Carbon Pricing and Transit Accessibility to Jobs : Impacts on Inequality in Rio deJaneiro and Kinshasa

Urban transport is a major driver of global carbon dioxide emissions. Without strong mitigationpolicies, rapid urbanization, especially in developing countries, is expected to exacerbate the problem. There is agrowing consensus on the fundamental role of carbon pricing for achieving reductions in carbon dioxide emissions.However, carbon pricing policies are frequently criticized and resisted for having adverse distributional impacts,which could hinder their implementation, particularly when implemented as a fuel levy—which would impact privatevehicle usage but may also affect transit services such as buses. Currently, there is a lack of evidence thatquantifies these negative impacts, especially on people’s ability to reach economic opportunities and services. Tothis end, this paper studies the impact of a uniform carbon price, as one of the most commonly discussed climatepolicies, on access to employment opportunities via transit services in Kinshasa and Rio de Janeiro. Reduced access tojobs would contribute to fragmented urban labor markets and thus lead to negative social outcomes. Unlike most previousstudies, this study defines access as being constrained by both travel time and travel budget. The results indicatethat fuel price increases (simulating increases induced by a carbon tax) reduce accessibility, but the effect is lower inmore compact and walkable cities as well as in cities that have green transit options. The paper also shows that fuelprice increases have spatially and socially disparate outcomes, with the lowest income communities not necessarilybeing the most affected, in part because even in the absence of carbon pricing, they are found to be priced out of usingtransit services. The results demonstrate the importance of strategies and investments, such as land use planning anddecarbonized transit services, but also possibly complementary social protection programs (such as targetedsubsidies, or even cash transfers), to mitigate the negative distributional consequences of carbon pricing policies.