climate change and poverty research paper

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The relationship between climate action and poverty reduction

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There is growing awareness that actions by policymakers and international organizations to reduce poverty, and those to mitigate and adapt to climate change, are inextricably linked and interwoven. This paper examines relevant academic and policy literature and evidence on this relationship and explores the potential for a new form of development that simultaneously  mitigates  climate change, manages its  impacts , and improves the  wellbeing of people in poverty . First, as a key foundation, it outlines the backdrop in basic moral philosophy, noting that climate action and poverty reduction can be motivated both by a core principle based on the right to development and by the conventional consequentialism that is standard in economics. Second, it reviews assessments of the current and potential future impacts of weakly managed climate change on the wellbeing of those in poverty, paying attention to unequal effects, including by gender. Third, it examines arguments and literature on the economic impacts of climate action and policies and how those affect the wellbeing of people in poverty, highlighting the importance of market failures, technological change, systemic dynamics of transition, and distributional effects of mitigation and adaptation. Finally, the paper surveys the current state of knowledge and understanding of how climate action and poverty reduction can be integrated in policy design, indicating where further research can contribute to a transition that succeeds in both objectives.

Hans Peter Lankes, Rob Macquarie, Éléonore Soubeyran, Nicholas Stern, The Relationship between Climate Action and Poverty Reduction,  The World Bank Research Observer , Volume 39, Issue 1, February 2024, Pages 1–46,  https://doi.org/10.1093/wbro/lkad011

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• NEWS AND VIEWS
• 29 November 2023
• Correction 06 December 2023

Tackling extreme poverty around the world need not impede climate action

• Katharine L. Ricke 0 &
• Gordon C. McCord 1

Katharine L. Ricke is in the School of Global Policy and Strategy and at the Scripps Institution of Oceanography, University of California San Diego, La Jolla, California 92093, USA.

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Gordon C. McCord is in the School of Global Policy and Strategy, University of California San Diego, La Jolla, California 92093, USA.

Among the 17 goals set out in the United Nations’ 2030 Agenda for Sustainable Development (see sdgs.un.org/goals), eliminating poverty tops the list, and the 13th goal — combating global climate change — puts the 2030 agenda alongside the 2015 Paris climate agreement in terms of its impact on international climate policymaking 1 . But how does stamping out poverty affect the bid to stop climate change? Not as much as one might think, it turns out. Writing in Nature , Wollburg et al . 2 estimate that eliminating extreme poverty by 2050 would raise annual global greenhouse-gas emissions by less than 5%. And this number shrinks by a factor of ten with a climate-smart version of growth that includes improved technologies and reduced inequality.

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Nature 623 , 924-925 (2023)

doi: https://doi.org/10.1038/d41586-023-03627-w

Updates & Corrections

Correction 06 December 2023 : An earlier version of this article erroneously stated that high-income countries pledged to reach an annual donation of $10 billion to less-wealthy nations for climate finance by 2020. In fact, the pledge was for $100 billion.

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Climate change adaptation: A systematic review in five charts

Jonah rexer.

South Asia is highly vulnerable to climate change—including floods, extreme heat, and sea level rise. The burden of adapting to climate change falls disproportionately on poor households, which are typically more vulnerable to climate shocks. Globally, research on climate change identifies a variety of adaptation strategies by households, firms, and farmers, which have the capacity to offset nearly half of climate damage, on average. Firms have access to successful technology-driven adaptations, whereas households and farmers rely on less effective labor market adjustments. Adaptations that involve public support tend to be more effective than purely private strategies. Investing in broad public goods and social transfers that generate double dividends can help build resilience to climate change.

1.      South Asia is highly vulnerable to climate disasters

South Asia is the emerging market and developing economy (EMDE) region that is most vulnerable to climate change. This reflects South Asia’s geography, which leaves it exposed to changes in groundwater availability, floods, extreme heat, and rising sea levels. About 60 million people per year have been affected by natural disasters in South Asia since 2013, more than in any other region in the world. Climate change is projected to reduce agricultural yields, industrial output, labor supply, productivity, and human capital in South Asia. 

2.      Globally, the poor tend to be more exposed to, and affected by, climate disasters

In a systematic literature review, two-thirds of studies found that the poor are more exposed to climate shocks. Studies of droughts, heat, and floods in particular were likely to find the poor were more exposed to climate than average households. Furthermore, 80 percent of studies found that the poor were more adversely affected by climate shocks than other households. The poor typically suffer greater income and human capital losses from climate events and will disproportionately bear the burden of private adaptation to climate change.  

3.      Adaptation can work, but effectiveness varies substantially across domains

Households, firms, and farmers adapt to climate change in myriad ways. Factories may adopt cooling technologies to prevent productivity losses during heat waves; farmers may plant drought or flood resistant varieties to boost yields; households may migrate or seek employment in less climate-exposed regions or sectors. The degree to which these behaviors offset the damage from climate change is called the adaptation ratio . A recent systematic literature review finds that, on average, such adaptive behaviors offset 46 percent of the damage from climate change. However, adaptation ratios vary widely across settings: while firms recover 72 percent of climate losses, this number falls to 49 percent for households, and just 38 percent among agricultural producers. 

4.      As a middle-income region, adaptation in South Asia is likely to be effective

Adaptation ratios also depend on income levels. The lowest adaptation ratios are in low- and high-income countries, which offset only 32 and 34 percent of climate losses, respectively. In contrast, in middle-income countries adaptation mitigates over 50 percent of climate damage. In low-income countries, constraints to adaptation may be severe, and so observed adaptations tend to be less effective. In advanced economies, the most effective adaptations may already be widespread, reducing the impact of an additional adaptation. In middle-income countries, however, there may be both fewer constraints to adaptation than in low-income countries, and more low-hanging fruit than in high-income settings.

5.      The choice of adaptation strategies matters

Not all adaptation strategies are created equal. Labor market adjustments, the most common adaptation among households, are the least effective, offsetting just 14 percent of climate-related economic losses. Migration, off-farm work, and other labor market choices have low barriers to adoption and are commonplace among the world’s poor, but broadly ineffective in the face of rising climate risks. In contrast, state-provided public goods have the highest adaptation ratio of all studied adaptation strategies. These public goods are generally not climate-specific investments, but rather comprise the standard set of goods and services typically provided by the state—roads, bridges, health systems, irrigation canals, piped water. For example, connective infrastructure can reduce hunger during droughts by improving market integration, while a strong health system can reduce the impact of heat on infant mortality. These public goods not only serve their primary function, but also improve resilience to climate change, generating double dividends . Technological solutions, often favored by firms, are also highly effective. 

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38 trillion dollars in damages each year: World economy already committed to income reduction of 19 % due to climate change

 “Strong income reductions are projected for the majority of regions, including North America and Europe, with South Asia and Africa being most strongly affected. These are caused by the impact of climate change on various aspects that are relevant for economic growth such as agricultural yields, labour productivity or infrastructure,” says PIK scientist and first author of the study Maximilian Kotz. Overall, global annual damages are estimated to be at 38 trillion dollars, with a likely range of 19-59 trillion Dollars in 2050. These damages mainly result from rising temperatures but also from changes in rainfall and temperature variability. Accounting for other weather extremes such as storms or wildfires could further raise them.

Huge economic costs also for the United States and European Union

“Our analysis shows that climate change will cause massive economic damages within the next 25 years in almost all countries around the world, also in highly-developed ones such as Germany, France and the United States,” says PIK scientist Leonie Wenz who led the study. ”These near-term damages are a result of our past emissions. We will need more adaptation efforts if we want to avoid at least some of them. And we have to cut down our emissions drastically and immediately – if not, economic losses will become even bigger in the second half of the century, amounting to up to 60% on global average by 2100. This clearly shows that protecting our climate is much cheaper than not doing so, and that is without even considering non-economic impacts such as loss of life or biodiversity.”

To date, global projections of economic damages caused by climate change typically focus on national impacts from average annual temperatures over long-time horizons. By including the latest empirical findings from climate impacts on economic growth in more than 1,600 subnational regions worldwide over the past 40 years and by focusing on the next 26 years, the researchers were able to project sub-national damages from temperature and rainfall changes in great detail across time and space all the while reducing the large uncertainties associated with long-term projections. The scientists combined empirical models with state-of-the-art climate simulations (CMIP-6). Importantly, they also assessed how persistently climate impacts have affected the economy in the past and took this into account as well.

Countries least responsible will suffer most

 “Our study highlights the considerable inequity of climate impacts: We find damages almost everywhere, but countries in the tropics will suffer the most because they are already warmer. Further temperature increases will therefore be most harmful there. The countries least responsible for climate change, are predicted to suffer income loss that is 60% greater than the higher-income countries and 40% greater than higher-emission countries. They are also the ones with the least resources to adapt to its impacts. It is on us to decide: structural change towards a renewable energy system is needed for our security and will save us money. Staying on the path we are currently on, will lead to catastrophic consequences. The temperature of the planet can only be stabilized if we stop burning oil, gas and coal,” says Anders Levermann, Head of Research Department Complexity Science at the Potsdam Institute and co-author of the study.

Maximilian Kotz, Anders Levermann, Leonie Wenz (2024): The economic commitment of climate change. Nature. [DOI: 10.1038/s41586-024-07219-0]

Weblink to the article:

https://www.nature.com/articles/s41586-024-07219-0

PIK press office Phone: +49 331 288 25 07 E-Mail: [email protected] www.pik-potsdam.de

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Catalyzing climate change mitigation: investigating the influence of renewable energy investments across BRICS

• Published: 29 April 2024
• Volume 57 , article number  113 , ( 2024 )

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• Azer Dilanchiev   ORCID: orcid.org/0000-0002-9899-6621 1 ,
• Bobur Urinov 2 ,
• Sugra Humbatova 3 &
• Gunay Panahova 3  

The study examines the relationship between climate change, the interconnected elements of BRICS countries, and investments in research and development for renewable energy. The paper employing the augmented mean group estimator and Dumitrescu–Hurlin non-causality test for the economy of BRICS countries from 1990 to 2021 revealed robust evidence that increasing investments in renewable energy research and development (RandD) significantly reduces greenhouse gas emissions in BRICS nations. A 1% increase in per capita renewable energy RandD spending is associated with a 2.24% decrease in emissions. Likewise, a 1% rise in overall energy technology RandD budgets corresponds to a 3.15% emissions reduction. These findings highlight the considerable potential of innovation-focused policies to promote sustainability alongside continued economic growth. It suggests the need for more research to devise effective policies that use RandD to reduce emissions without compromising larger development objectives.

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Dilanchiev, A., Urinov, B., Humbatova, S. et al. Catalyzing climate change mitigation: investigating the influence of renewable energy investments across BRICS. Econ Change Restruct 57 , 113 (2024). https://doi.org/10.1007/s10644-024-09702-0

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DOI : https://doi.org/10.1007/s10644-024-09702-0

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