International Review of Environmental and Resource Economics > Vol 12 > Issue 2-3

Climate Policies, Distributional Effects and Transfers Between Rich and Poor Countries

Snorre Kverndokk, Ragnar Frisch Centre for Economic Research, Norway,
Suggested Citation
Snorre Kverndokk (2018), "Climate Policies, Distributional Effects and Transfers Between Rich and Poor Countries", International Review of Environmental and Resource Economics: Vol. 12: No. 2-3, pp 129-176.

Publication Date: 28 Nov 2018
© 2018 S. Kverndokk
Environmental economics: Climate Change,  Climate Change,  Economic Theory,  Public Economics: Public Goods
JEL Codes: D63D64E22H23Q54
Inter- and intragenerational equityclimate financemigrationNorth-South models


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In this article:
1. Introduction 
2. Equity Principles in Climate Policy 
3. Equity Preferences in Economic Models of Climate Policies 
4. Transfers Between Rich and Poor Countries 
5. Concluding Remarks 


This paper studies the role of equity preferences and distribution in climate policies by presenting mechanisms and results from dynamic North-South models. If policy makers express preferences regarding the distributive outcome of policies, they may adopt climate policies that influence the distribution in their preferred direction. A better distribution of outcomes may result even in the absence of such preferences if there exist strategic reasons for transfers from the rich to the poor countries. We also present results concerning when such transfers do and do not work according to policy makers’ intentions. A transfer that proceeds from the poor to the rich countries is climate migration. This may have distributional consequences and possibly increase the incentives of the rich countries to implement climate policies that mitigate negative distributional effects, even if their main concern is with their own outcomes.