16.3 Socioeconomic consequences of climate change

Climate change hits vulnerable populations hardest. Low-income communities, indigenous peoples, women, children, and developing countries face greater challenges adapting to and recovering from climate impacts due to limited resources and social disparities.

Climate-induced displacement strains infrastructure and creates social tensions in receiving areas. Economic costs include damage to infrastructure, crop losses, and healthcare expenses. Long-term consequences slow growth and worsen inequality, disproportionately affecting marginalized communities.

Disproportionate Impacts and Vulnerabilities

Climate impacts on vulnerable populations

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• Vulnerable populations more susceptible to negative effects of climate change
  • Low-income communities lack resources to adapt and recover from climate-related disasters (slums, favelas)
  • Indigenous peoples rely on traditional livelihoods threatened by changing climate (subsistence farming, hunting)
  • Women and children face higher risks during climate-related emergencies due to social and economic disparities (limited access to education, healthcare)
  • Elderly and disabled individuals have limited mobility and require special assistance during climate-related evacuations (nursing homes, assisted living facilities)
• Developing countries face greater challenges adapting to climate change
  • Limited financial resources hinder implementation of adaptation and mitigation measures (infrastructure upgrades, early warning systems)
  • Dependence on climate-sensitive sectors leaves economies vulnerable to climate variability (agriculture, fisheries, tourism)
  • Lack of infrastructure and technology hampers ability to cope with climate impacts (inadequate drainage systems, outdated building codes)

Climate-induced displacement and migration

• Climate change drives migration and displacement
  1. Sea-level rise and coastal erosion force communities to relocate (small island states, low-lying coastal areas)
  2. Increased frequency and intensity of extreme weather events destroy homes and livelihoods (hurricanes, floods, wildfires)
  3. Gradual changes in temperature and precipitation patterns affect viability of traditional livelihoods (drought, desertification)
• Social challenges of climate-induced migration
  • Strain on urban infrastructure and services in receiving areas as population increases (housing shortages, overcrowded schools)
  • Cultural and social integration of displaced populations into new communities (language barriers, discrimination)
  • Potential for social tensions and conflicts over limited resources (water scarcity, land disputes)
• Economic challenges of climate-induced migration
  • Pressure on labor markets and competition for resources in receiving areas (job scarcity, wage suppression)
  • Costs of providing housing, education, and healthcare for displaced individuals strain public budgets (temporary shelters, emergency services)
  • Loss of human capital and skills in origin communities as working-age population migrates (brain drain, labor shortages)

Economic costs of climate change

• Direct costs of climate-related disasters
  • Damage to infrastructure disrupts transportation and commerce (roads, bridges, ports)
  • Destruction of crops and livestock leads to food insecurity and economic losses (droughts, floods, pests)
  • Disruption of supply chains and economic activities affects businesses and livelihoods (power outages, transportation delays)
• Indirect costs of climate change
  • Increased healthcare expenses due to climate-related illnesses (heat stress, respiratory diseases, vector-borne infections)
  • Reduced productivity and economic output as workers face health impacts and displacement (absenteeism, reduced efficiency)
  • Diversion of resources from development to disaster response and recovery strains public budgets (emergency aid, reconstruction efforts)
• Long-term economic consequences
  • Slowed economic growth and development as climate impacts accumulate over time (reduced investment, damaged infrastructure)
  • Increased poverty and inequality as vulnerable populations bear disproportionate burden of climate costs (loss of assets, livelihoods)
  • Strain on public budgets and social safety nets as demand for assistance increases (unemployment benefits, food aid)

Climate change and socioeconomic inequalities

• Climate change amplifies pre-existing social, economic, and political disparities
  • Unequal access to resources and decision-making power leaves marginalized communities more vulnerable (land rights, political representation)
  • Marginalized communities have limited capacity to adapt due to lack of financial resources and technical expertise (indigenous peoples, rural poor)
• New vulnerabilities emerge as a result of climate change
  • Loss of livelihoods due to climate-related disasters pushes households into poverty (smallholder farmers, fishermen)
  • Increased exposure to health risks disproportionately affects low-income and marginalized populations (heat waves, air pollution)

Resilience and sustainable development opportunities

• Investing in climate adaptation and mitigation measures
  • Strengthening infrastructure to withstand climate impacts protects lives and livelihoods (flood barriers, drought-resistant crops)
  • Developing early warning systems and disaster preparedness plans saves lives and reduces economic losses (evacuation protocols, emergency stockpiles)
  • Promoting sustainable land use and natural resource management preserves ecosystems and enhances resilience (reforestation, soil conservation)
• Fostering inclusive and equitable development
  • Empowering vulnerable communities in decision-making processes ensures their needs and priorities are addressed (participatory planning, community-based adaptation)
  • Ensuring access to education, healthcare, and social services builds human capital and reduces vulnerability (scholarships, mobile clinics)
  • Supporting diversification of livelihoods and economic activities reduces dependence on climate-sensitive sectors (ecotourism, value-added processing)
• Promoting international cooperation and support
  • Technology transfer and capacity building for developing countries accelerates adaptation and mitigation efforts (renewable energy technologies, climate-smart agriculture)
  • Climate finance mechanisms provide resources for adaptation and mitigation projects in vulnerable communities (Green Climate Fund, Adaptation Fund)
  • Collaborative research and knowledge sharing on best practices facilitates learning and innovation across countries and regions (scientific networks, policy dialogues)