Publication: Rethinking Resilience: Adapting to a Changing Climate
Loading...
Files in English
0 downloads
Published
2025-10-31
ISSN
Date
2025-10-31
Author(s)
Editor(s)
Abstract
Climate change is accelerating, and harmful weather events—such as extreme storms, droughts, heat waves, or wildfires—are becoming more frequent and severe. Lower-income countries suffer more deaths and lasting losses from disasters than richer countries. Climate shocks push vulnerable households into poverty and cause small businesses to fail, reversing development gains.
"Rethinking Resilience" urges developing countries to adopt policies that empower individuals, households, farms, and firms to take proactive measures. Current approaches rely too heavily on government programs and investments, such as subsidies and cash transfers, which are reactive rather than preventive. Developing economies lack the resources of high-income countries, making them more vulnerable.
To build resilience, developing countries should focus on raising household incomes, delivering reliable public information, and developing robust insurance markets. Resilience measures should prioritize income growth, reliable information, and private insurance, with infrastructure and public interventions rounding out the package. Utilizing this five-pronged strategy, governments can empower households, farms, and firms to build resilience successfully.
Link to Data Set
Citation
Shilpi, Forhad, Matthew E. Kahn, and Claudia Berg. 2025.
Rethinking Resilience: Adapting to a Changing Climate. Policy Research Report. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO.
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Microfinance and Moneylenders: Long-Run Effects of MFIs on Informal Credit Market in Bangladesh(World Bank, Washington, D.C., 2013-09)Using two surveys from Bangladesh, this paper provides evidence on the effects of microfinance competition on village moneylender interest rates and households' dependence on informal credit. The views among practitioners diverge sharply: proponents claim that competition of microfinance institutions reduces both the moneylender interest rate and households' reliance on informal credit, while the critics argue the opposite. Taking advantage of recent econometric approaches that address selection on unobservables without imposing standard exclusion restrictions, this paper finds that microfinance competition does not reduce moneylender interest rates, thus partially repudiating the proponents. The effects are heterogeneous; there is no perceptible effect at low levels of coverage, but when microfinance coverage is high enough, the moneylender interest rate increases significantly. In contrast, households' dependence on informal credit tends to go down after they become a member of a microfinance institution, which contradicts part of the critic's argument. The evidence is consistent with a model where microfinance institutions draw away better borrowers from the moneylender, and fixed costs are important in informal lending.Publication Firm-Level Climate Change Adaptation(Washington, DC: World Bank, 2025-03-10)Are firms adapting to climate change? This paper studies this question by combining geocoded World Bank Enterprise Survey data with spatially granular weather data to estimate temperature response functions for nearly 160,000 firms in 134 countries over a 15-year period. Our results show that market imperfections in low- and middle-income countries constrain firms’ ability to adapt. Small and medium-size firms in low- and low-middle income countries are most vulnerable, with revenues declining by 12 percent in years with temperatures 0.5◦C above historical averages. The impact is equally strong for manufacturing and services firms and result from declines in labor productivity and wages. Heat-sensitive sectors and less resilient firms are more severely affected, reinforcing the causal interpretation. Unique firm-level information on policy constraints including limited financing, burdensome regulations, and unsafe conditions suggest that such factors raise adaptation costs, undermining economic resilience to climate change.Publication Firm Adaptation to Climate Risk in the Developing World(Washington, DC: World Bank, 2024-06-11)How firms in the developing world adapt to changes in weather extremes will play a key role in determining their nation’s economic growth. This survey of the recent microeconomics adaptation literature suggests that although firm competitiveness is negatively affected by weather events, firms may bounce back better under certain conditions. The adaptation and resilience of firms to climate change depend on their capabilities, the available information on risks, and the depth of insurance and financial markets. As real-time weather forecasting improves, firms are better informed about these risks and this affects their decisions regarding their location, production, and configuration of supply chains. A firm’s resilience also depends on the quality of public investment in infrastructure and the social safety net. Understanding that market frictions can slow the pace of adaptation, the paper concludes with some insights on the options available to policy makers.Publication Do Land Market Restrictions Hinder Structural Change in a Rural Economy?(World Bank, Washington, DC, 2015-12)This paper analyzes the effects of land market restrictions on structural change from agriculture to non-farm in a rural economy. This paper develops a theoretical model that focuses on higher migration costs due to restrictions on alienability, and identifies the possibility of a reverse structural change where the share of nonagricultural employment declines. The reverse structural change can occur under plausible conditions: if demand for the non-agricultural good is income-inelastic (assuming the non-farm good is non-tradable), or non-agriculture is less labor intensive relative to agriculture (assuming the non-farm good is tradable). For identification, this paper exploits a natural experiment in Sri Lanka where historical malaria played a unique role in land policy. The empirical evidence indicates significant adverse effects of land restrictions on manufacturing and services employment, rural wages, and per capita household consumption. The evidence on the disaggregated occupational choices suggests that land restrictions increase wage employment in agriculture, but reduce it in manufacturing and services, with no perceptible effects on self-employment in non-agriculture. The results are consistent with the migration costs model, but contradict two widely discussed alternative mechanisms: collateral effect and property rights insecurity. This paper also provides direct evidence in favor of the migration costs mechanism.Publication Adaptation to a Changing Climate in the Arab Countries : A Case for Adaptation Governance and Leadership in Building Climate Resilience(Washington, DC: World Bank, 2012-12-01)Adapting to climate change is not a new phenomenon for the Arab world. For thousands of years, the people in Arab countries have coped with the challenges of climate variability by adapting their survival strategies to changes in rainfall and temperature. Their experience has contributed significantly to the global knowledge on climate change and adaptation. But over the next century global climatic variability is predicted to increase, and Arab countries may well experience unprecedented extremes in climate. Temperatures may reach new highs, and in most places there may be a risk of less rainfall. Under these circumstances, Arab countries and their citizens will once again need to draw on their long experience of adapting to the environment to address the new challenges posed by climate change. This report prepared through a consultative process with Government and other stakeholders in the Arab world assesses the potential effects of climate change on the Arab region and outlines possible approaches and measures to prepare for its consequences. It offers ideas and suggestions for Arab policy makers as to what mitigating actions may be needed in rural and urban settings to safeguard key areas such as health, water, agriculture, and tourism. The report also analyzes the differing impacts of climate change, with special attention paid to gender, as a means of tailoring strategies to address specific vulnerabilities. The socioeconomic impact of climate change will likely vary from country to country, reflecting a country's coping capacity and its level of development. Countries that are wealthier and more economically diverse are generally expected to be more resilient. The report suggests that countries and households will need to diversify their production and income generation, integrate adaptation into all policy making and activities, and ensure a sustained national commitment to address the social, economic, and environmental consequences of climate variability. With these coordinated efforts, the Arab world can, as it has for centuries, successfully adapt and adjust to the challenges of a changing climate.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2025: Standards for Development(Washington, DC: World Bank, 2025-12-11)Standards make everyday life run smoothly. You rarely notice them: the credit card that works in any corner of the world, the Wi-Fi signal that connects a remote village to the cloud, or the vaccine vial that fits syringes from Dakar to Delhi. When standards work, they build trust. They free people and firms to focus on creating, trading, and innovating, confident that the systems around them will hold. When standards fail, the effects are immediate and draining. Payments are declined, signals drop, vaccines spoil—and instead of being productive, people spend their energy just meeting their basic needs. Standards, in short, are the hidden infrastructure of modern economies—and they have never been more important. Developing countries today must contend with a thicket of increasingly stringent international standards, a product of globalization and rapid technological change. Using standards—and shaping them—is now a prerequisite for export growth, technology diffusion, and the efficient delivery of public services. Yet standards are too often overlooked by policy makers, especially in developing countries. World Development Report 2025: Standards for Development provides the most comprehensive assessment of the global landscape of standards today and how they can be used to accelerate economic development. It offers a practical framework for countries at all stages of development. Countries at the earliest stage should adapt international standards to suit local conditions when needed, whereas at more advanced stages, they should aim to align domestic markets with international standards. Meanwhile, all countries should author international standards in priority areas.Publication Defueling Conflict: Notes From the Field(Washington, DC: World Bank, 2025-12-01)Defueling Conflict: Notes from the Field explores the operationalization of conflict sensitivity and environmental peacebuilding, synthesizing tools and lessons learned from the World Bank's engagement in this field. It builds directly on the 2022 World Bank report Defueling Conflict: Environment and Natural Resource Management as a Pathway to Peace, which clarified the linkages between the environment, FCV risks, and peacebuilding opportunities. While the 2022 report provided the “why,” this new publication focuses on the “how,” demonstrating practical applications across key project and strategic entry points: upstream analytics that inform downstream operations; project design (contextual risks analysis, theories of change); safeguards; Monitoring, Evaluation, and Learning; and institutional capacity building. The report aims to: provide practical tools to integrate FCV and NRM considerations across the program cycle; demonstrate innovative methods to measure and monitor outcomes, and to build the evidence base; and serve as a resource for institutions looking to build environmental peacebuilding and conflict sensitivity capacities.Publication A Breath of Change: Solutions for Cleaner Air in the Indo-Gangetic Plains and Himalayan Foothills(Washington, DC: World Bank, 2025-12-05)Air pollution across the Indo-Gangetic Plains and Himalayan Foothills (IGP-HF) has reached critical levels, threatening health and productivity for nearly one billion people. The impacts are severe: cardiovascular and respiratory diseases have become leading causes of illness and death, average life expectancy in the IGP-HF region is shortened by more than three years, and around one million people die prematurely each year from exposure to polluted air. The associated economic damage is estimated at about 10 percent of regional gross domestic product (GDP) annually, driven by lost labor productivity, higher healthcare costs, and reduced human capital. This Solutions Book, A Breath of Change, sets out a practical roadmap for achieving the region’s shared, intermediate target of reducing annual average PM2.5 concentrations below 35 µg/m³ by 2035 (“35 by 35”), while laying the foundation for progressively cleaner air. Building on the diagnostics and country experiences synthesized in Striving for Clean Air, the solutions book moves from why clean air matters and what drives pollution to how to address air pollution. In other words, how coordinated, feasible, and evidence-based solutions can be implemented at scale. The IGP-HF airshed, an interconnected system spanning 13 jurisdictions across Bangladesh, Bhutan, India, Nepal, and Pakistan, demands solutions that are both multi-sectoral and multi-jurisdictional. Chapter 1 explains why air quality matters in the IGP-HF. Chapter 2 presents sources of air pollution. The Solutions Book highlights a portfolio of interventions in each of the five key pollution emitting sectors: scaling up access to clean cooking fuels and appliances in chapter 3; electrifying and modernizing industrial boilers, furnaces, kilns and thermal power plants in chapter 4; accelerating the transition to electric and efficient vehicles alongside improvements in fuel quality, and strengthening of non-motorized transport in the transport sector in chapter 5; promoting sustainable agricultural crop residue, livestock manure and fertilizer management in chapter 6; and improving waste collection, segregation, and recycling in chapter 7. In parallel, protective sectors, particularly health in chapter 8 and education in chapter 9, play a vital role in helping people cope while air quality remains poor. ross-cutting themes are woven throughout the sectoral chapters, with deeper exploration of governance frameworks, market-based instruments and regional cooperation provided in chapters 10 to 12.Publication The Global Findex Database 2025: Connectivity and Financial Inclusion in the Digital Economy(Washington, DC: World Bank, 2025-07-16)The Global Findex 2025 reveals how mobile technology is equipping more adults around the world to own and use financial accounts to save formally, access credit, make and receive digital payments, and pursue opportunities. Including the inaugural Global Findex Digital Connectivity Tracker, this fifth edition of Global Findex presents new insights on the interactions among mobile phone ownership, internet use, and financial inclusion. The Global Findex is the world’s most comprehensive database on digital and financial inclusion. It is also the only global source of comparable demand-side data, allowing cross-country analysis of how adults access and use mobile phones, the internet, and financial accounts to reach digital information and resources, save, borrow, make payments, and manage their financial health. Data for the Global Findex 2025 were collected from nationally representative surveys of about 145,000 adults in 141 economies. The latest edition follows the 2011, 2014, 2017, and 2021 editions and includes new series measuring mobile phone ownership and internet use, digital safety, and frequency of transactions using financial services. The Global Findex 2025 is an indispensable resource for policy makers in the fields of digital connectivity and financial inclusion, as well as for practitioners, researchers, and development professionals.Publication Reboot Development: The Economics of a Livable Planet(Washington, DC: World Bank, 2025-09-01)“Reboot Development: The Economics of a Livable Planet” explores how the foundational natural endowments of land, air, and water—long taken for granted—are under growing threat, putting at risk the very progress they helped create. For generations, natural resources have powered development, supporting health, food, energy, and economic opportunity. Today, strains on these resources are intensifying. This report argues that failing to maintain a livable planet is not merely a distant environmental concern, but a present economic threat. Drawing on new data, the report shows that over 90 percent of the world is exposed to poor air quality, degraded land, or water stress. Loss of forests cuts rainfall, dries soils, and worsens droughts, costing billions of dollars. The nitrogen paradox emerges—fertilizers boost yields but overuse in some regions harms crops and ecosystems. Meanwhile, air and water pollution silently damage health, productivity, and cognition, sapping human potential. The report warns that these hidden costs are too large to ignore. Yet the message is not one of constraint but of possibility. Nature, when wisely stewarded, can drive growth, create jobs, and build resilience. The report shows that more efficient resource use—like better nitrogen management and forest restoration—yields benefits that far exceed the costs. It also urges a shift to cleaner sectors and producing “better things,” noting that these provide new sources of growth, creating more jobs per dollar invested. The findings are clear: Investing in nature is not only good for the planet, it is smart development.