This World Bank policy research working paper investigates household-level strategies for adapting to climate change in rural settings, looking particularly at the adaptive capacity of poor rural households – a subject the authors claim has received little attention due to its broad and complex nature. The paper argues that climate change poses two distinct sets of challenges for rural households, which it broadly defines as ‘shocks’ and ‘shifts’:
- shocks signify events that temporarily disrupt a household's modal environmental conditions, i.e. increased weather variability, and increased frequency and severity of extreme weather events;
- shifts permanently change the modal conditions, i.e. long-term shifts in temperature, rainfall patterns, water availability and other environmental factors.
Within this framework, the authors examine evidence from existing empirical literature on topics including: determinants of household economic mobility, ambiguity risk, agricultural technology adoption, reaction to weather-related information, determinants of migration, income diversification, health and past experiences of permanent environmental changes. They synthesise the evidence from this literature into a picture of household-level strategies for adapting to climate change in rural settings. The findings and conclusions include the following examples.
- Increased frequency and severity of weather shocks is likely to have the greatest impact among the poorest rural households.
- Weather-related declines in schooling in rural areas are often associated with increases in households’ use of child labour.
- Climate shocks and shifts complicate rural households’ attempts to: smooth consumption (using credit, insurance, savings, etc.), smooth income (adjusting agricultural portfolios, diversifying sources of income, etc.) and evaluate options (such as migration).
- Policies and programmes that help to increase households’ human capital and improve their access to physical assets, financial capital and markets can play important roles in strengthening their capacity to adapt to climate change.
The authors also provide examples of country experiences with better systems of information for adaptation and climate-adapted risk management instruments (such as indexed production insurance) and social safety nets that are targetable and scalable on the basis of weather events.