Stephane Hallegatte

Most disaster risk assessments use asset damages as their central metric, often neglecting distributional impacts and affected people’s coping and recovery capacity. To address this, the concepts of well-being losses and socio-economic resilience—the ability to experience asset damages without a decline in well-being—have been proposed. Here we provide a global picture of well-being losses and socio-economic resilience using microsimulations. Across 132 countries, 1 dollar in damages causes well-being losses equivalent to a 2-dollar uniform national consumption drop. The poorest populations incur only 9% of damages but 33% of well-being losses. A 10% higher gross domestic product per capita is associated with a 1 percentage point resilience increase. Low-income countries experience 72% greater well-being losses per dollar of damages and need 92% longer to recover than high-income countries. Socio-economic and financial interventions can complement asset-focused policies, and targeting low-income populations usually yields higher well-being returns. Our results offer a starting point for a discussion on more comprehensive risk metrics and risk management policies for sustainable development.

Natural hazards can profoundly disrupt economies, yet their impact on employment remains underexplored. This study quantifies job losses due to floods, earthquakes, wind, storm surges, tsunamis, and heat across 132 countries, using a full-time job equivalent losses (JEL) estimation approach. Results show that fast-onset natural shocks cause 9.4 million JEL annually on average, predominantly due to earthquakes and floods, with burdens concentrated in East Asia and the Pacific, and Sub-Saharan Africa. Additionally, extreme heat is associated with 79.7 million JEL annually across 114 countries, between 2015 and 2024, with the burdens concentrated in South Asia and Sub-Saharan Africa. Yet, country examples show that average annual JEL can be significantly lower than losses from specific extreme events, for instance with 1-in-100-year hazard events resulting in JEL that exceed average annual JEL by a factor of up to 14. Overall, low-income countries experience the highest job loss rate per capita. Within countries, the poorest population group bears a disproportionate share of JEL. These results highlight the urgent need for targeted adaptation and resilience measures that safeguard workers, jobs, and productivity to support economic development. JEL codes: Q50, Q54, J23, J63, I30, O15

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.

The Paris Agreement established that global warming should be limited to “well below” 2 C and encouraged efforts to limit warming to 1.5 C. Achieving this goal presents a challenge, especially given (a) adjustment costs, which penalize a swift transition away from fossil fuels owing to, for example, skilled labor scarcity, and (b) climate uncertainty that complicates the link between emissions reductions and global warming. This paper presents a modeling framework that explores optimal decarbonization investment strategies with adjustment costs and climate uncertainty. The findings show that climate uncertainty impacts investment in three ways: (a) the cost of policy increases, especially when adjustment costs are present; (b) abatement investment is front‐loaded relative to a scenario without uncertainty; and (c) the sectors with the largest changes in investment are those that are “hard‐to‐abate”, such as heavy industry and agriculture, each of which have high investment costs and annual emission rates. The longer learning about climate uncertainty is delayed, the more these impacts are amplified. Each of these effects can be traced back to the carbon price distribution inheriting a “heavy tail” when climate uncertainty is present. The paper highlights how climate uncertainty and adjustment costs combined lead to heightened urgency for near‐term investments in decarbonization.

Most disaster risk assessments use the damages to physical assets as their central metric, often neglecting distributional impacts and the coping and recovery capacity of affected people. To address this shortcoming, the concepts of well-being losses and socio-economic resilience—the ability to experience asset losses without a decline in well-being—have been proposed. Here, we use microsimulations to produce a global estimate of well-being losses from, and socio-economic resilience to, natural disasters, covering 132 countries. On average, each $1 in disaster-related asset losses results in well-being losses equivalent to a $2 uniform national drop in consumption, with significant variation within and across countries. The poorest income quintile within each country incurs only 9% of national asset losses but accounts for 33% of well-being losses. Compared to high-income countries, low-income countries experience 67% greater well-being losses per dollar of asset losses and require 56% more time to recover. Socio-economic resilience is uncorrelated with exposure or vulnerability to natural hazards. A 10 percent increase in GDP per capita is associated with a 0.9 percentage point gain in resilience, but this benefit arises indirectly—such as through higher rate of formal employment, better financial inclusion, and broader social protection coverage—rather than from higher income itself. We assess ten policy options and find that socio-economic and financial interventions (such as insurance and social protection) can effectively complement asset-focused measures (e.g., construction standards) and that interventions targeting low-income populations usually have higher returns in terms of avoided well-being losses per dollar invested.

Climate change is increasing the frequency and intensity of extreme weather events. When these events occur, they threaten lives and livelihoods. Here we estimate the global population at high risk from climate-related hazards by examining household level vulnerability and local exposure to four types of events: agricultural droughts in rural areas, floods, heatwaves, and cyclones. Under current climate conditions, 4.5 billion people are expected to experience these hazards at intensities exceeding critical thresholds within their lifetime. One third of this population is considered highly vulnerable, based on seven dimensions that influence potential welfare impacts: income, education, access to finance, social protection, drinking water, electricity, and access to services and markets. Overall, we estimate that 1 in 5 people globally are at high risk from these hazards meaning that they are likely to experience them and would struggle to recover from their impacts. While the proportion of the population at high risk has nearly halved since 2010 due to decreased vulnerability, the number of people exposed has increased, and progress has been uneven across regions. This study offers a new global population headcount indicator based on household survey and high-resolution spatial data that will be used to track climate risks across countries and over time.

The political and institutional feasibility of implementing climate policy appears as a key impediment to accelerating climate action. Drawing on a rich dataset of climate policies introduced globally over the last 50 years, this paper explores global patterns in climate policy adoption to understand how climate policy feasibility is shaped by countries’ existing policies and institutional capacity. By constructing a ‘Climate Policy Space’ network based on the co-occurrence of climate policies across countries, we show that climate policy adoption is path-dependent, and therefore predictable: countries are significantly more likely to introduce policies that require similar institutional capacity and policy know-how to policies they have previously introduced. Exploiting this finding, we construct empirically validated ‘Climate Policy Feasibility Frontiers’ which, for a given country, identify policies that are (1) likely to be easiest to introduce; (2) have the greatest advantages in terms of capacity building and therefore facilitate further climate action; and (3) have the largest emissions reduction potential. As a complement to traditional cost-benefit analysis, such feasibility frontiers can inform more realistic and strategic climate policy prioritization across countries.

In 2022 the World Bank Group launched a new core diagnostic tool: the Country Climate and Development Report (CCDR). Published for 42 economies so far, CCDRs use resilient and low-emission development scenarios to identify synergies and tradeoffs between development and climate objectives. There are several modeling challenges associated with the analysis of the macroeconomic consequences of these development pathways, including those related to the nonmarginal nature of the required transformation, the role of technologies, and the replacement of fossil fuel-based assets with greener ones. To address some of these challenges, several CCDRs have used a hybrid modeling approach that combines a set of sectoral analyses with macroeconomic models. Specifically, sectoral techno-economic models are employed to construct resilient and low-emission development trajectories in key sectors. The macroeconomic implications of these sectoral transitions are then assessed by linking the sectoral models with two macroeconomic frameworks: a multisector general equilibrium framework and an aggregate macrostructural model. This hybrid approach combines the advantages of multiple tools and captures the various dimensions of the transition, including the need to tackle multiple market failures, beyond the emissions externality; analyze price and nonprice policies and their interactions; represent explicitly the replacement of assets and infrastructure; assess the macroeconomic feasibility of the sectoral transitions and the required investments. This paper uses the case of Turkey to describe the methodological approach and summarizes the results of the CCDRs that have been published to date. Findings suggest that, despite large investment needs, the transition can contribute positively to economic growth, especially when indirect mitigation benefits are taken into account, but only if structural challenges can be managed, climate and development policies are well designed, and negative impacts on some sectors or communities are mitigated.

Based on global datasets, 4.5 billion people were exposed to extreme weather events (flood, drought, cyclone, or heatwave) in 2019, an increase from 4 billion in 2010. Among exposed people in 2019, 2.3 billion people lived with less than $6.85 per day and about 400 million lived in extreme poverty (on less than $2.15 per day). This paper presents a methodology to estimate the number of people who are at high risk from extreme weather events, defined as the people who are exposed to these events and highly vulnerable to them. Vulnerability is proxied by a set of indicators measuring (1) the physical propensity to experience severe losses (proxied by the lack of access to basic infrastructure services, here water and electricity) and (2) the inability to cope with and recover from losses (proxied by low income, not having education, not having access to financial services and not having access to social protection). Estimates from 75 countries for which data on all indicators are available suggest that, in 2019, 42 percent of the total population (and 70 percent of people exposed) are at high risk from extreme weather shocks, if one indicator is enough to be considered as highly vulnerable. If high vulnerability is defined based on being vulnerable on two dimensions or more, then 12 percent of the total population (and 20 percent of people exposed) are at high risk from extreme weather shocks. The trend between 2010 and 2019 can be explored in a subset of countries covering 60 percent of the world population. In these countries, even though the population exposed to extreme weather events has been increasing, the number of people at high risk has declined. The exception is Sub-Saharan Africa where the number of people at high risk has increased between 2010 and 2019.