Understanding climate inequalities is critical to understand the world we face. Climate change, and broader sustainability, will magnify the inequalities and magnify injustices. In this paper, Milliman’s Nick Spencer and members of the Institute and Faculty of Actuaries Inequality of Climate Change working party provide an introduction to these inequalities and discuss how to understand equality vs. equity vs. justice. The paper highlights the changes that everyone will face, the necessary considerations for future climate pathways—and the fact that it is in everyone’s interest to address these inequalities. 

The paper discusses: 

1. Introduction to climate inequality and climate justice. Climate inequality refers to the unequal distribution of climate change impacts among different individuals, communities and regions. Climate justice seeks to find solutions that consider the broader social perspectives of impacts, ability to pay and past responsibilities in order to safeguard rights and to share burdens and benefits equitably.
2. Social impacts of climate change. While awareness of direct climate change impacts like physical damages and policy interventions has grown, the social impacts remain underexplored. The poorest in society are disproportionately affected, exacerbating existing inequalities and introducing additional risks and injustices.
3. Types of climate inequality:
• Intergenerational. For example, younger generations are likely to face nearly four times more extreme weather events than older generations.
• Geographical. Certain regions are more vulnerable to climate impacts such as flooding.
• Gender-based. Women, particularly in low- and middle-income countries, face heightened impacts partly due to their dependence on natural resources and roles in agriculture.
• Socioeconomic. Outdoor workers are more exposed to extreme weather, affecting their health and productivity.
4. Climate justice. This concept addresses the responsibilities of current generations to future ones, the distribution of responsibilities to combat climate change, and the allocation of the limited “greenhouse gas budget.” The paper outlines the importance of a just transition for reaching a low-carbon economy.
5. Future implications. Without effective management, climate inequality will worsen income inequality, driving increased crime, reduced social cohesion and financial consequences such as diminished economic growth. Climate displacement, or the mass movement of people, also will occur.
6. Contributing to solutions. Actuaries, given their respected professional standing, can significantly influence public discourse on climate justice and support efforts on a just transition.

Finally, the paper encourages actuaries, and us all, to think critically about potential solutions and our role in fostering a fairer, more sustainable world.

Read the paper here.