Climate Change and Poverty: An Emerging Structural Challenge

Poverty in India has traditionally been viewed as a purely economic issue, primarily linked to low income and lack of resources. However, in recent years, its nature has become more complex. A study conducted by the National Institute of Science Education and Research (NISER) across 593 districts in 21 states highlights that poverty in India is increasingly being influenced by climate variability. This finding indicates that poverty is no longer just an economic concern but a multidimensional structural challenge shaped by environmental and social factors.

Key Findings of the Study

¨     Changing Nature of Poverty:India has witnessed a decline in poverty, with the headcount ratio falling from 24.85% to 14.96% and poverty intensity reducing from 47.14% to 44.39%.However, climate-related shocks are emerging as a major constraint, threatening to reverse these gains.Globally, nearly 700 million people continue to live in extreme poverty, with climate change increasing vulnerability.

¨     Climate Stress and Poverty Linkages:The study shows that climatic factors significantly influence poverty outcomes. Temperature variability emerges as the most critical factor, with a one-unit increase raising the probability of poverty by 31.1%.Similarly, a one-unit increase in flood-affected areas increases poverty likelihood by 1.4%, while variations in precipitation raise it by 1.9%.These changes disrupt agricultural productivity, damage assets, and create income instability, particularly in rural regions.

¨    The drought-dependence trap:A key insight is the compounded vulnerability in districts that are both drought-prone and dependent on agriculture. Such districts are 83% more likely to experience high poverty levels.

¨   Social and Regional Dimensions:Social factors further intensify vulnerability. Districts with higher Scheduled Tribe populations show a greater likelihood of poverty, with a one-unit increase raising poverty probability by 1.9%.These communities often reside in ecologically sensitive areas and face limited access to infrastructure and institutional support.Regionally, a clear divide exists. Eastern states such as Chhattisgarh, Odisha, Jharkhand, Bihar, and West Bengal exhibit higher poverty levels due to greater dependence on agriculture and weaker economic diversification.In contrast, southern and western states like Kerala, Karnataka, Tamil Nadu, Gujarat, and Maharashtra show lower poverty levels, supported by stronger infrastructure and diversified economies.

¨   Role of Economic Diversification:The structure of the economy plays a crucial role in resilience. Districts with a higher share of the tertiary sector tend to experience lower poverty, with a one-unit increase reducing poverty probability by 1.9%.Service-oriented sectors provide more stable incomes and are less directly affected by climatic fluctuations, enhancing adaptive capacity.

Policy Challenges

¨    Despite national initiatives on climate action and poverty reduction, significant gaps remain at the sub-national level.

¨     Policies often fail to account for local vulnerabilities, institutional capacity differences, and structural inequalities, limiting their effectiveness.