Climate and Equity

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Reducing the impact of climate change on poor and vulnerable households is essential for hastening poverty reduction. Climate change disproportionately affects these groups, whose livelihoods depend on natural resources and lack access to savings, credit, and insurance [11][16]. - The document presents a framework for understanding the relationship between climate and poverty, emphasizing how climate change and climate policies affect household welfare [16][22]. - Policies that reduce hazards and vulnerability while providing non-climate benefits should be prioritized, with examples including climate-smart agricultural practices and investments in clean energy access [18][19]. Summary by Sections Background - The World Bank aims to end poverty on a livable planet, highlighting the interconnection between poverty and climate objectives. Progress on poverty reduction has stalled, and climate change poses significant threats to the livelihoods of poor and vulnerable populations [21][22]. The Welfare Impacts of Climate - The report utilizes an asset-based framework to analyze how climate outcomes affect household income and consumption. Poor households are particularly vulnerable due to their reliance on natural resources and limited access to financial instruments [25][27]. - The hazard, exposure, and vulnerability framework is employed to understand how climate change impacts welfare through various channels [32][33]. Measuring the Welfare Impacts of Climate Change - The report discusses the importance of damage or vulnerability functions in assessing the welfare impacts of climate change. These functions relate losses in welfare to climate conditions and are essential for understanding the broader implications of climate change on poverty [54][56].