To Address Climate Change We Need to Measure Poverty Better

Increasing food and oil prices are making life miserable for millions of people. According to our World Bank estimates, the food price hike since last July has already pushed another 44 million people around the globe into extreme poverty –those living on less than US$1.25 a day. But beyond these latest shocks, the truth is that poverty reduction overall had continued in most countries, even after the financial, food, and fuel crises of 2008-2009.

In 1981, for instance, the percentage of the world population living below $1.25 a day was 52 percent. By 2005, that rate had more than halved to 25 percent. However, a growing concern is that climate change could slow or possibly even reverse progress in poverty reduction. Why? Because most developing countries are highly dependent on agriculture and natural resources. And also because poor countries lack sufficient financial and technical capacities to manage climate change.

For example, climate change may have a negative effect on agricultural productivity, particularly in tropical regions, and also affect poor people’s livelihood through its effects on health, access to water and natural resources, homes, and infrastructure.

So as long as we are unable to measure the poverty impact of climate change better, we run the risk of either overestimating or underestimating the resources that will be needed to face it.  So that’s why at the World Bank we are exploring new approaches to measure how current climate variability affects poverty, as my colleagues do in this week’s Economic Premise. According to The Poverty Impacts of Climate Change, different estimates project the poverty increase between 9 and 10 million people by 2055, as the result of climate change.

These numbers might not seem like much, considering the catastrophic scenarios that have been portrayed by some. But  climate change will indeed slow the pace of global poverty reduction. And much of the poverty expected to occur will be concentrated in Africa and South Asia. In addition, the “modest” numbers of the poverty increases mentioned above correspond to baseline scenarios –they could be much higher if more extreme climate change damage occurs. So in light of all of this, more efforts have to go into measuring the poverty impacts of climate change better. Otherwise, we will certainly pay the consequences.