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Poor people are disproportionally affected by natural hazards and disasters. This paper provides a review of the multiple factors that explain why this is the case. It explores the role of exposure (often, but not always, poor people are more likely to be affected by hazards), vulnerability (when they are affected, poor people tend to lose a larger fraction of their wealth), and socio-economic resilience (poor people have a lower ability to cope with and recover from disaster impacts). Finally, the paper highlights the vicious circle between poverty and disaster losses: poverty is a major driver of people’s vulnerability to natural disasters, which in turn increase poverty in a measurable and significant way. The main policy implication is that poverty reduction can be considered as disaster risk management, and disaster risk management can be considered as poverty reduction.

Thousands of scenarios are used to provide updated estimates for the impacts of climate change on extreme poverty in 2030. The range of the number of people falling into poverty due to climate change is between 32 million and 132 million in most scenarios. These results are commensurate with available estimates for the global poverty increase due to COVID-19. Socioeconomic drivers play a major role: optimistic baseline scenarios (rapid and inclusive growth with universal access to basic services in 2030) halve poverty impacts compared with the pessimistic baselines. Health impacts (malaria, diarrhea, and stunting) and the effect of food prices are responsible for most of the impact. The effect of food prices is the most important factor in Sub-Saharan Africa, while health effects, natural disasters, and food prices are all important in South Asia. These results suggest that accelerated action to boost resilience is urgent, and the COVID-19 recovery packages offer opportunities to do so.

The economic impact of climate change has typically been considered at regional or national levels. This Perspective assesses impacts at household level to determine effects on poverty and the poor. It shows how rapid development could reduce these impacts. Analysis of the economic impact of climate change typically considers regional or national economies and assesses its impact on macroeconomic aggregates such as gross domestic product. These studies therefore do not investigate the distributional impacts of climate change within countries or the impacts on poverty. This Perspective aims to close this gap and provide an assessment of climate change impacts at the household level to investigate the consequences of climate change for poverty and for poor people. It does so by combining assessments of the physical impacts of climate change in various sectors with household surveys. In particular, it highlights how rapid and inclusive development can reduce the future impact of climate change on poverty.

The impacts of climate change on poverty depend on the magnitude of climate change, but also on socio-economic trends. An analysis of hundreds of baseline scenarios for future economic development shows that the drivers of poverty eradication differ across countries. In this chapter, two representative scenarios are selected from these hundreds, one optimistic and one pessimistic regarding 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. But the magnitude of these impacts depends on development choices. In the optimistic 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 in the pessimistic scenario.

In 2016, 23% of children (155 million) aged [Formula: see text] were stunted. Global-level modeling has consistently found climate change impacts on food production are likely to impair progress on reducing undernutrition.We adopt a new perspective, assessing how climate change may affect child stunting via its impacts on two interacting socioeconomic drivers: incomes of the poorest 20% of populations (due to climate impacts on crop production, health, labor productivity, and disasters) and food prices.We developed a statistical model to project moderate and severe stunting in children aged [Formula: see text] at the national level in 2030 under low and high climate change scenarios combined with poverty and prosperity scenarios in 44 countries.We estimated that in the absence of climate change, 110 million children aged [Formula: see text] would be stunted in 2030 under the poverty scenario in comparison with 83 million under the prosperity scenario. Estimates of climate change-attributable stunting ranged from 570,000 under the prosperity/low climate change scenario to [Formula: see text] under the poverty/high climate change scenario. The projected impact of climate change on stunting was greater in rural vs. urban areas under both socioeconomic scenarios. In countries with lower incomes and relatively high food prices, we projected that rising prices would tend to increase stunting, whereas in countries with higher incomes and relatively low food prices, rising prices would tend to decrease stunting. These findings suggest that food prices that provide decent incomes to farmers alongside high employment with living wages will reduce undernutrition and vulnerability to climate change.Shifting the focus from food production to interactions between incomes and food price provides new insights. Futures that protect health should consider not just availability, accessibility, and quality of food, but also the incomes generated by those producing the food. https://doi.org/10.1289/EHP2916.

Natural disasters have an impact on poverty through many different channels -- economic growth, health, schooling, behaviors -- that are difficult to quantify. It is nonetheless possible to assess the short-term impacts of income losses. A counterfactual scenario is built of what people's income would be in developing countries in the absence of natural disasters. This scenario uses surveys of 1.4 million households in 89 countries. Depending on where they live and work, what they consume, and the nature of their vulnerability, the additional income that each household in the survey could earn every year on average in the absence of natural disasters is calculated. The analysis concludes that if all disasters could be prevented next year, 26 million fewer people would be in extreme poverty—that is, living on less than $1.90 a day. A systematic analysis of the uncertainty suggests that this impact could lie between 7 million if all the most optimistic assumptions are combined, and 77 million if we retain only the most pessimistic assumptions.

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 Vietnam shows that the main determinant of the eradication of extreme poverty by 2030 is the income of unskilled agriculture workers, followed by redistribution policies. Results from sector analyses of climate change impacts—in agriculture, health, and natural disasters—are introduced in each of the hundreds scenarios. By 2030 climate change is found to have a significant impact on poverty in Vietnam in about a quarter of the scenarios, with 400,000 to more than a million people living in extreme poverty just because of climate change impacts. Those scenarios in which climate change pushes the most people into poverty are scenarios with slow structural change away from agriculture, low productivity growth in agriculture, high population growth, and low redistribution levels. Conversely, in scenarios with rapid, inclusive, and climate-informed development, climate change has no impact on extreme poverty, although it still has an impact on the income of the bottom 40 percent.

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).

Ending poverty and stabilizing climate change will be two unprecedented global achievements and two major steps toward sustainable development. But the two objectives cannot be considered in isolation: they need to be jointly tackled through an integrated strategy. This report brings together those two objectives 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 pro-poor, emissions-reduction policies can drastically limit long-term ones.

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.