21 May Climate change an extra complication in fight against poverty

World Bank poverty and climate change experts are combining forces with researchers to develop policy and recommendations that aim to help in the fight against poverty-a fight that ultimately requires very urgent action on both climate change and poverty. In February this year World Bank Group Chief Economist for Climate Change Marianne Fay stated that climate change is a threat to poverty alleviation and that it was important to bring climate and poverty communities together in order to devise effective interventions for both issues. In these conversations, four issues are emerging as follows:

• Climate change is a significant complication to ending extreme poverty
• Climate change policies that benefit the poor in the longer term can also benefit them in the short term if appropriate social policies are also implemented
• Creating strong and flexible safety nets can catch the poor prior to them falling into poverty
• There is a window of opportunity to reduce poverty now.

It has been known for a number of years that the people living in poverty are most at risk from climate change as they have the least resources to adapt or recover from shocks and often live on the most vulnerable land as that is all they can afford (e.g. homes along creeks that flood). A 25 year survey of Andhra Pradesh households in India found that 12% of households became impoverished, and 44% of those cited weather related events as a cause.

Climate policies can increase the cost of energy but they can also generate or make funds available for targeted assistance. Carbon pricing can create a revenue stream that can be used to help the poor offset increased fuel or energy prices. The carbon tax revenue in British Columbia was used to create a low income climate action tax credit that assists the poor with energy costs. Around the world in 2013, $550 billion was spent on fossil fuel subsidies.

Phasing out these subsidies can lower emissions and facilitate targeted support for the poor, rather than continuing to benefit the wealthy who use more fuel. In addition to phasing out fossil fuel subsidies and increasing gas prices by 44%, Indonesia also introduced programs to mitigate higher energy prices through subsidised rice, free health care, cash for poor students and a 12 month conditional cash transfer for households with pregnant women or school aged children.

Effective social support can be scaled up at short notice when required. A study in East Africa showed that if support is delayed by four or six months post harvest, the cost of drought can be $500 and $1300 per household respectively due to the impact on children and having to sell livestock and other property very quickly.

Melting glaciers and extreme weather events are evidence that climate change is already upon us, and scientists are now warning that Earth will be locked into a temperature increase of 4°C by the end of this century unless action is taken. As impacts worsen, it is going to become harder to stop poverty. Work currently underway to end poverty by 2030 can help Governments to lead the fight on climate change and work to improve the lives and futures of the poorest in their respective countries.

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Climate change is an issue that doesn’t respect borders, nor does it respect financial demarcations. While we need to appreciate that the poor are most at risk, we also need to appreciate that with wealth (both in financial and knowledge/skills) comes responsibility-and in the case of climate change, great responsibility. There are not two earths-one for the poor and one for the rest; we are all in this together and all need to take actions as individuals, just like businesses and Governments are being challenged to act.