The Distributional Effects of Climate Change: Evidence from Iran

Climate change has heterogeneous effects on poor and wealthy households due to differences in vulnerabilities exposure. However, few papers provide estimates the magnitude of climate impacts across income distribution. In this paper, we combine 21 rounds household expenditure surveys from Iran for period 1998 2018 construct a large sample rural urban households. Using within-district variation temperature, show that one-degree Celsius increase annual temperature leads 8.1 4.7 percent decreases per capita expenditures, respectively. We find impact is twice average effect poorest decile. Furthermore, evidence available resources determine play more important role than difference exposure change. Our findings suggest compensatory policies should target households, as poverty stronger determinant being an agricultural worker or residing already hot areas.