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Global economic losses from natural disasters continue to increase. Yet, investments in disaster risk management are not universal, as they are traditionally seen as in competition with other development and economic priorities. The multitude of benefits from disaster risk management investments are not traditionally accounted for in cost-benefit analyses. This paper contributes to this discussion by highlighting the multiple benefits from disaster risk management investments, focusing on the avoided losses when a disaster occurs, but also on the impacts on economic development even before a disaster strikes. The paper's main message is that disaster risk management investments can provide two dividends: reduced losses when a disaster strikes, and a shift of investment strategies and perhaps even an increase in investment value that would benefit the economy even before a disaster strikes. Providing evidence to policy makers and investors about the existence of both types of dividends can provide a narrative reconciling short-term and long-term objectives, thereby improving the acceptability and feasibility of disaster risk management investments.

Development --- Disaster Risk Management --- Economic Losses --- Resilience

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With 70 percent of its population living in coastal areas and low-lying deltas, Vietnam is exposed to many natural hazards, including river and coastal flooding. These hazards are expected to worsen due to climate change, and the impacts of any change in hazard magnitude may be particularly acute in this region. This paper examines the exposure of the population and poor people in particular to current and future flooding at the country level, using new high-resolution flood hazard maps and spatial socioeconomic data. The paper also examines flood exposure and poverty at the local level within Ho Chi Minh City. The national-level analysis finds that a third (33 percent) of today's population is already exposed to a flood, which occurs once every 25 years, assuming no protection. For the same return period flood under current socioeconomic conditions, climate change may increase the number exposed to 38 to 46 percent of the population. Climate change impacts can make frequent events as important as rare ones in terms of exposure: for instance, the estimates suggest a 25-year flood under future conditions can expose more people than a 200-year flood under current conditions. Although poor districts are not found to be more exposed to floods at the national level, the city-level analysis of Ho Chi Minh City provides evidence that slum areas are more exposed than other parts of the city. The results of this paper show the benefits of investing today in flood risk management, and can provide guidance as to where future investments may be targeted. Furthermore, while the main strategy in Vietnam today to manage flood risk is to reduce exposure, the increase in exposure estimated in this paper provides support that alternative strategies to reduce vulnerability (such as financing for floor-raising) or improve the ability-to-adapt of households (such as social safety nets) may warrant increased attention.

Exposure --- Floods --- Poverty --- Urban Development

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Recent economic research documents a range of adverse welfare consequences from extreme heat stress, including health, labor productivity, and direct consumption disutility impacts. Without rapid adaptation, climate change will increase the burden of heat stress experienced by much of the world's population in the coming decades. What will the distributional consequences of this added heat stress be, and how might this affect optimal climate policy? Using detailed survey data of household wealth in 690,745 households across 52 countries, this paper finds evidence suggesting that the welfare impacts of added heat stress caused by climate change may be regressive. Specifically, the analysis finds that poorer households tend to be located in hotter locations across and within countries, and poorer individuals are more likely to work in occupations with greater exposure to the elements not only across but also within countries. These findings-combined with the fact that current social cost of carbon estimates do not include climate damages arising from the productivity impacts of heat stress-suggest that optimal climate policy, especially when allowing for declining marginal utility of consumption, involves more stringent abatement than currently suggested, and that redistributive adaptation policies may be required to reduce the mechanical inequities in welfare impacts arising from climate change.

Climate change --- Climate change economics --- Climate change mitigation and green house gases --- Economic theory & research --- Environment --- Exposure --- Heat stress --- Labor productivity --- Macroeconomics and economic growth --- Poverty --- Science and technology development --- Science of climate change

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People living in poverty are particularly vulnerable to shocks, including those caused by natural disasters such as floods and droughts. Previous studies in local contexts have shown that poor people are also often overrepresented in hazard-prone areas. However, systematic evidence across countries demonstrating this finding is lacking. This paper analyzes at the country level whether poor people are disproportionally exposed to floods and droughts, and how this exposure may change in a future climate. To this end, household survey data with spatial identifiers from 52 countries are combined with present-day and future flood and drought hazard maps. The paper defines and calculates a "poverty exposure bias" and finds support that poor people are often overexposed to droughts and urban floods. For floods, no such signal is found for rural households, suggesting that different mechanisms-such as land scarcity-are more important drivers in urban areas. The poverty exposure bias does not change significantly under future climate scenarios, although the absolute number of people potentially exposed to floods or droughts can increase or decrease significantly, depending on the scenario and the region. The study finds some evidence of regional patterns: in particular, many countries in Africa exhibit a positive poverty exposure bias for floods and droughts. For these hot spots, implementing risk-sensitive land-use and development policies that protect poor people should be a priority.

Climate change --- Climate change mitigation and green house gases --- Droughts --- Environment --- Exposure --- Floods --- Global scale --- Hazard risk management --- Natural disasters --- Poverty --- Poverty reduction --- Rural poverty reduction --- Urban development --- Water resources --- Wetlands

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Climate change and climate policies will affect poverty reduction efforts through direct and immediate impacts on the poor and by affecting factors that condition poverty reduction, such as economic growth. This paper explores this relation between climate change and policies and poverty outcomes by examining three questions: the (static) impact on poor people's livelihood and well-being; the impact on the risk for non-poor individuals to fall into poverty; and the impact on the ability of poor people to escape poverty. The paper proposes four channels that determine household consumption and through which households may escape or fall into poverty (prices, assets, productivity, and opportunities). It then discusses whether and how these channels are affected by climate change and climate policies, focusing on the exposure, vulnerability, and ability to adapt of the poor (and those vulnerable to poverty). It reviews the existing literature and offers three major conclusions. First, climate change is likely to represent a major obstacle to a sustained eradication of poverty. Second, climate policies are compatible with poverty reduction provided that (i) poverty concerns are carefully taken into account in their design and (ii) they are accompanied by the appropriate set of social policies. Third, climate change does not modify how poverty policies should be designed, but it creates greater needs and more urgency. The scale issue is explained by the fact that climate will cause more frequent and more severe shocks; the urgency, by the need to exploit the window of opportunity given to us before climate impacts are likely to substantially increase.

Climate Change --- Climate Change Economics --- Climate Change Mitigation and Green House Gases --- Climate Policies --- Development --- Environment --- Macroeconomics and Economic Growth --- Poverty --- Poverty Reduction --- Rural Poverty Reduction --- Safety Nets & Transfers --- Social Protection --- Social Protections and Labor --- Welfare