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FEATURE STORY

Breaking the Link Between Extreme Weather and Extreme Poverty


November 14, 2016

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Breaking the Link Between Extreme Weather and Extreme Poverty

STORY HIGHLIGHTS
Because natural disasters tighten povertys grip on communities worldwide, disaster risk reduction goes hand in hand with poverty reduction, and
vice versa

A new World Bank report nds the impact of extreme weather on poverty is more devastating than previously understood, responsible for annual
consumption losses of $520 billion and pushing 26 million people into poverty every year

Targeted resilience-building interventions protect poor people from adverse weather events and can help countries and communities save $100
billion a year
In 2013, an estimated one million Filipinos were plunged into poverty after Typhoon Haiyan sapped $12.9 billion from the national economy and
destroyed over a million homes.

No sooner had the 2010 Cyclone Aila devastated coastal areas of Bangladesh than unemployment and poverty levels surged 49 percent and 22 percent,
respectively.

Economic strains facing Guatemala after Hurricane Stan in 2005 forced 7.3 percent of a ected families to send children to work instead of school.

Whenever disaster strikes, it leaves more than just a trail of devastationit also leaves communities further in the grip of poverty.

And yet, when we hear of natural disasters today, their nancial costthat is, the damage in icted on buildings, infrastructure, and agricultural
productionis what catches the headlines. New research, however, suggests that reducing natural disasters to their monetary impact does not paint
the whole picture. In fact, it distorts it.

Thats because a simple price tag represents only the losses su ered by people wealthy enough to have something to lose in the rst place. It fails to
account for the crushing impact of disasters on the worlds poor, who su er much more in relative terms than wealthier people.

Through this lens, a new report released by the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR)
(https://openknowledge.worldbank.org/bitstream/handle/10986/25335/9781464810039.pdf), warns that natural disasters are a greater impediment to
ending global poverty than previously understood. Launched this week at COP22, the report, Unbreakable: Building the Resilience of the Poor in the Face of
Natural Disasters (https://openknowledge.worldbank.org/bitstream/handle/10986/25335/9781464810039.pdf) underscores the urgency for climate-smart
policies that better protect the worlds most vulnerable.

" Severe climate shocks threaten to roll back decades of progress against poverty. Storms, oods, and droughts have
dire human and economic consequences, with poor people often paying the heaviest price. Building resilience to
disasters not only makes economic sense, it is a moral imperative."

Jim Yong Kim


World Bank Group President
Compared to their wealthier counterparts, poor people are more likely to live in fragile housing in disaster-prone areas, and work insectors
dangerously susceptible to extreme weather events, like farming and agriculture. They also receive much less government and community support for
recovery. The result: the impact of a storm, ood, drought or earthquake is more than twice as signi cant for poor people than anyone else.

For example, when unprecedented oods a ected Mumbai in 2005, poor people lost 60 percent more than their richer neighborsand when poor
people lose the little they have, there are immediate and sometimes irreversible consequences for their health. In Ecuador, poor children exposed in
utero to El Nio ooding in 1997-1998 were found to have relatively lower birthweights, shorter statures, and impaired cognitive abilities.

Proposing a new measure for assessing disaster-related damagesone that factors in the unequal burden on the poorUnbreakable shows that
natural disasters currently cost the global economy $520 billion (60 percent more than is usually reported) and force some 26 million people into
poverty every year.

But there is hope. Governments can prevent millions of people from falling into extreme poverty by enacting measures that better protect the poor
from natural disasters.

The report proposes a resilience policy package that would help poor people cope with the consequences of adverse weather and other extreme
natural events. This includes early warning systems, improved access to personal banking, insurance policies, and social protection systems (like cash
transfers and public works programs) that could help people better respond to and recover from shocks. Unbreakable also calls on governments to
make critical investments in infrastructure, dikes, and other means of controlling water levels, and develop appropriate land-use policies and building
regulations. These e orts must be speci cally targeted to protect the poorest and most vulnerable citizens, not just those with higher-value assets.

The report assesses the expected bene ts from these policies in 117 countries. If Angola, for example, were to introduce scalable safety nets to cover its
poorest citizens, the government would see gains equaling $160 million a year. Globally, these measures combined would help countries and
communities save $100 billion a year and reduce the overall impact of disasters on well-being by 20 percent.

Countries are enduring a growing number of unexpected shocks as a result of climate change, said Stephane Hallegatte, a GFDRR lead economist
and lead author of the report. Poor people need social and nancial protection from disasters that cannot be avoided. With risk policies in place that
we know to be e ective, we have the opportunity to prevent millions of people from falling into poverty.

E orts to build poor peoples resilience are already gaining ground, the report shows. Only last month, thanks to an innovative insurance program,
Haiti, Barbados, Saint Lucia, and St. Vincent and the Grenadines received a payout of $29 million in support of recovery e orts after su ering the e ects
of Hurricane Matthew.

Unbreakable is a roadmap to help countries better adapt to climate change, and boost the resilience and prosperity of their most vulnerable citizens. By
equipping the most vulnerable with the means to cope, rebuild and rebound we can increase the chance for millions to stay out of extreme poverty.

Climate Change (/en/topic/climatechange)

RELATED

WORLD BANK
Download the Report and Policy Notes: Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters
(https://openknowledge.worldbank.org/handle/10986/25335)

Infographic: Breaking the Link Between Extreme Weather and Extreme Poverty (http://www.worldbank.org/en/news/infographic/2016/11/14/breaking-the-link-between-
extreme-weather-and-extreme-poverty)

Press Release: Natural Disasters Force 26 Million People into Poverty and Cost $520bn in Losses Every Year, New World Bank Analysis Finds
(http://www.worldbank.org/en/news/press-release/2016/11/14/natural-disasters-force-26-million-people-into-poverty-and-cost-520bn-in-losses-every-year-new-world-bank-

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