KARACHI: A new World Bank report shows that climate change is an acute threat to poorer people across the world, with the power to push more than 100 million people back into poverty over the next fifteen years. And the poorest regions of the world – Sub-Saharan Africa and South Asia – will be hit the hardest.
But the report – Shock Waves: Managing the Impacts of Climate Change on Poverty – also points to a way out. This requires that poverty reduction and development work continue as a priority while taking into account a changing climate. It also means taking targeted action to help people cope with climate shocks – such as developing early warning systems and flood protection, and introducing heat-resistant crops. At the same time, efforts to reduce emissions should accelerate, and be designed to protect the poor.
Climate change threatens the objective of sustainably eradicating poverty. Poor people and poor countries are exposed and vulnerable to all types of climate-related shocks- natural disasters that destroy assets and livelihoods; waterborne diseases and pests that become more prevalent during heat waves, floods, or droughts; crop failure from reduced rainfall; and spikes in food prices that follow extreme weather events.
Climate related shocks also affect those who are not poor but remain vulnerable and can drag them into poverty-for example, when a flood destroys a microenterprise, a drought decimates a herd, or contaminated water makes a child sick. Such events can erase decades of hard work and asset accumulation and leave people with irreversible health consequences. Changes in climate conditions caused by increasing concentrations of greenhouse gases (GHGs) in the atmosphere can worsen these shocks and slow down poverty reduction.
Ending poverty will not be possible if climate change and its effects on poor people are not accounted for and managed in development and poverty-reduction policies. But neither can the climate be stabilized without acknowledging that ending poverty is an utmost priority. The goal of maintaining climate change below a 2°C increase in global temperature above preindustrial levels-the very goal the international community has committed to-will require deep structural changes in the world economy. These changes will affect the conditions under which poor people succeed or fail to escape poverty. Emissions-reduction policies can increase energy and food prices, which represent a large share of poor people’s expenditures. But these same policies can be designed to protect, and even benefit, poor people-for instance, by using fiscal resources from environmental taxes to improve social protection.
Ending poverty and stabilizing climate change will be two unprecedented global achievements and two major steps toward sustainable development-that is, development that balances the economic, social, and environmental considerations. But these two objectives cannot be considered in isolation: they need to be jointly tackled through an integrated strategy. This report brings together these two objectives-ending poverty and stabilizing climate change-and explores how they can more easily be achieved if considered together. It examines the potential impact of climate change and climate policies on poverty reduction. It also provides guidance on how to create a “win-win” situation so that climate change policies contribute to poverty reduction and poverty-reduction policies contribute to climate change mitigation and resilience building.
The key finding of the report is that climate change represents a significant obstacle to the sustained eradication of poverty, but future impacts on poverty are determined by policy choices: rapid, inclusive, and climate informed development can prevent most short-term impacts whereas immediate proper, emissions-reduction policies can drastically limit long-term ones: Climate-related shocks and stresses, already a major obstacle to poverty reduction, will worsen with climate change. Climate is involved in most of the shocks that keep or bring households into poverty-notably, natural disasters (such as floods that cause asset loss and disability); health shocks (such as malaria that results in health expenditures and lost labour income); and crop losses and food price shocks (due to drought or crop disease). Poor people are disproportionately affected-not only because they are often more exposed and invariably more vulnerable to climate-related shocks but also because they have fewer resources and receive less support from family, community, the financial system, and even social safety nets to prevent, cope, and adapt. Climate change will worsen these shocks and stresses, contributing to a decoupling of economic growth and poverty reduction, thereby making it even harder to eradicate poverty in a sustainable manner.
In the short run, rapid, inclusive, and climate-informed development can prevent most (but not all) consequences of climate change on poverty. Absent such good development, climate change could result in an additional 100 million people living in extreme poverty by 2030. Between now and 2030, climate policies can do little to alter the amount of global warming that will take place. The only option, therefore, is to reduce vulnerability through both targeted adaptation investments and improved socioeconomic conditions (higher incomes and lower poverty and inequality).