Extreme weather will be the greatest obstacle to an equitable world, as 3.53 billion people continue to live in poverty, according to a new report released by the World Bank
According to the report, climate shocks, which include extreme weather events, not only devastate livelihoods but also create a vicious cycle of poverty.
Nearly one in five people are at high risk from climate-related hazards globally and are likely to experience a severe climate shock in their lifetime that they will struggle to recover from, the Bank warned.
People in low-income countries will find it difficult to mitigate and adapt to such impacts generated by climate change and rebuild their lives if they lack the infrastructure and resources to resist these shocks.
The report alerted that without urgent intervention, it could take decades to lift millions out of poverty. Some 692 million people are living in extreme poverty in 2024, defined as subsisting on less than $2.15 per day as per estimates in the first post-pandemic assessment of global poverty by the World Bank, released recently.
However, if the World Bank measure of higher poverty standard of $6.85 per day is considered, 43.6 per cent of the global population or about 3.53 billion people continue to live in poverty in 2024, said the report.
The slow progress on poverty reduction in the past years reflects global conditions characterised by multiple and overlapping crises or a “polycrisis,” stated the report.
“The scarring effects of the pandemic, slow economic growth, increased conflict and fragility, and insufficient progress on shared prosperity, for instance, are connected and have been behind the slow progress in poverty reduction. The risk of a polycrisis is growing due to heightened uncertainly, fragility, climate change, and other vulnerabilities that tie together diverse sectors and regions,” read the report.
In 2024, South Asia is home to 1.48 billion poor people, followed by Sub-Saharan Africa (1.11 billion). This means South Asia and Sub-Saharan Africa together account for nearly 2.59 billion people or 73 per cent of the world’s poor.
By 2030, 7.3 per cent of the world’s population could still be living on less than $2.15 a day—more than double the global goal of three per cent set by the World Bank. The United Nations’ Sustainable Development Goal of eradicating extreme poverty by 2030 is similarly at risk of falling out of reach.
Nearly 40 per cent of the world’s population will likely live on less than $6.85 per day. This means that it would take more than a century to raise individuals above the $6.85 daily threshold.
The report also draws attention to widening inequality, particularly in Sub-Saharan Africa and Latin America. While global poverty rates have fallen, the gap between the rich and the poor is growing.
In Sub-Saharan Africa, inequality is most pronounced in Southern and Central Africa. Many countries in Latin America and the Caribbean have similarly high levels of inequality, with over 80 per cent of economies in the region displaying Gini index scores above 40, reflecting significant income disparities.
In view of these trends, the World Bank has warned that without a focus on more inclusive economic growth, poverty will persist. To raise the incomes of the world’s poor to a more equitable standard of $25 per person per day, income levels in many nations would need to increase fivefold—an aspiration that remains distant for much of the world.
In low-income or the poorest countries, poverty remains higher than it was before the COVID-19 pandemic, according to the report. Thus, the pandemic has shown how shocks can continue to impact overall human welfare.
When extreme weather events rank as the most severe global risks over the next 10 years, such shocks are expected to increase with more frequent and severe extreme weather events, warned the report.
According to the Intergovernmental Panel on Climate Change (IPCC), climate change will likely lead to an increasing occurrence and severity of extreme weather events.
South Asia, where around 1.48 billion people are poor, is vulnerable to such climate shocks, with 88.1 per cent of its population exposed to risks such as floods, heatwaves, and cyclones.
However, Sub-Saharan Africa, despite having a smaller proportion of people exposed to extreme weather compared to Asia, has the highest number of people at severe risk.
This disparity underscores the critical need for targeted climate adaptation strategies in the region, the report suggested. To tackle extreme poverty in the face of climate change, the World Bank emphasised the need for a comprehensive approach. Countries must focus on faster, more inclusive economic growth that enables the poor to benefit from development.
This will require significant investments in human capital, such as education and healthcare, alongside improvements in basic infrastructure and access to markets.
Inclusive growth will also be greatly aided by progressive fiscal policies that increase domestic revenue while lowering inequality. Communities need investments in social protection systems, such as improved healthcare, education, and employment opportunities, to be able to survive the combined effects of poverty and climate change.
The World Bank report has especially called for increased focus on managing the risks posed by extreme weather. Building resilience to climate impacts, particularly in regions like Sub-Saharan Africa, is essential. This includes strengthening insurance mechanisms that protect vulnerable populations from falling deeper into poverty during climate disasters. Without these safety nets, the poorest will continue to bear the brunt of climate-related shocks, it said.