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Climate Change and Development Series Public Disclosure Authorized Public Disclosure Authorized SHOCK WAVES Managing the Impacts of Climate Change on Poverty Public Disclosure Authorized Stephane Hallegatte, Mook Bangalore, Laura Bonzanigo, Marianne Fay, Tamaro Kane, Ulf Narloch, Julie Rozenberg, David Treguer, and Adrien Vogt-Schilb Public Disclosure Authorized Shock Waves Managing the Impacts of Climate Change on Poverty Shock Waves Managing the Impacts of Climate Change on Poverty Stephane Hallegatte, Mook Bangalore, Laura Bonzanigo, Marianne Fay, Tamaro Kane, Ulf Narloch, Julie Rozenberg, David Treguer, and Adrien Vogt-Schilb © 2016 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 18 17 16 15 This work is a product of the staff of The World Bank with external contributions. 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All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@ worldbank.org. ISBN (paper): 978-1-4648-0673-5 ISBN (electronic): 978-1-4648-0674-2 DOI: 10.1596/978-1-4648-0673-5 Cover design: Bill Pragluski, Critical Stages. Library of Congress Cataloging-in-Publication Data has been requested. Contents Foreword ..................................................................... xi Acknowledgments ............................................................. xiii Abbreviations .................................................................xv Overview ..................................................................1 Introduction ................................................................1 Climate change is a threat to poverty eradication ...................................3 By 2030, rapid, inclusive, and climate-informed development can prevent most (but not all) climate change impacts on poverty ...................................12 Emissions-reduction policies are required to remove the long-term threat from climate change, and need not threaten progress on poverty reduction ..................23 In conclusion ..............................................................25 References ................................................................26 1 From Climate Change to Poverty and Back: A Framework. 31 Introduction ...............................................................31 Climate change is an obstacle for people to escape poverty ...........................34 Poverty reduction, socioeconomic trends, and non-climate policies affect climate risk .....40 The road map for our report ..................................................42 Notes ....................................................................44 References ................................................................44 2 Bad Seed: Climate Change, Agriculture, and Food Security ..........................49 Introduction ...............................................................49 Climate change and climate policies will impact food security ........................50 Poor people are vulnerable to climate impacts through prices and ecosystems. .56 Policies can avoid negative consumption effects and increase incomes ..................65 In conclusion ..............................................................71 Notes ....................................................................72 References ................................................................73 v vi CONTENTS 3 Threat Multiplier: Climate Change, Disasters, and Poor People .......................79 Introduction ...............................................................79 Climate change will worsen natural hazards in most regions of the world ...............80 Poor people are often—but not always—more exposed to hazards ....................83 Poor people lose relatively more to disasters when affected ...........................91 The reasons why poor people are more at risk point to possible policy solutions ..........97 In conclusion .............................................................105 Notes ...................................................................105 References ...............................................................105 4 Under the Weather: Climate Change, Health, and the Intergenerational Transmission of Poverty ................................................................111 Introduction ..............................................................111 Disease and poor health contribute to poverty ...................................112 Climate change magnifies threats to health, especially for poor people ................116 Health care systems and development pathways play a critical role ...................128 In conclusion .............................................................131 Notes ...................................................................132 References ...............................................................132 5 Lend a Hand: Poor People, Support Systems, Safety Nets, and Inclusion. 141 Introduction ..............................................................141 Saving, borrowing, and insurance help people adapt to changes and cope with shocks, but are not always accessible for poor people ....................................143 Social protection schemes are critical for helping people adapt and cope with shocks, but must be flexible and easily scalable .........................................146 Migration and remittances play an increasingly important role and need to be supported by policies .......................................................160 Voice and governance .......................................................162 In conclusion .............................................................164 Annex 5A. Case studies of social protection and risk management in Ethiopia, the Philippines, and Pakistan .................................................165 Notes ...................................................................172 References ...............................................................173 6 A Window of Opportunity: Climate-Informed Development and Pro-Poor Climate Policies ...........................................................179 Introduction ..............................................................179 By 2030, climate change will increase; but rapid, inclusive, and climate-informed development can minimize its impact on poverty .................................180 Pro-poor mitigation policies are needed to reduce the long-term threat of climate change ....191 In conclusion .............................................................202 Notes ...................................................................202