Climate justice is conceived as the intertemporal climate equity and equality exchange amongst generations. Sustainability—intended as the interplay amongst the economy, the society, the environment, and the governance—is essential to forge the climate justice theoretical framework. On this base, the study attempts to model the intertemporal choice of the status quo amongst generations in these four domains, making use of an overlapping generations (OLG) model making use of an intertemporal choice framework. The proxies detected are GDP growth (economy), environmental quality (environment), and labor growth, and environmental investment (society) as assumptions. The governance dimension is captured by the difference in wealth between young and old generations. The work aims at replying to the following research question: Which are the conditions for sustainable development such that climate justice holds? The intra-intergenerational exchange is defined in two periods, while the individual provides their preferred economic and environmental choice mix as consumption-saving. This study shows that keeping the business-as-usual scenario, young generations will have to bear the brunt of sustainable development. Additionally, reduced emissions are only achievable with increased efforts by the youth by reducing their leisure and consumption. These facts call for enhanced intergenerational sustainability and climate justice policies.

This paper studies how interaction between economic decision-making and environmental awareness affects US business cycle and GHG emissions in a two-sector DSGE model. We emphasize the mechanisms that relate carbon emissions dynamics, consumer behavior, and environmental awareness in a framework incorporating two classes of goods (i.e., “clean” and “dirty”). This paper offers three main results. First, green consumption preferences play a key role in emissions reduction when they internalize emissions concentrations. Second, a green preference shock is the second source of fluctuation in many sectoral variables and stabilizes the business cycle. Third, a pollutant supply shock leads to sustainable consumption procyclicality documented in US data, only if households are environmentally aware.

This study investigates the labor market dynamics and distributional consequences of the transition to a net-zero economy, with a particular focus on heterogeneity across worker types differentiated by skill level and sectoral employment. We employ a Dynamic Stochastic General Equilibrium (DSGE) model with search-and-matching (SAM) frictions in the labor market, incorporating three dimensions of heterogeneity: (i) differentiation between low-skilled and high-skilled workers; (ii) distinctions among employed, unemployed, and inactive individuals; and (iii) employment distributions across green and dirty sectors. Our main findings are threefold. First, in the short term, the adjustment to higher carbon taxes leads to a reduction in employment and a decline in skill wage premiums. Second, the green transition intensifies inequality in the long run by favoring high-skilled workers, assuming the share of low-skilled labor in the green sector remains persistently limited. Third, we assess the effectiveness of different carbon revenue recycling schemes, including progressive and uniform labor tax cuts and unemployment benefits. We find that aggregate welfare gains are higher when revenues are used to cut labor income taxes for low-skilled workers, and that unemployment benefits generate greater welfare gains than a uniform labor tax cut in the medium to long run.

Global warming represents a "hot" topic in our current daily life. This paper builds up and simulates a dynamic stochastic general equilibrium (DSGE) model in the spirit of Nordhaus (2008) while investigating consumers' behavior in a context where economic and environmental issues interact. The paper suggests that households do not care about global warming as much as they should. Even if households make pro-environmental consumption choices, their investment decisions focus on the economic aspect mainly. Therefore, households' propensity to consume clean products is not sufficient to produce benefits to the environment.