1️⃣+2️⃣ Together, accounting for inequality and international climate finance reduces optimal global emissions by 31% compared to a policy that excludes these factors.

Main reason: disproportionately high climate damages in poorer countries.

Key intuition: By assigning lower weight to the welfare of poorer regions, Negishi weights effectively also downweight the regions most impacted by climate change (especially Africa).

In simulations with the integrated assessment model RICE, I find that accounting for global inequality increases the optimal stringency of global climate policy, both if carbon prices are allowed to be regionally differentiated and if they are constrained to be globally uniform.

1️⃣ Climate change is global & long-term➡️ Optimal carbon prices depend on how we aggregate costs & benefits across countries and over time.

🕓Carbon prices are famously sensitive to discount rates.
🌐I focus on how costs & benefits are aggregated across countries.