Impacts of global warming on subnational poverty and inequality

Abstract

Higher temperatures are expected to impact globally on poverty and inequality, yet little cross-country analysis exists to quantify the effects. Here we analyse a panel dataset of subnational poverty in 130 countries covering the past decade and find that a 1 °C increase in temperature causes headcount poverty increases of 0.63–1.18 percentage points, using the daily poverty lines of US$2.15 (corresponding to 8.3% and 15.6% increases), and increases in the Gini inequality index of 1.3–1.9%. These poverty estimates equal a projected increase of global poor by 62.3–98.7 million people by 2030 compared with a scenario without climate change. Poorer countries—particularly those in Sub-Saharan Africa—are more vulnerable, as are countries with higher agriculture shares in the economy. Estimates at the subnational level are larger than those using the country-level data, indicating that aggregated analysis may underestimate climate change risks.