Publication: The Impacts of Climate Change on Poverty in 2030 and the Potential from Rapid, Inclusive, and Climate-Informed Development
Loading...
Published
2015-11
ISSN
Date
2015-12-18
Author(s)
Editor(s)
Abstract
The impacts of climate change on poverty depend on the magnitude of climate change, but also on demographic and socioeconomic trends. An analysis of hundreds of baseline scenarios for future economic development in the absence of climate change in 92 countries shows that the drivers of poverty eradication differ across countries. Two representative scenarios are selected from these hundreds. One scenario is optimistic regarding poverty and is labeled “prosperity;” the other scenario is pessimistic and labeled “poverty.” Results from sector analyses of climate change impacts—in agriculture, health, and natural disasters—are introduced in the two scenarios. By 2030, climate change is found to have a significant impact on poverty, especially through higher food prices and reduction of agricultural production in Africa and South Asia, and through health in all regions. But the magnitude of these impacts depends on development choices. In the prosperity scenario with rapid, inclusive, and climate-informed development, climate change increases poverty by between 3 million and 16 million in 2030. The increase in poverty reaches between 35 million and 122 million if development is delayed and less inclusive (the poverty scenario).
Link to Data Set
Citation
“Rozenberg, Julie; Hallegatte, Stephane. 2015. The Impacts of Climate Change on Poverty in 2030 and the Potential from Rapid, Inclusive, and Climate-Informed Development. Policy Research Working Paper;No. 7483. © World Bank. http://hdl.handle.net/10986/23447 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review(Washington, DC: World Bank, 2025-09-10)This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.Publication The Marshall Plan: Then and Now(Washington, DC: World Bank, 2025-10-14)This paper is a product of the Development Policy Team, Development Economics. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Geopolitical Risks and Trade(Washington, DC: World Bank, 2025-09-23)This paper studies the impact of geopolitical risks on international trade, using the Geopolitical Risk (GPR) index of Caldara and Iacoviello (2022) and an empirical gravity model. The impact of spikes in geopolitical risk on trade is negative, strong, and heterogeneous across sectors. The findings show that increases in geopolitical risk reduce trade by about 30 to 40 percent. These effects are equivalent to an increase of global tariffs of up to 14 percent. Services trade is most vulnerable to geopolitical risks, followed by agriculture, and the impact on manufacturing trade is moderate. These negative effects are partially mitigated by cultural and geographic proximity, as well as by the presence of trade agreements.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Environmental Reliance, Climate Exposure, and Vulnerability(World Bank, Washington, DC, 2015-11)This paper analyzes environmental reliance, poverty, and climate vulnerability among more than 7,300 households in forest adjacent communities in 24 developing countries. The data are from the detailed, quarterly income recording done by the Poverty Environment Network project. Observed income is combined with predicted income (based on households’ assets and other characteristics) to create four categories of households: income and asset poor (structurally poor), income rich and asset poor (stochastically non-poor), income poor and asset rich (stochastically poor), and income and asset rich (structurally non-poor). The income and asset poor generate 29 percent of their income from environmental resources, more than the other three categories. The income poor are more exposed to extreme and variable climate conditions. They tend to live in dryer (and hotter) villages in the dry forest zones, in wetter villages in the wet zones, and experience larger rainfall fluctuations. Among the self-reported income-generating responses to income shocks, extracting more environmental resources ranks second to seeking wage labor. Given high reliance on forest and other environmental resources, a concerning finding is that, in the Africa subsample (dominated by dry forests), the rate of forest loss is more than four times higher for the income asset poor compared with the income asset rich. Special attention should be given to the poorest households in dry areas, predominantly in Africa. They are (already) exposed to more extreme climate conditions, they suffer the highest forest loss, and the forest benefits are at risk in global warming scenarios.Publication Climate Change and Poverty : An Analytical Framework(World Bank Group, Washington, DC, 2014-11)Climate change and climate policies will affect poverty reduction efforts through direct and immediate impacts on the poor and by affecting factors that condition poverty reduction, such as economic growth. This paper explores this relation between climate change and policies and poverty outcomes by examining three questions: the (static) impact on poor people's livelihood and well-being; the impact on the risk for non-poor individuals to fall into poverty; and the impact on the ability of poor people to escape poverty. The paper proposes four channels that determine household consumption and through which households may escape or fall into poverty (prices, assets, productivity, and opportunities). It then discusses whether and how these channels are affected by climate change and climate policies, focusing on the exposure, vulnerability, and ability to adapt of the poor (and those vulnerable to poverty). It reviews the existing literature and offers three major conclusions. First, climate change is likely to represent a major obstacle to a sustained eradication of poverty. Second, climate policies are compatible with poverty reduction provided that (i) poverty concerns are carefully taken into account in their design and (ii) they are accompanied by the appropriate set of social policies. Third, climate change does not modify how poverty policies should be designed, but it creates greater needs and more urgency. The scale issue is explained by the fact that climate will cause more frequent and more severe shocks; the urgency, by the need to exploit the window of opportunity given to us before climate impacts are likely to substantially increase.Publication The Poverty and Welfare Impacts of Climate Change Quantifying the Effects, Identifying the Adaptation Strategies(Washington, DC: World Bank, 2012-07-20)The continued decline in global poverty over the past 100 years particularly in the past three decades is a remarkable achievement. In 1981, 52 percent of the world population lived on less than $1.25 a day. By 2005, that rate had been cut in half, to 25.0 percent, and by 2008 to 22.2 percent (World Bank 2012). Preliminary estimates for 2010 indicate that the extreme poverty rate has fallen further still; if follow-up studies confirm this, the Millennium Development Goal (MDG) of halving world poverty will have been reached five years early (World Bank 2010). In recent years, poverty reduction has continued in most countries, even after the financial, food, and fuel shocks of 2008-09. Although poverty remains widespread in South Asia and Sub-Saharan Africa, progress has been substantial: extreme poverty fell in South Asia from 54 percent in 1990 to 36 percent in 2008 (World Bank 2012). In Sub-Saharan Africa, where population growth exceeded the rate of poverty reduction, the number of extremely poor people increased from 290 million in 1990 to 356 million in 2008, yet over 2005-08, the region's poverty rate nonetheless 'fell 4.8 percentage points to less than 50 percent the largest drop in Sub-Saharan Africa since international poverty rates have been computed,' according to the latest edition of the World Development Indicators (WDI) (World Bank 2012). Although progress has been slower at the $2-a-day poverty line, the WDI noted that an increase in the absolute number of people living on $1.25-$2.00 a day reflects both the upward movement from extreme poverty and 'the vulnerabilities still faced by a great many people in the world.' climate change is likely to reduce agricultural productivity, especially in the tropical regions, and to directly affect poor people's livelihood assets including health, access to water and other natural resources, homes, and infrastructure (World Bank 2010). Moreover, increasing climatic variability manifesting as more frequent and erratic weather extremes, or 'weather shocks' will likely make poor households even more vulnerable, which could in turn exacerbate the incidence, severity, and persistence of poverty in developing countries. This volume not only surveys the research terrain concerning the effects of climate change on poverty but also looks closely at vulnerable rural populations (in a developing country, Indonesia, and in the newly industrialized Mexico) where weather shocks have measurable short term if not immediate effects on the farming livelihoods many depend on for both income and subsistence. The low-income farmers of rice in Indonesia and of corn and other staple crops in Mexico are at the human forefront of climate change.Publication Rural Households in a Changing Climate(2013-01)This paper argues that climate change poses two distinct, if related, sets of challenges for poor rural households: challenges related to the increasing frequency and severity of weather shocks and challenges related to long-term shifts in temperature, rainfall patterns, water availability, and other environmental factors. Within this framework, the paper examines evidence from existing empirical literature to compose an initial picture of household-level strategies for adapting to climate change in rural settings. The authors find that although households possess numerous strategies for managing climate shocks and shifts, their adaptive capacity is insufficient for the task of maintaining -- let alone improving -- household welfare. They describe the role of public policy in fortifying the ability of rural households to adapt to a changing climate.Publication Potential for Application of a Probabilistic Catastrophe Risk Modelling Framework to Poverty Outcomes(World Bank, Washington, DC, 2016-06)This paper analyzes the potential to combine catastrophe risk modelling (CAT risk modeling) with economic analysis of vulnerability to poverty using the example of drought hazard impacts on the welfare of rural households in Ethiopia. The aim is to determine the potential for applying a derived set of damage (vulnerability) functions based on realized shocks and household expenditure/consumption outcomes, onto a forward-looking view of drought risk. The paper outlines the CAT risk modeling framework and the role of the vulnerability module, which describes the response of an affected exposure to a given hazard intensity. The need to explicitly account for different household characteristics that determine vulnerability within our model is considered, analogous to how a CAT risk model would differentiate damage functions for buildings by different classes of construction. Results for a regression model are presented, estimating ex-post drought impacts on consumption for heterogeneous household types (e.g. with cattle, safety-net access, illness). Next, the validity/generalizability of the derived functions are assessed, to infer applicability of the derived relationships within a CAT risk modelling framework. In particular, the analysis focuses on external validity: whether the relationships established in the dataset can be used for forecasting outside of the sample used for analysis. The model is stress-tested using statistical methods of resampling. This involves randomly splitting the data into “training” and "testing" datasets. The tests show consistency of results across the datasets. Finally, future plans are outlined with regard to developing a fuller catastrophe risk model to combine with the consumption results.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Pathways for Peace(Washington, DC: World Bank, 2018)The resurgence of violent conflict in recent years has caused immense human suffering, at enormous social and economic cost. Violent conflicts today have become complex and protracted, involving more non-state groups and regional and international actors, often linked to global challenges from climate change to transnational organized crime. It is increasingly recognized as an obstacle to achieving the Sustainable Development Goals by 2030. This has given impetus for policy makers at all levels – from local to global – to focus on preventing violent conflict more effectively. Grounded in a shared commitment to this agenda, Pathways for Peace: Inclusive Approaches to Preventing Violent Conflict is a joint United Nations and World Bank study that looks at how development processes can better interact with diplomacy and mediation, security and other tools to prevent conflict from becoming violent. To understand ‘what works,’ it reviews the experience of different countries and institutions to highlight elements that have contributed to peace. Central to these efforts is the need to address grievances around exclusion from access to power, opportunity and security. States hold the primary responsibility for prevention, but to be effective, civil society, the private sector, regional and international organizations must be involved. Enhancing the meaningful participation of women and youth in decision making, as well as long-term policies to address the aspirations of women and young people are fundamental to sustaining peace.Publication World Development Report 2024(Washington, DC: World Bank, 2024-08-01)Middle-income countries are in a race against time. Many of them have done well since the 1990s to escape low-income levels and eradicate extreme poverty, leading to the perception that the last three decades have been great for development. But the ambition of the more than 100 economies with incomes per capita between US$1,100 and US$14,000 is to reach high-income status within the next generation. When assessed against this goal, their record is discouraging. Since the 1970s, income per capita in the median middle-income country has stagnated at less than a tenth of the US level. With aging populations, growing protectionism, and escalating pressures to speed up the energy transition, today’s middle-income economies face ever more daunting odds. To become advanced economies despite the growing headwinds, they will have to make miracles. Drawing on the development experience and advances in economic analysis since the 1950s, World Development Report 2024 identifies pathways for developing economies to avoid the “middle-income trap.” It points to the need for not one but two transitions for those at the middle-income level: the first from investment to infusion and the second from infusion to innovation. Governments in lower-middle-income countries must drop the habit of repeating the same investment-driven strategies and work instead to infuse modern technologies and successful business processes from around the world into their economies. This requires reshaping large swaths of those economies into globally competitive suppliers of goods and services. Upper-middle-income countries that have mastered infusion can accelerate the shift to innovation—not just borrowing ideas from the global frontiers of technology but also beginning to push the frontiers outward. This requires restructuring enterprise, work, and energy use once again, with an even greater emphasis on economic freedom, social mobility, and political contestability. Neither transition is automatic. The handful of economies that made speedy transitions from middle- to high-income status have encouraged enterprise by disciplining powerful incumbents, developed talent by rewarding merit, and capitalized on crises to alter policies and institutions that no longer suit the purposes they were once designed to serve. Today’s middle-income countries will have to do the same.Publication Poverty, Prosperity, and Planet Report 2024(Washington, DC: World Bank, 2024-10-15)The Poverty, Prosperity, and Planet Report 2024 is the latest edition of the series formerly known as Poverty and Shared Prosperity. The report emphasizes that reducing poverty and increasing shared prosperity must be achieved in ways that do not come at unacceptably high costs to the environment. The current “polycrisis”—where the multiple crises of slow economic growth, increased fragility, climate risks, and heightened uncertainty have come together at the same time—makes national development strategies and international cooperation difficult. Offering the first post-Coronavirus (COVID)-19 pandemic assessment of global progress on this interlinked agenda, the report finds that global poverty reduction has resumed but at a pace slower than before the COVID-19 crisis. Nearly 700 million people worldwide live in extreme poverty with less than US$2.15 per person per day. Progress has essentially plateaued amid lower economic growth and the impacts of COVID-19 and other crises. Today, extreme poverty is concentrated mostly in Sub-Saharan Africa and fragile settings. At a higher standard more typical of upper-middle-income countries—US$6.85 per person per day—almost one-half of the world is living in poverty. The report also provides evidence that the number of countries that have high levels of income inequality has declined considerably during the past two decades, but the pace of improvements in shared prosperity has slowed, and that inequality remains high in Latin America and the Caribbean and Sub-Saharan Africa. Worldwide, people’s incomes today would need to increase fivefold on average to reach a minimum prosperity threshold of US$25 per person per day. Where there has been progress in poverty reduction and shared prosperity, there is evidence of an increasing ability of countries to manage natural hazards, but climate risks are significantly higher in the poorest settings. Nearly one in five people globally is at risk of experiencing welfare losses due to an extreme weather event from which they will struggle to recover. The interconnected issues of climate change and poverty call for a united and inclusive effort from the global community. Development cooperation stakeholders—from governments, nongovernmental organizations, and the private sector to communities and citizens acting locally in every corner of the globe—hold pivotal roles in promoting fair and sustainable transitions. By emphasizing strategies that yield multiple benefits and diligently monitoring and addressing trade-offs, we can strive toward a future that is prosperous, equitable, and resilient.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.