Even climate change is not fair: the impact of climate change on economic outcomes

• Date: 09 December 2024
• Pages: 46-67
• DOI: https://doi.org/10.1108/IJCCSM-01-2024-0008
• Published date: 09 December 2024
• Subject Matter: Public policy & environmental management,Environmental issues,Climate change
• Author: Vincent Tawiah,Noha Alessa

Even climate change is not fair: the

impact of climate change on economic

outcomes

Vincent Tawiah

Dublin City University, Dublin, Ireland, and

Noha Alessa

Princess Nora bint Abdul Rahman University, Riyadh, Saudi Arabia

Abstract

Purpose –From generation to generation, the poor and less developed have always borne the negative

consequences of the extravagant lifestyles of the rich. The climate seems to perpetuate this injustice by

punishingthe good people with the consequences of the irresponsible acts of the wealthy.Therefore, this paper

aims to establish the relationshipbetween climate risk and carbon emissions. Then,this paper investigates the

economic consequencesof climate risk in both developedand developing countries.

Design/methodology/approach –This paper uses robusteconometrics, including f‌ixed effect and thetwo-

step systemgeneralised method of moments, on a large sampleof 175 countries from 2008 to 2019.

Findings –Unsurprisingly,this paper found thatclimate risks are negatively associatedwith carbon emissions,

indicatingthat countries withlower emissions are moreexposed to frequent andsevere climate-relateddisasters

than thosewith higher emissions.Additionally,this paper discovered thatclimate risk has a negativeimpact on

economicdevelopment, whichis more pronounced indeveloping countries.The results are robustto alternative

measurement and econometric modelling, including the system-generalized method of moments.

Originality/value –These f‌indings suggest that developing countries, the least contributors to climate

change, unfairlysuffer from the environmentally irresponsible actions of high-emittingdeveloped countries.

Keywords Climate change, Climate risk, Climate disaster, Carbon emission,

Developed and developing countries, Intrusion detection, Concept drift detection,

Online incremental learning

Paper type Research paper

1. Introduction

Historically,the world has not been fair to all countries, from civilisation to industrialisation.

This trend of unfairness has been attributedmainly to human greed and the quest for power

(Hunter, 2009). From generation to generation, the poor and less developed have always

borne the negative consequences of the extravagant lifestylesof the rich (Shue, 1993). Social

© Vincent Tawiah and Noha Alessa. Published by Emerald Publishing Limited. This article is

published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce,

distribute, translate and create derivative works of this article (for both commercial and non-

commercial purposes), subject to full attribution to the original publication and authors. The full terms

of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Conf‌lict of Interest: There is no conf‌lict of interest in this paper.

Funding Declaration:Princess Nourah bint AbdulrahmanUniversity Researchers Supporting Project

number (PNURSP2024R391), PrincessNourah bint Abdulrahman University, Riyadh, Saudi Arabia.

Competing Interest Informa tion: Thereis no competing interest on the paper.

IJCCSM

17,1

46

Received 26 December 2023

Revised14 July 2024

Accepted 29 August 2024

InternationalJournal of Climate

ChangeStrategies and

Management

Vol.17 No. 1, 2025

pp. 46-67

EmeraldPublishing Limited

1756-8692

DOI 10.1108/IJCCSM-01-2024-0008

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1756-8692.htm

and political policies have structured an unfair world. During civilisation and colonisation,

rich/advanced countries engaged in human slavery to build their nations at the expense of

others (Alemazung, 2010). Other countrieswere invaded, and resources were taken for little

or no cost. In the present day, these practices continue throughforeign investment and trade,

which exploit the poor by either dumping goods or rapidly extracting resources (Glaister

et al.,2020;Jauch, 2011). As if these actions were not enough, through foreign aid and

international diplomacy, advanced countries directly or indirectly dictate how other nations

should be governed (Alesinaand Dollar, 2000).

These actions have left scars of unfairness across the world. As the world continues to

battle to heal from the unfairnessof past actions, climate change appears to create a new level

of unfairness. In recent years, the world has seen the increasing wrath of nature towards

humans through frequent disasters such as f‌loods, droughts, bushf‌ires and cyclones. For

example, according to Eckstein et al. (2021), from 2000 to 2019, about 11,000 climate

disasters have caused approximately 500,000 deaths and $2.56tn in property loss. Unlike

existing unfairness,such as slavery and colonisation caused by greed and the quest for power

(Alemazung, 2010), at face value, climate change appears to be a natural occurrence that

affects every country regardlessof its development status. These natural disasters are a result

of our environmental irresponsibility. However, the question remains: Are these climate

punishment actions fairly distributed based on our actions? Are countries receiving a fair

punishment for theircontributing role to climate change?

In this paper, we attempt to answer these questions by examining the global trend of carbon

emissions and climate risk. Additionally,we analyse the relationship between various economic

indicators and climate risk to identify the countries that are bearing the highest costs of climate

change. Arguably,ensuring an equitable distribution of the consequences of climate change will

be a signif‌icant factor in determining which countries will sufferthe most. Essentially, countries

with high carbon emissions should experience greater impacts from climate change.

Prior studies have established that developed countries are higher emitters than developing

countries (Galeotti and Lanza, 1999;Mahapatra and Irfan, 2021;Wu et al., 2018). For example,

Wu et al. (2018) suggest that developed countries emit more greenhouse gases because they

use a lot of electronic gadgets and travel more. Regardless of the energy eff‌iciency of the latest

gadgets, frequent usage generates more emissions than less energy-intensive gadgets used in

developing countries. Furthermore, aff‌luent people drive their cars and f‌ly more, generating

high emissions (Heil and Wodon, 1997). Therefore, in fairness, developed countries should

bear more of the burden of climate change than developing countries.

Based on these arguments, we examine the relationship between carbon emission and

climate risk, as well as the economic consequences of climate risks. We use the

comprehensive measureof climate risk developed by Eckstein et al. (2021) at Germanwatch.

The climate risk measurecaptures the frequency and severity of climate risk-relateddisasters

in a country in both the long and short terms. Using a largesample of 175 countries between

2008 and 2019, we f‌ind that climate risk is negatively and signif‌icantly associated with

carbon emission, suggesting that high-emitting countries have a lower risk of climate

disaster. Thus, low-emitting countries are at a higher risk of climate-related disasters than

high-emitting countries. We also establish that climate risk negatively and signif‌icantly

impacts industrialisation,economic development and economic growth.

Further analysis demonstrates that our f‌indings are more pronounced for developing

countries than for developed countries. Specif‌ically, we found that climate risk does not

signif‌icantly affect developed countries, but the negative impact in developing countries is

highly signif‌icant. The probability of climate-related disasters occurring in developing

countries is high, and these risks are signif‌icantly detrimental to industrialisation, economic

International

Journal of Climate

Change Strategies

and Management

47