Assessment of demographics of justice and equity impacts

This deliverable reports the activities conducted under Task D.5.3 of the ELEVATE project, focusing on the distributional effects of climate policies, the acceptability of revenue recycling schemes, and the integration of household-level data into Integrated Assessment Models (IAMs). Key findings include: Mapping Distributional Effects: We aim to understand how different segments of the population are affected. Traditionally, the literature looks into differences between income groups (e.g. the poorest 20% vs. the richest 20%). Our work shows significant heterogeneity in carbon intensity across households, with horizontal (within-income-group) differences often exceeding vertical (betweenincome-group) different. Based on a data-based covering 88 countries we identify which household characteristics (e.g. income, car ownership, cooking fuel use, urban/rural … ) are decisive for households being affected by price-based climate policies. Acceptability of Revenue Recycling: A systematic review shows that revenue recycling, particularly green spending (e.g., investments in renewable energy), significantly increases public support for carbon pricing. However, regional differences exist, with Africa, Latin America, and Asia-Pacific showing greater support for green spending compared to North America and Europe. Public preferences emphasize fairness and effectiveness, favouring targeted compensation over universal transfers. Linking to IAMs: The integration of household-level data into IAMs highlights the complex interplay between climate policy and inequality. In India, modelled results show that structural change exacerbates inequality more than climate policy, while carbon pricing slows economic transformation. In Brazil and France, climate policies have varying impacts on inequality depending on socioeconomic pathways, underscoring the need for tailored policy design. Overall, the findings emphasize the importance of nuanced, data-driven approaches to climate policy design, ensuring equity and public acceptance while addressing the diverse impacts on different socioeconomic groups