Climate Change and Income Inequality in Africa

Abstract

Policymakers and governments have raised concerns about the rate at which global climate change is occurring. The adverse impact of climate change on the environment and ecosystems has necessitated the formulation of mechanisms to address its effects. Empirical evidence has shown that climate change greatly affects health, water and food supply, and economic growth in Africa. However, given the emerging nature of climate change studies, little research has examined its impact on income inequality in Africa. This study therefore sought to examine the effects of climate change on income inequality in Africa and determine how climate adaptative capacity moderates such effects. The study used the two-step System Generalized Method of Moments (GMM) estimator to analyse secondary data for 37 African countries from 1995 to 2015. Using temperature change anomaly and Carbon dioxide as measures for climate change, the study found that rising temperatures have a negative and significant relationship with income inequality. The study also found agricultural productivity to be the main channel through which climate change affects inequality in Africa. As crop and livestock productivity decreases, income inequality in Africa increases. In examining the moderating role of adaptive capacity in the climate change and income inequality nexus, the study found that, Africa’s adaptive capacity does not moderate the threat of climate change on income inequality. The study recommends that adaptation efforts should be channelled specifically to the agricultural sector, particularly the poor small-scale farmers who are affected by the negative consequences of climate change in order to reduce the disparity in income distribution in Africa. Keywords: Adaptive Capacity, Africa, Climate Change, Agriculture, Income Inequality