our sample. There is support for the claim that the poverty consequence of the mitigation policy outweighs the impact of climate change in Brazil, Mexico, Colombia, Peru, Venezuela, and Indonesia. For African countries in our sample, poverty impact of climate change consistently outweighs the impact of mitigation policy. This regional disparity of results calls for a climate policy prescription that is tailored to regional concerns. The third essay looks deeper into understanding the poverty consequences of forest carbon sequestration incentive using Ethiopia as a case study. The data used in this essay has twelve type of households that are differentiated based on geography and source of income. The essay draws some assumptions and results from the first paper but uses a new multi-household CGE model. MyGTAP is a model is suited for understanding the distributional consequences of economic policies.The forest carbon sequestration incentive that is implemented in Ethiopia is financed by wealthier Annex II countries. The results show that impact of the policy differ substantially by location. The urban poor and pastoralist households are hit the hardest. These two types of households do not benefit from the sequestration incentive and they suffer from the price increase as they are net buyers of agricultural commodities.
Degree
Ph.D.
Advisors
Hertel, Purdue University.
Subject Area
Climate Change|Economics|Agricultural economics|Economic theory
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