Inequalities in Climate (Policy) Exposure and Preferences for Compensation

Authors – Lena Maria Schaffer, Zsuzsa Magyar

Abstract :

There exist significant inequalities in how people are exposed to the effects of climate change, as well as how they are affected by climate mitigation policies. Progressing global warming and more ambitious climate policies may exacerbate these inequalities. To strive for a just transition towards a green economy, scholars have recently argued for the importance of linking social and climate policy more consequentially to address inequalities linked to climate change (Bergquist et al. 2020, Büchs et al 2021). As Blanchard et al. (2023) suggest that compensation should be as targeted as possible to the losers of the policy ( avoiding windfall effects), we identify several groups that may lose out from a changing climate, climate policy or both. In our contribution, we focus on the link between social and climate policy to address inequality. We are interested in people’s perceptions of the deservingness of compensation for different affected groups. We explicitly compare how the distributional effects stemming from climate policy as well as those generated due to progressing climate change impact people’s preferences for redistribution. To this end, we randomly assigned three choice tasks to compare different groups that would be harmed due to more ambitious climate policy or due to the effects of global warming. We asked respondents to decide which group they would prefer to see supported by the state (forced choice) and to what extent. Our data comes from two representative surveys of the Swiss voting-age population in April/May 2021 and in June 2023. Both surveys were fielded in the months before a significant referendum on climate policy (revision of CO2 law in 2021 and the climate law in 2023). Thus, our study provides crucial insight into the public’s revealed preferences for redistribution during the context of an actual vote. We find that overall, poor households are overwhelmingly considered to be most deserving of state support and compensation. In general, however, we see more support for compensation targeted at losers from climate change processes (farmers or people living in the mountains) compared to losers from climate policy. We find significant heterogenous treatment effects along the renter – homeowner divide.

Results from this study may prove important to inform policymakers about public preferences or trade-offs with respect to helping to shield losers from the adverse, inequality -inducing effects of both climate change as well as decarbonisation policies.