Implementation of carbon pricing in an aging world calls for targeted protection schemes

Peipei Tian; Kuishuang Feng; Heran Zheng; Klaus Hubacek; Jiashuo Li; Honglin Zhong; Xiangjie Chen; Laixiang Sun

doi:10.1093/pnasnexus/pgad209

Implementation of carbon pricing in an aging world calls for targeted protection schemes

PNAS Nexus. 2023 Jul 18;2(7):pgad209. doi: 10.1093/pnasnexus/pgad209. eCollection 2023 Jul.

Authors

Peipei Tian¹, Kuishuang Feng², Heran Zheng³, Klaus Hubacek⁴, Jiashuo Li¹, Honglin Zhong¹, Xiangjie Chen², Laixiang Sun^{2

5}

Affiliations

¹ Institute of Blue and Green Development, Shandong University, 180 Wenhua Xilu, Weihai, 264209, China.
² Department of Geographical Sciences, University of Maryland, 2181 LeFrak Hall, College Park, MD 20742, USA.
³ The Bartlett School of Sustainable Construction, University College London, Gower Street, London, WC1E 6BT, UK.
⁴ Integrated Research on Energy, Environment and Society, Energy and Sustainability Research Institute Groningen, University of Groningen, Nijenborgh 6, Groningen, 9747 AG, The Netherlands.
⁵ School of Finance & Management, SOAS University of London, 10 Thornhaugh Street, Russell Square, London, WC1H 0XG, UK.

Abstract

Understanding the impact of climate fiscal policies on vulnerable groups is a prerequisite for equitable climate mitigation. However, there has been a lack of attention to the impacts of such policies on the elderly, especially the low-income elderly, in existing climate policy literature. Here, we quantify and compare the distributional impacts of carbon pricing on different age-income groups in the United States, the United Kingdom, and Japan and then on different age groups in other 28 developed countries. We find that the elderly are more vulnerable to carbon pricing than younger groups in the same income group. In particular, the low-income elderly and elderly in less wealthy countries face greater challenges because carbon pricing lead to both higher rate of increase in living cost among low-income elderly and greater income inequality within the same age group. In addition, the low-income elderly would benefit less than the younger groups within the same income group in the commonly proposed carbon revenues recycling schemes. The high vulnerability of the low-income elderly to carbon pricing calls for targeted social protection along with climate mitigation polices toward an aging world.

Keywords: aging; carbon pricing; carbon revenues recycling; climate change mitigation.