Climate Change & Poverty Nexus
Climate change is not just an environmental crisis—it's a poverty crisis. The poor suffer disproportionately from extreme weather despite contributing least to emissions.
Critical Insights on Climate and Poverty
Disproportionate Impact on the Poor
The impact of disasters is more than twice as significant for poor people compared to the wealthy. Natural disasters cause $520 billion in annual consumption losses and push 26 million people into poverty every year, with the poorest bearing the brunt.
Temperature Rise Deepens Poverty
Research shows that a 1°C temperature increase causes poverty rates to rise by 0.63–1.18 percentage points. Poorer countries, especially in Sub-Saharan Africa, and those with high agricultural dependence are most vulnerable to temperature shocks.
Overlapping Climate Hazards
Of 887 million poor people exposed to climate hazards, 651 million face two or more concurrent threats (floods + droughts + heat), and 309 million endure three to four overlapping hazards, making escape from poverty nearly impossible.
Projected Poverty Increase by 2030
Climate change could push an additional 32–132 million people into extreme poverty by 2030. By 2050, unchecked climate change might force more than 200 million people to migrate within their countries, pushing 130 million into poverty.
Climate Hazard Exposure Among the Poor
Number of concurrent climate hazards faced by multidimensionally poor people
Key Finding: 80% of the world's 1.1 billion multidimensionally poor people (887 million) are exposed to at least one climate hazard. Only 213 million poor people (19%) live in areas without significant climate threats.
Annual Economic Losses from Climate Disasters by Region
Estimated annual consumption losses in billions USD (2024)
Key Finding: East Asia and Pacific bear the highest absolute disaster losses ($182B annually), but when measured as % of GDP, Sub-Saharan Africa and South Asia suffer most severely, with losses representing a larger share of much smaller economies.
Climate Hazards Affecting the Poor
Percentage of MPI-poor exposed to each type of climate hazard
Key Finding: Extreme heat affects the highest number of poor people (62%), followed by drought (54%) and flooding (48%). Air pollution from wildfires and emissions affects 41% of the multidimensionally poor, compounding health vulnerabilities.
Projected Additional Poverty Due to Climate Change (2030)
Millions of additional people pushed into extreme poverty by 2030, by scenario
Key Finding: Under a pessimistic scenario with rapid warming and poor adaptation, climate change could push 132 million more people into extreme poverty by 2030. Even optimistic scenarios project 32 million additional poor, highlighting the urgent need for climate action.
Climate-Induced Internal Displacement
Millions of people displaced annually by climate-related disasters (2015-2024)
Key Finding: Climate disasters displace an average of 20-25 million people annually within their own countries. The trend is increasing, with 2020 seeing 30.7 million displaced due to extreme weather events intensified by climate change.
Most Vulnerable Countries to Climate-Poverty Spiral
Combined climate vulnerability and poverty exposure index (0-100 scale)
Key Finding: Somalia, Yemen, and South Sudan face the highest combined vulnerability from poverty and climate hazards. Many of these countries are also politically fragile, creating a triple crisis of poverty, climate, and conflict that traps populations in desperate conditions.
Understanding the Climate-Poverty Connection
Why Are the Poor More Vulnerable?
Poor people are disproportionately affected by climate change for several reasons:
- Geographic exposure: Poor communities often live in high-risk areas—floodplains, steep slopes, arid regions—where land is cheaper but climate hazards are more severe.
- Dependence on climate-sensitive livelihoods: 65% of the extreme poor work in agriculture, which is highly vulnerable to droughts, floods, and changing weather patterns.
- Limited adaptive capacity: Without savings, insurance, or access to credit, poor households cannot invest in resilience (e.g., drought-resistant seeds, elevated housing) or recover from shocks.
- Inadequate infrastructure: Lack of early warning systems, quality housing, healthcare, and social safety nets means disasters hit harder and recovery takes longer.
- Multiple deprivations: The poor often face simultaneous vulnerabilities in health, nutrition, and education, making them less able to cope with climate shocks.
Climate Hazards Measured
The 2025 Global MPI report assesses exposure to four main climate hazards:
- Extreme heat: Temperatures that threaten health, reduce labor productivity, and damage crops
- Flooding: River floods, coastal flooding, and flash floods that destroy homes and infrastructure
- Drought: Prolonged water scarcity affecting agriculture, drinking water, and livestock
- Air pollution: Particulate matter from wildfires, industrial emissions, and household cooking fuels
Economic Impact Methodology
Disaster economic losses are estimated using:
- Historical disaster databases (EM-DAT, DesInventar) tracking deaths, affected populations, and economic losses
- Household survey data on consumption impacts following disasters
- Catastrophe risk models projecting future losses under different climate scenarios
- Poverty impact assessments measuring how many people fall below poverty lines after disasters
Projected Poverty Scenarios
World Bank projections for 2030 and 2050 consider:
- Climate pathways: Temperature increases under different emissions scenarios (1.5°C to 3°C warming)
- Adaptation investments: Optimistic scenarios assume significant investment in climate resilience; pessimistic assume business-as-usual
- Transmission channels: Agricultural productivity, food prices, health shocks (malaria, heat stress), labor productivity, natural disasters
- Regional variation: Sub-Saharan Africa and South Asia face the highest projected increases in climate-induced poverty
Breaking the Climate-Poverty Trap
Solutions require integrated approaches:
- Climate-smart social protection (e.g., shock-responsive cash transfers)
- Early warning systems and disaster preparedness
- Climate-resilient infrastructure (flood defenses, drought-resistant water systems)
- Diversification away from climate-vulnerable livelihoods
- Universal health coverage and education to build adaptive capacity
- Climate finance targeted at the poorest and most vulnerable