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  • Publication
    Dominican Republic Poverty Assessment 2023: Fast Tracking Poverty Reduction and Prosperity for All
    (Washington, DC: World Bank, 2023-11-08) World Bank
    In recent decades, economic growth in the Dominican Republic (DR) has been steady. However, growth has not occurred in such a way as to make the benefits widely and evenly available. In fact, although the DR economy grew faster than that of other LAC countries before the Covid-19 pandemic, its poverty rates and social outcomes remain broadly similar to them. This report seeks to explain this conundrum, as well as to expand the knowledge base to improve the effectiveness of ongoing poverty reduction policies in the DR. The Poverty Assessment draws primarily on new analytical work conducted in the DR, structured around four background notes on: (i) trends in monetary poverty and inequality, as well as the key drivers of those changes; (ii) nonmonetary poverty and its spatial dimensions; (iii) social assistance programs and their role in mitigating poverty; and (iv) climate change and its interaction with poverty. By helping to reduce the evidence gap in each of these areas, our analysis hopes to inform government policies and the national dialogue on poverty reduction. In addition, the note integrates existing analytical work and evidence produced inside and outside the Bank, including from its operations in the country.
  • Publication
    Pathways to Climate-Resilient Economic Inclusion: A Framework for Integrating Climate Action in Economic Inclusion Programs
    (Washington, DC: World Bank, 2023-10-26) Costella, Cecilia; Clay, Timothy; Donoghoe, Manann; Giron, Liz
    Climate change disproportionately impacts people living in poverty, threatening to plunge more than 130 million more people into extreme poverty by the end of this decade. In response, governments seek to align poverty alleviation efforts with climate adaptation and mitigation objectives, and are focusing on poor and vulnerable populations, particularly women. Economic inclusion (EI) approaches (a bundle of multidimensional interventions that support poor individuals, households, and communities to increase incomes and assets) can play an important role in addressing the challenges at the intersection of climate resilience and poverty reduction. This publication explores the links between climate change and economic inclusion and proposes pathways through which EI programs can more strategically support climate resilience. It presents a framework for Climate-Resilient Economic Inclusion that can help inform the design of both existing and new EI programs and provides practical examples of how EI programs align their design and operations with the framework.
  • Publication
    Background Note on Bringing Climate Change into Vulnerability Analysis
    (Washington, DC: World Bank, 2023-10-25) Baquié, Sandra; Foucault, Guillem
    Weather vulnerability is often assessed using historical data, but this can be very misleading in a world of changing climate. Weather refers to short-term atmospheric conditions, while climate is the weather averaged over a long period. With climate change, some places are becoming wetter, some drier, and extreme weather events, such as heatwaves, floods, droughts, and tropical cyclones, are becoming more likely. Hence, the nature of weather risks will vary considerably. Despite the magnitude of this shift, there is currently no widely accepted method for bringing climate change into catastrophe risk modeling. The objective of this note is to review, compare, and contrast the different techniques used in this literature to include climate change into vulnerability analysis. To do so, it summarizes recent research papers exploring how to bring climate change into catastrophe risk modeling. The note builds on this review to propose and explain a robust methodology and highlight its potential caveats. As such, this note is a first step towards unifying approaches and disseminating the analysis of climate change in vulnerability analysis. The method proposed in this note can be applied by researchers, economists, and public policy practitioners to study a wide range of topics, from the impact of climate change on diseases to stress-testing social protection programs.
  • Publication
    Does Hotter Temperature Increase Poverty and Inequality?: Global Evidence from Subnational Data Analysis
    (World Bank, Washington, DC, 2023-06-24) Dang, Hai-Anh H.; Trinh, Trong-Anh
    Despite a vast literature documenting the harmful effects of climate change on various socio-economic outcomes, little evidence exists on the global impacts of hotter temperature on poverty and inequality. Analysis of a new global panel dataset of subnational poverty in 134 countries finds that a one-degree Celsius increase in temperature leads to a 9.1 percent increase in poverty, using the US$1.90 daily poverty threshold. A similar increase in temperature causes a 0.8 percent increase in the Gini inequality index. The paper also finds negative effects of colder temperature on poverty and inequality. Yet, while poorer countries—particularly those in South Asia and Sub-Saharan Africa—are more affected by climate change, household adaptation could have mitigated some adverse effects in the long run. The findings provide relevant and timely inputs for the global fight against climate change as well as the current policy debate on the responsibilities of richer countries versus poorer countries.
  • Publication
    A Balancing Act for Brazil’s Amazonian States: An Economic Memorandum
    (Washington, DC: World Bank, 2023-05-18) Hanusch, Marek
    Brazil's nine Amazonian states, here collectively referred to as Amazônia, include some of the world's richest ecosystems, including the Amazon rainforest and parts of the Cerrado savanna and Pantanal wetlands. The region is also among Brazil’s poorest socioeconomically. As a result, sustainable, inclusive development of Amazônia calls for raising living standards while protecting natural forests. A Balancing Act for Brazil’s Amazonian States: An Economic Memorandum explores how a recalibrated development approach can achieve these goals. In the shorter term, there is an urgent need to halt deforestation--a massive destruction of natural wealth that poses risks to the climate and economy. Amazônia is Brazil’s deforestation hot spot, and the Amazon rainforest is approaching tipping points into broad and permanent forest loss. Reversing the recent increase in deforestation requires stronger land and forest governance, including land regularization and more effective law enforcement. In the longer term, both Brazil and Amazônia need a new growth model. This model would be anchored in productivity rather than resource extraction and it would diversify the export basket beyond commodities. A more balanced structural transformation requires the lagging urban sectors, such as manufacturing and services, to step up to promote economic growth, reduce pressure on the agricultural frontier, and generate jobs for Brazil and Amazônia's largely urban populations. The public-good value of Amazônia's forests could generate conservation finance linked to verifiable reductions in deforestation. Such financing would support a new development approach, combining forest protection, productivity, balanced structural transformation, sustainable production techniques (including the bioeconomy), and other measures to address the needs of Amazônia's urban and rural populations. This approach must also heed the needs and interests of Amazônia's traditional communities. Given both the value and the fragility of Amazônia's ecosystems, coupled with considerable socioeconomic local needs, the stakes are high—for Amazônia, Brazil, and the world.
  • Publication
    Gendered Impacts of Climate Change: Evidence from Weather Shocks
    (World Bank, Washington, DC, 2023-05-16) Fruttero, Anna; Halim, Daniel; Broccolini, Chiara; Coelho, Bernardo; Gninafon, Horace; Muller, Noël
    Climate change is one of the defining challenges of our time. While the impacts of climate change on people’s well-being can hardly be denied, it may not be as obvious that the impacts could differ by gender. However, as the COVID-19 pandemic has shown, a shock can impact men and women differently due to social norms and pre-existing gender differences. This paper reviews the economic literature linking weather shocks (such as floods, droughts, and extreme temperatures, among others) and a large range of outcomes (from endowments to economic opportunities and agency). Men and women indeed have specific vulnerabilities and exposures. Specific physiological vulnerabilities are relatively minor: boys are more vulnerable to shocks in utero and girls and women to heat. The biggest gendered impacts are due to existing gaps and social responses to shocks. In places with strong boy preferences, families facing scarcity due to disasters are more likely to give food and other resources to boys, take their daughters out of school or marry them young, or withdraw women from agricultural work so they focus on household chores. During or after weather shocks, boys can also be taken out of schools to be put at work and men working in agriculture are often forced to migrate to find alternative sources of income. Unless climate policy acknowledges and accounts for these differences, climate change will remain an amplifier of existing gender inequalities.
  • Publication
    Honduras Poverty Assessment: Toward a Path of Poverty Reduction and Inclusive Growth
    (World Bank, Washington, DC, 2023-02) Robayo-Abril, Monica; Rude, Britta; Cadena, Kiyomi; Espino, Ilya
    Honduras, already among the poorest countries in the Latin America and Caribbean (LAC) region, experienced weak poverty reduction in 2014–19 compared to other countries in the region. The COVID-19 pandemic and Hurricanes Eta and Iota led to a rise in poverty from 2019 to 2020; it is likely that poverty will remain above prepandemic levels in 2021. The economic rebound in 2021, as well as the ongoing conflict in Ukraine, led to an increase in food prices; at the same time, Honduras’s population is vulnerable to rising food prices and food insecurity is high. In 2019, the extreme poor spent almost half of their income on food. Additionally, food insecurity was persistently high. A striking feature of Honduras is the deep and widening urban-rural divide in terms of quality of life. There is a wide urban-rural poverty gap for both the moderate and the extreme poor, which reflects significant disparities in access to basic services such as electricity, water, and sanitation, and internet usage, as well as lower human capital accumulation and worsen labor market indicators in rural areas. While overall income inequality has been stagnant since 2014, inequality in rural areas has increased while in urban areas it has declined. The country is one of the most unequal countries in LAC. Hondurans continue to face deep and persistent disparities in access to and quality of education, with rural areas heavily penalized, even before the COVID-19 pandemic, despite high spending on education. Subnational disparities are particularly large; poverty continues to be most heavily concentrated in the country’s southwestern areas, in departments with higher shares of ethnic minorities, and in municipalities located in the south and southwest. This report focuses on the factors that have contributed to these observed poverty and inequality trends and patterns in Honduras.
  • Publication
    The Climate Implications of Ending Global Poverty
    (World Bank, Washington, DC, 2023-02) Wollburg, Philip; Hallegatte, Stephane; Mahler, Daniel Gerszon
    Previous studies have explored potential conflicts between ending poverty and limiting global warming, by focusing on the carbon emissions of the world’s poorest. This paper instead focuses on economic growth as the driver of poverty alleviation and estimates the emissions associated with the growth needed to eradicate poverty. With this framing, eradicating poverty requires not only increasing the consumption of poor people, but also the consumption of non-poor people in poor countries. Even in this more pessimistic framing, the global emissions increase associated with eradicating extreme poverty is small, at 2.37 gigatonnes of equivalent carbon dioxide in 2050, or 4.9 percent of 2019 global emissions. These additional emissions would not materially affect the global climate change challenge: global emissions would need to be reduced by 2.08 gigatonnes of equivalent carbon dioxide per year, instead of the 2.0 gigatonnes of equivalent carbon dioxide per year needed in the absence of any extreme poverty eradication. Lower inequality, higher energy efficiency, and decarbonization of energy can significantly ease this trade-off: assuming the best historical performance in all countries, the additional emissions for poverty eradication are reduced by 90 percent. Therefore, the need to eradicate extreme poverty cannot be used as a justification for reducing the world’s climate ambitions. When trade-offs exist, the eradication of extreme poverty can be prioritized with negligible emissions implications. The estimated emissions of eradicating poverty are 15.3 percent of 2019 emissions with the lower-middle-income poverty line at $3.65 per day and or 45.7 percent of 2019 emissions with the $6.85 upper-middle-income poverty line. The challenge to align the world’s development and climate objectives is not in reconciling extreme poverty alleviation with climate objectives but in providing middle-income standards of living in a sustainable manner.
  • Publication
    Droughts and Welfare in Afghanistan
    (World Bank, Washington, DC, 2023-01) Kochhar, Nishtha; Knippenberg, Erwin
    This paper studies the effect of the 2018 drought on household consumption and poverty in Afghanistan, a semi-arid and conflict-affected country. The paper combines geolocated household data with remote-sensing weather data on precipitation, vegetation, and temperature. The findings show that drought-like conditions decreased monthly per capita consumption expenditures and hence increased poverty, with a highly nonlinear relationship between consumption and weather shocks. When forced to cut back, households reduced nonfood consumption to maintain their food consumption; only under severe stress did they reduce food consumption. Households that owned agricultural land were more resilient to the 2018 drought. Based on the historical distribution of weather shocks, estimates of vulnerability to poverty suggest that 62.5 percent of people have a one in four probability of falling into poverty due to weather shocks. Given that climate change will exacerbate the frequency and severity of future droughts, these findings highlight the importance of investments in resilience and shock-responsive social protection to supplement urgent humanitarian assistance.
  • Publication
    Malawi Country Climate and Development Report
    (World Bank, Washington, DC, 2022-10) World Bank Group
    This Country Climate and Development Report aims to support Malawi’s efforts to achieve its development goals within a changing climate by quantifying the impacts of climate change on the economy and highlighting key policies and interventions that are needed to strengthen climate resilience. The analysis includes climate modeling across multiple scenarios to account for the inherent uncertainty in climate projections; and sector-by-sector analysis and assessment of economywide impacts to identify the biggest impacts. It examines Malawi’s current policy landscape and identifies needed reforms; considers how Malawi can best protect its most vulnerable households; and considers how the country can finance its ambitious development and climate agenda, including the key role of the private sector. The analysis shows that climate change will impose large costs on the economy and on already vulnerable households. If Malawi stays on its current low-growth development trajectory, climate change could reduce GDP by 3-9 percent in 2030, 6-20 percent in 2040, and 8-16 percent by 2050). The analysis also clearly demonstrates that development, as set out in Malawi’s Vision 2063, provides a strong basis for strengthening resilience to climate impacts. If Malawi was to accelerate implementation of policies and programs envisioned in the Vision 2063 the development trajectory would shift to a higher growth path and climate change impacts would be significantly reduced. But the Vision 2063 development path will not be enough and building greater resilience to climate change will require doing different things and doing things differently. With additional adaptation measures, the analysis shows that not only is the impact of climate change on GDP much smaller, GDP is higher with climate change and adaptation when compared to the counterfactual with no climate impacts; losses range from -1 to 3 percent in 2030 and 2040, and 1 to 4 percent in 2050.