Global Warming Would Worsen Poverty in India

Global warming is expected to heavily impact agriculture, on which the world's poor depend, but little is known about how it will pan out in individual countries. A new working paper by Hanan Jacoby, Mariano Rabassa and Emmanuel Skoufias aims to fill the gap.

Using a simple comparative statics framework, the authors analyze how households in India could be affected in the next 30 years by changes in land, labor and food prices brought on by modest temperature increases. The authors predict a substantial fall in agricultural productivity, even if farmers adapt their production methods. But that wouldn’t translate into a sharp drop in consumption for the majority of rural households, which largely rely on wage employment for income.

The poor, however, would bear a disproportionately large share of the welfare cost. That’s true among the urban poor, as well as in rural areas, when rising world cereal prices are considered. It appears that efforts to adapt to global warming would mainly benefit the non-poor, since they own the lion's share of agricultural land. Overall, by 2040, the authors estimate that rising temperatures would drive up India’s poverty rate by 3 to 4 percentage points, compared with a scenario without global warming.

Extracted from World Bank