Investing in people for climate adaptation and resilience

Throughout history, people have ingeniously adapted to their environments. Andean farmers sculpted mountainsides into terraces to reduce soil erosion, middle eastern civilizations channeled water through underground qanats, and tropical cultures synced work schedules with cooler hours to avoid the peak heat and maintain productivity. However, climate change is challenging these traditional methods.

As part of a blog series on human capital and climate change, this third blog explores how human capital can enhance common strategies people have adopted to cope with climate impacts. We look at adaptation practices such as climate-resilient agriculture, migration, and financial insurance, and discuss how greater human capital investments can make these practices more effective in overcoming climate shocks.

Investing in human capital for climate-resilient agriculture

Agriculture, the backbone of many developing economies, is particularly vulnerable to the effects of climate change. Farmers worldwide are adapting their practices to cope with fluctuating temperatures, erratic rainfall patterns, and the increasing frequency of extreme weather events.  

For instance, the rice farmers in Vietnam's Mekong Delta face rising sea levels that threaten saltwater intrusion into rice fields. In response, farmers are diversifying agricultural practices and integrating aquaculture into traditional farming. This adaptation not only protects their livelihoods but also supports food security in the region. Similarly,  smallholder farmers are adopting agroforestry techniques, integrating trees with crops. This approach enhances soil health, conserves water, and provides additional income from fruits and timber, creating a more resilient agricultural system.

To implement these and other adaptative strategies effectively, substantial investments in human capital are essential. Training programs play an important role by equipping farmers with the knowledge of emerging agricultural technologies and practices. For example, in Ethiopia, where climate variability is frequent, farmers participate in government trainings focused on conservation agriculture techniques, learning to improve soil health and maximize crop yields. This investment in capacity-building not only boosts productivity but also fosters a sense of community and shared knowledge, essential for long-term agriculture resilience in the face of climate change.

Investing in the human capital of climate migrants

Migration linked to climate change is on the rise at an alarming rate.  Without concrete climate and development action, an estimated 216 million people could be compelled to migrate within their countries by 2050.

Migration helps households diversify income sources and mitigate climate risks. For instance, in Vietnam, households often send family members to different locations to secure alternative income streams after typhoons. In southern India, marriages with partners from distant areas serve as a climate-adaptative strategy, helping households smooth consumption. Extreme weather events, such as droughts, drive labor migration, particularly among land-poor households in Ethiopia, and seasonal migration spikes during drought years in India. While migration can help families cope with climatic impacts, it often leads to challenges such as low-quality jobs and pressure on host communities.

To make migration a more effective adaptation strategy and reduce its negative impacts, significant investments in human capital are crucial. Colombia's formalization program for migrants offers job-matching services to Venezuelan migrants, aligning their skills with local labor market demands. This initiative helps migrants transition into formal employment, avoiding informal, low-quality work, improving livelihoods and speeding up economic integration. These job-matching programs are critical to preventing migrants from ending up in unsuitable jobs that do not match their skills.

Finally, investing in education for climate migrants is key to building long-term resilience. In Jordan, the work-based learning initiative provides language and vocational training to Syrian refugees, enhancing their job prospects and easing their integration into local communities. Similar programs help migrants build skills and increase their competitiveness in the job market.

Using financial instruments to safeguard human capital investments amidst climate shocks

Climate insurance provides vital financial protection and accelerates recovery from climate shocks by compensating households to maintain critical investments in education, health, and skills development.

Quick-disbursing financial tools, such as contingent credit and insurance held by governments, enable rapid crisis response, preventing larger disruptions in schooling, health care, and nutrition, significantly reducing the long-term impacts of disasters. In Ethiopia, for instance, every $1 secured ahead of time for early drought response can save up to $5 in future costs while safeguarding children's education and health during crises. Agricultural insurance in developing countries protects farmers from crop failures, ensuring financial stability and continued investment in education and the well-being of their families, thus sustaining and building human capital for future generations.

In Morocco, the World Bank's Integrated Disaster Risk Management and Resilience Program uses disaster-risk financing and insurance to offer financial protection to households affected by catastrophic events.  This program provides pre-arranged coverage to over 6 million people—18% of the population—ensuring that those who suffer permanent injury, death, or asset loss receive critical financial support. By mitigating the economic burden of disasters, the program helps households avoid falling into poverty and making difficult trade-offs, such as cutting food spending or pulling children out of school. This financial protection safeguards human capital development and strengthens resilience to future shocks.

Integrating human capital and adaptation investment for long-term resilience

Human capital is critical not only for immediate adaptation but also for long-term resilience. Our recent background paper, "Climate Changes Affect Human Capital," outlines how climate change directly and indirectly impacts health, nutrition, well-being, economic systems, and infrastructure. This highlights the importance of investing in human capital to strengthen adaptation and mitigation strategies.

Building on this evidence, the World Bank's policy note, "How to Protect, Build, And Use Human Capital to Address Climate Change," emphasizes that human capital investments are essential for minimizing the impacts of climate while building long-term resilience.  By integrating human capital development into climate adaptation strategies, we ensure that efforts to mitigate climate risks are both proactive and sustainable, securing well-being of current and future generations.

The Human Capital Project (HCP) supports these efforts by advancing global research and promoting policies that foster human capital accumulation alongside climate adaptation. Through technical and financial engagements, the HCP sets the agenda for effective climate resilience strategies globally, ensuring that human capital remains a key component of these efforts.

This is the third blog in a series that showcases recent World Bank research to explore how human capital is critical for climate resilience, adaptation, and action. Check out the first blog here and the second blog here.

We are especially grateful to Gabriel Demombynes, Dani Clark, Jing Guo, Christina Nelson, and Sarah Eleuterio Comer for their insightful feedback and valuable comments on this blog.

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