Resource information
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.
