Harvard Kennedy School’s Stone Program in Wealth Distribution, Inequality, and Social Policy welcomes Professor Lucas Chancel as the 2023-2024 Stone Visiting Scholar. Professor Chancel is an economist who specializes in inequality and in environmental policy. His work focuses on the measurement of economic inequality, its interactions with sustainable development and on the implementation of social and ecological policies. He is a tenured Associate Professor at Sciences Po and is the co-director of the World Inequality Lab at the Paris School of Economics.
Chancel is the author of Unsustainable Inequalities: Social Justice and the Environment (Harvard University Press, 2020). He is also the editor (with Thomas Piketty, Emmanuel Saez, and Gabriel Zucman) of World Inequality Report 2022 (Harvard University Press, 2022), and the editor (with Facundo Alvaredo, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman) of World Inequality Report 2018 (Harvard University Press, 2018). Most recently, he is the author of Climate Inequality Report 2023 (with Philipp Bothe and Tancrède Voituriez). Click here to see all his publications.
Q&A with Lucas Chancel
What do you think are the most pressing issues in the study of economic inequality now?
The past two decades were characterized by a “quantum leap” in economic inequality research: a lot of progress has been made on the measurement and analysis of income and wealth dynamics, thanks to the combination of household surveys, tax data and national accounts. This development shed light on the historical return of inequality which we observe in many countries, and what can be done about it. A lot remains to be done, however. Most countries in the world do not produce official distributional national accounts so it’s hard to check if governments are doing their job properly. In addition, tax incidence is still poorly measured (in particular in the emerging world, but also in many rich countries). We also need to progress in our understanding of global wealth inequality dynamics, which remain particularly limited.
Another pressing issue, from my point of view, is that we need to better understand how income and wealth inequality dynamics intersect with the energy transition issue. To honor its climate pledges, the US must move from about 6.5 billion tonnes of carbon dioxide equivalent emissions released over a year, to 4 billion tonnes in 2030 and to net zero by 2050. This will be a tremendous industrial effort. How will it impact inequality? It’s not so clear. Conversely, how might income and wealth inequality trends affect our ability to achieve these targets? We also lack data and conceptual models to systematically assess this. To make some progress in this area, it will be important to better understand who pollutes and how and which income/wealth groups are contributing more to decarbonization efforts. It’s also critical to better map (both “vertically” and “horizontally”) who is going to be negatively impacted by decarbonization and who is going to gain from it. The interesting part is that this is very much connected with all the work that has been done on income and wealth inequality dynamics over the past two decades.
What do you think are the most challenging methodological problems in the study of inequality?
To study the distributional consequences of the energy transition, we can build on earlier inequality research, but we’ll also need to solve new methodological issues which are specific to the environmental question. Today, researchers and public statisticians lack both data and methodologies to track pollution inequalities, between individuals and firms, over time and across countries, in a systematic manner. In some ways, this looks like the income and wealth inequality field twenty years back. Methodologically, it’s important to better measure the inequality of carbon footprints of individuals and firms. From a substantive perspective, we need to understand how can low and middle-class income growth be compatible with a huge degrowth in emissions – and this is not entirely trivial. Let’s face it: there is a huge industrial revolution ahead of us, which will redefine the value of capital and natural resources across the globe and within countries. To identify who will be gaining and losing from it, it will be necessary to combine fine-grained geographical data with socio-economic inequality data and pollution data.
Can you tell us about the research you will be doing during your time as the Stone Program’s Visiting Scholar?
I’ll be building on earlier work on global income and wealth inequality dynamics and will be focusing on the short and long-run dynamics of global wealth accumulation and concentration, thanks to the combination of surveys, tax data and national accounts, rich lists, as well as high-frequency data (such as rich lists). The objective is to better measure global wealth concentration and be in a better position to understand its drivers.
I also plan to focus on how inequality interacts with the energy transition and will seek to answer some of the methodological and substantive questions I’ve mentioned above. In earlier work, I’ve focused on how consumers across the income distribution are driving (or slowing-down) decarbonization and I am currently trying to understand the conditions under which investors can contribute to emissions reductions, mobilizing firm-level and asset ownership data. I’m also focusing on who is impacted by energy plant closures and how social and industrial policies might help cushion groups that are affected the most. To study these questions, I’m mobilizing administrative data (in particular some novel datasets obtained from Scandinavian countries), household surveys, environmental accounts as well as remote-sensing information from satellite imagery in a few key European countries and in the US.
Finally, I think that looking back at economic history can also help us address some of these questions. Better understanding how past energy transitions played out (how the substitution of an energy source to another actually happened, which groups in society gained from these shifts, which groups lost) can help us make sense of what is currently happening. Ultimately, I believe it’s key to better understand the political economy of energy transitions (and their potential winners and losers), to identify which coalitions of actors might oppose or support various transition options. This set of questions is part of a new book that I’m working on.