The Poverty and Welfare Impacts
of Climate Change Quantifying the Effects, Identifying the
Adaptation Strategies

The continued decline in global poverty
over the past 100 years particularly in the past three
decades is a remarkable achievement. In 1981, 52 percent of
the world population lived on less than $1.25 a day. By
2005, that rate had been cut in half, to 25.0 percent, and
by 2008 to 22.2 percent (World Bank 2012). Preliminary
estimates for 2010 indicate that the extreme poverty rate
has fallen further still; if follow-up studies confirm this,
the Millennium Development Goal (MDG) of halving world
poverty will have been reached five years early (World Bank
2010). In recent years, poverty reduction has continued in
most countries, even after the financial, food, and fuel
shocks of 2008-09. Although poverty remains widespread in
South Asia and Sub-Saharan Africa, progress has been
substantial: extreme poverty fell in South Asia from 54
percent in 1990 to 36 percent in 2008 (World Bank 2012). In
Sub-Saharan Africa, where population growth exceeded the
rate of poverty reduction, the number of extremely poor
people increased from 290 million in 1990 to 356 million in
2008, yet over 2005-08, the region's poverty rate
nonetheless 'fell 4.8 percentage points to less than 50
percent the largest drop in Sub-Saharan Africa since
international poverty rates have been computed,'
according to the latest edition of the World Development
Indicators (WDI) (World Bank 2012). Although progress has
been slower at the $2-a-day poverty line, the WDI noted that
an increase in the absolute number of people living on
$1.25-$2.00 a day reflects both the upward movement from
extreme poverty and 'the vulnerabilities still faced by
a great many people in the world.' climate change is
likely to reduce agricultural productivity, especially in
the tropical regions, and to directly affect poor
people's livelihood assets including health, access to
water and other natural resources, homes, and infrastructure
(World Bank 2010). Moreover, increasing climatic variability
manifesting as more frequent and erratic weather extremes,
or 'weather shocks' will likely make poor
households even more vulnerable, which could in turn
exacerbate the incidence, severity, and persistence of
poverty in developing countries. This volume not only
surveys the research terrain concerning the effects of
climate change on poverty but also looks closely at
vulnerable rural populations (in a developing country,
Indonesia, and in the newly industrialized Mexico) where
weather shocks have measurable short term if not immediate
effects on the farming livelihoods many depend on for both
income and subsistence. The low-income farmers of rice in
Indonesia and of corn and other staple crops in Mexico are
at the human forefront of climate change.