The Economics of Climate-Resilient Development

The Economics of Climate-Resilient Development

Edited by Sam Fankhauser and Thomas K.J. McDermott

Some climate change is now inevitable and strategies to adapt to these changes are quickly developing. The question is particularly paramount for low-income countries, which are likely to be most affected. This timely and unique book takes an integrated look at the twin challenges of climate change and development. The book treats adaptation to climate change as an issue of climate-resilient development, rather than as a bespoke set of activities (flood defences, drought plans, and so on), combining climate and development challenges into a single strategy. It asks how the standard approaches to development need to change, and what socio-economic trends and urbanisation mean for the vulnerability of developing countries to climate risks. Combining conceptual thinking with practical policy prescriptions and experience the contributors argue that, to address these questions, climate risk has to be embedded fully into wider development strategies

Chapter 2: The role of climate in development

David Castells-Quintana, Maria del Pilar Lopez-Uribe and Thomas K.J. McDermott

Subjects: economics and finance, development economics, environmental economics, environment, climate change, environmental economics


David Castells-Quintana, Maria del Pilar Lopez- ribe and U Thomas K.J. McDermott 2.1 INTRODUCTION The links between climate change, economic development and poverty reduction have gained increasing attention over recent years in both the academic and policy literature. Climate change can affect the processes of poverty reduction and economic development directly, by modifying relevant environmental conditions, with impacts, for example, on agricultural and labour productivity, disease environments and via the effects of extreme weather events on capital formation. These mechanisms are now increasingly recognized in the literature, albeit the evidence base in some cases remains relatively thin, given the relative novelty of this area of study. Climate change might also affect development paths indirectly by altering the socio- olitical environment within which poverty reduction and p development take place. We discuss two specific channels through which climate change might affect development: institutions and conflict (and their interaction). Both institutions and conflict matter hugely for development outcomes. Each might be affected by climate change, for example, through its effects on poverty, inequality and the distribution of economic or political power, on the availability of resources and on the movement of people. The potential for indirect effects from climate change to development is less well established in the literature. While there is a growing literature on climate and conflict, it tends to be largely empirical and lacking specific mechanisms for identifying causal effects. Understanding both the direct as well as the indirect effects of climate change is not only fundamental for the...

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