How Climate Policies Hurt the Poor
The world is in great danger of spending scarce resources on climate policies that hurt rather than help its poorest people. Governments should instead focus on growth-enhancing measures such as trade liberalization, which provide a pathway to increased welfare and greater equality.
NEW YORK – Over the past 25 years, nearly 1.2 billion people around the world have been lifted out of poverty, while both malnutrition and the risk of death from air pollution have decreased. Taken together, these achievements are nothing short of a miracle. But two global trends now threaten to slow the momentum in reducing poverty.
The first is nationalist opposition to free trade. Rising protectionism is imperiling economic growth – including in the world’s poorest countries, which would benefit most from a more open global trading system. Concluding the long-stalled Doha Round of global trade talks, for example, could make the world $11 trillion richer each year by 2030 and lift 145 million more people out of poverty.
Free trade has costs, and governments should spend more to support vulnerable populations in rich countries. Yet these costs are massively outweighed by the benefits to consumers and producers. Opposition to free trade thus runs counter to the economic evidence.