We live in the same planet but are we on the same boat? : an analysis of the distributive impacts of the climate crisis through the model TITANIC

This thesis investigates how the climate change physical risks influence income distribution in Italy, a Global North country highly exposed to climate risks due to its Mediterranean location. To address this question, after the introduction and literature review, Chapter 3 develops TITANIC (Temperatures Impact and Transitions Analysis: Navigating Inequalities and Climate), an Ecological Stock–Flow Consistent Input–Output model that includes a 26 industries disaggregation of the productive sector and the disaggregation of the household sector into three social classes (Workers, Managers, and Capitalists). Chapter 4 is dedicated to the model’s calibration procedure, that uses data from multiple sources including, national accounts (EUROSTAT), Input-Output tables (EXIOBASE), surveys (SHIW), and many others (INPS, EU-KLEMS, ISTAT, IPCC). The model’s climate scenario is SSP3.70. This procedure uses the model structure and an empirical estimation of some equations to generate a baseline scenario which is then confronted with scenarios that include climate damages. The final two chapters (5 and 6) display the results of the Demographic Effects and of the Chronic and Acute Supply Side Physical Risks. Simulation results show that climate change impacts significantly the economy. The effects propagate unevenly across classes, amplifying pre-existing inequalities under most, but not all, scenarios. Moreover, when multiple risks are considered, the combined effect is typically different than the sum of the individual effect, because the former is the result of a non-linear interaction of the latters. In conclusion, by combining ecological and distributional perspectives, the thesis contributes to understanding how climate change directly reshapes economic structures and social equity, allowing a clear identification of the impact of each physical risk channel.