Shock Waves: Managing the Impacts of Climate Change on Poverty

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November 2015
Stephane Hallegatte, Mook Bangalore, Laura Bonzanigo, Marianne Fay, Tamaro Kane, Ulf Narloch, Julie Rozenberg, David Treguer, Adrien Vogt-Schilb
World Bank Group

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 report explores the relation between climate change, climate 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 report explores various channels through which climate change and policies will affect poverty: economic impacts through incomes and prices; natural disasters and their effects on assets and livelihoods; and health impacts. It also investigates policy options to ensure adaptation and mitigation policies -- such as adaptive and well-targeted social protection, public investments, and financial inclusion policies -- contribute to poverty reduction and protect poor people against climate change impacts. The report highlights the benefits of eradicating poverty during the window of opportunity given to us before climate impacts are likely to substantially increase.