The Poverty Impacts of Climate Change : A Review of the Evidence

Climate change is believed to represent
a serious challenge to poverty reduction efforts around the
globe. This paper conducts an up-to-date review of three
main strands of the literature analyzing the poverty impacts
of climate change : (i) economy-wide growth models
incorporating climate change impacts to work out consistent
scenarios for how climate change might affect the path of
poverty over the next decades; (ii) studies focusing on the
poverty impacts of climate change in the agricultural
sector; and (iii) studies exploring how past climate
variability impacts poverty. The analysis finds that the
majority of the estimates of the poverty impacts tend to
ignore the effect of aggregate economic growth on poverty
and household welfare. The empirical evidence available to
date suggests that climate change will slow the pace of
global poverty reduction, but the expected poverty impact
will be relatively modest and far from reversing the major
decline in poverty that is expected to occur over the next
40 years as a result of continued economic growth. The
studies focusing on the sector-specific channels of impacts
of climate change suggest that the estimated impacts of
climate change on agricultural yields are generally a poor
predictor of the poverty impacts of climate change at the
national level due to heterogeneity in the ability of
households to adapt. It also appears that the impacts of
climate change are generally regressive, that is, they fall
more heavily on the poor than the rich.