World Bank released Shock Waves: Managing the Impacts of Climate Change on Poverty report

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Who: Shock Waves: Managing the Impacts of Climate Change on Poverty report
What: Released by the World Bank
When: December 2015
Why: To publicise the interplay between climae change & poverty

World Bank in December 2015 released a report entitledShock Waves: Managing the Impacts of Climate Change on Poverty. The report examines the two-way relation (interplay) between climate change and poverty and concludes that climate change is one of the primary contributing factors for growing poverty scenario across the world.

To remedy the situation, the report also provides guidance on how to create a win-win situation so that climate change policies contribute to poverty reduction and poverty-reduction policies contribute to climate change mitigation and resilience building.

Highlights of the report

• The key finding of the report is that climate change represents a significant obstacle to the sustained eradication of poverty, but future impacts on poverty are determined by policy choices.
• There are three major channels through which climate-sensitive events already affect the ability of poor people to escape poverty-agricultural production, ecosystems, and food security, natural disasters and health.

Agriculture: Climate change impacts on agriculture are already evident in vulnerable regions, such as Sub-Saharan Africa and South Asia, even as they remain globally limited.
• In the shorter term, food stocks, better access of poor farmers to markets, improved technologies and climate-smart production practices can reduce climate impacts.
Health: Climate change will magnify some threats to health, especially for poor and vulnerable people such as children and the elderly, but large uncertainties remain in what is still an emerging research field.
• By 2030, if both economic growth and climate change are present, anestimated 3.6 billion people could be at risk of malaria, including 100 million because of climate change.
• Health shocks and poor health contribute to poverty through loss of income, health expenses, and caring responsibilities, so that climate change impacts on health will represent an additional obstacle to poverty reduction and will increase inequality.
Overall impact: In a pessimistic development scenario, climate change could drag more than 100 million people into poverty by 2030. This number can be reduced to fewer than 20 million, if rapid, inclusive, and climate-informed development is combined with targeted adaptation actions.
Natural Disasters: They push people into poverty and prevent poor people from escaping poverty. An increase in natural hazards is already observed and will worsen in the next decades.
Remedial measures: Financial inclusion, insurance, social safety nets and remittances complement each other in protecting different populations against different types of shocks.
• In the short run, rapid, inclusive, and climate-informed development can prevent most (but not all) consequences of climate change on poverty.
• Rapid, inclusive, and climate informed development can prevent most short-term impacts whereas immediate pro-poor, emissions-reduction policies can drastically limit long-term ones.
• Climate change mitigation measures need not threaten short-term progress on poverty reduction provided policies are well designed and international support is available.

Report with respect to India

• To illustrate that many people exit or fall back into poverty every year, it pointed out that over a 25-year period, every year an average of 14 percent of households in 36 communities in Andhra Pradesh escaped poverty and 12 percent of non poor households became poor—resulting in a net 2 percent annual decrease in poverty.
• To illustrate the vulnerability of poor people to natural hazards,the report pointed out that poor in Mumbai settle in flood prone areas due to lower land prices.
• In India, the high-impact climate change scenario brings 2 millionpeople into poverty in the prosperity scenario (if the people are well off), compared to almost 50 million in the poverty scenario (if the people are poor).
Early warning systems—combined with observation systems and evacuation preparedness—can save many lives at a low cost. When Cyclone Phailin made landfall near Gopalpur (Odisha) in 2013, it killed fewer than 100 people. While still a significant loss, it is much smaller than the 10,000 deaths that a similar storm caused in 1999.
• In India, agriculture remains the main preserve of the unskilled and disadvantaged people. These households will be highly sensitive to any change in agricultural profits or wages.
Linkage between food prices and poverty: As per an estimate, if food prices are increased by 50 and 100 percent, it will cause increase in poverty levels to the tune of 10 and 25 percent respectively.
• If households have lower than predicted income, they will derive more income share from environmental resources indicating linkage between poverty and degradation of ecosystems.

• The low-lying Sunderbans are becoming a more difficult place to live for its mostly poor population, increasingly exposed to sea level rise, salinization of soil and water, cyclonic storms, and flooding.
• To contain the vulnerability of agricultural systems it suggested for using climate resistant high-yielding varieties. In a randomized control trial in Orissa, a recent study shows the benefits of using a new, flood-resistant variety of rice, which offers a 45 percent yield gain relative to the current most popular variety.
• Household surveys found that in some places funeral expensesrepresent a significant cause of poverty, sometimes comparable to health expenditures. As per a survey, around 85 percent of households in Gujarat conveyed that health and funeral expenses are a major reason for poverty.
• While in developed countries, psychological factors have a correlation to interpersonal conflicts, in less developed countries, like India, the trigger may be lower income from higher temperatures, which in turn can raise crime rates.
• Indian manufacturing worker efficiency at the plant level declines substantially on hotter days, with a magnitude of roughly minus 2.8 percent per °C.
• The estimated cost of ambient air pollution in terms of morbidity and mortality is around 1.9 trillion US dollars annually in China and India alone.