The Relationship between Climate Action and Poverty Reduction

There is growing awareness that actions by policymakers and international organizations to reduce poverty, and those to mitigate and adapt to climate change, are inextricably linked and interwoven. This paper examines relevant academic and policy literature and evidence on this relationship and explores the potential for a new form of development that simultaneously mitigates climate change, manages its impacts, and improves the wellbeing of people in poverty. First, as a key foundation, it outlines the backdrop in basic moral philosophy, noting that climate action and poverty reduction can be motivated both by a core principle based on the right to development and by the conventional consequentialism that is standard in economics. Second, it reviews assessments of the current and potential future impacts of weakly managed climate change on the wellbeing of those in poverty, paying attention to unequal effects, including by gender. Third, it examines arguments and literature on the economic impacts of climate action and policies and how those affect the wellbeing of people in poverty, highlighting the importance of market failures, technological change, systemic dynamics of transition, and distributional effects of mitigation and adaptation. Finally, the paper surveys the current state of knowledge and understanding of how climate action and poverty reduction can be integrated in policy design, indicating where further research can contribute to a transition that succeeds in both objectives.