HOW TO PROTECT, BUILD,
AND USE HUMAN CAPITAL TO
ADDRESS CLIMATE CHANGE
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Design: Israel David Melendez
04
HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
Foreword
MAMTA MURTHI
Human Development
Vice President
“We talk about the numbers, the temperature, and how much money we need, but all of those
consequences have a human narrative.” - Her Excellency Oulimata Sarr, Minister of Economy, Planning
and Cooperation in Senegal
Human capital—the knowledge, skills, and good health that people accumulate over their lifetimes—
empowers people to deal with climate change. Healthier, better educated people are spurring
innovative climate solutions and powering the green industries of tomorrow. Human capital also
makes people more resilient to a warming world.
Simultaneously, climate change is eroding our human capital. It has broad and long-lasting impacts on
schooling, health and people’s ability to earn an income, particularly for the world’s most vulnerable
people. Consider these words from Esther Duflo, 2019 Nobel Laureate in Economics and Poverty
Alleviation and Development Professor at the Massachusetts Institute of Technology: “Climate change
will potentially undermine the progress that has been made in human capital, in low-and middle-income
countries, mainly by the eorts of the countries themselves. We need ingenuity to find solutions.”
During the 2023 World Bank Group-IMF Spring Meetings, Ministers of Finance, Planning, and Budget
gathered at the Human Capital Ministerial Conclave to discuss the link between human capital and
climate change. I would like to thank the Ministers for the conversation at the Conclave and for their
commitment to investing in people to address climate change. This note extends that conversation
on how to protect, build, and use human capital to face the challenges of a warming world.
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Executive Summary
Solutions to climate change require investments in people. Climate change is a direct threat to human
capital—the knowledge, skills, and good health that people accumulate over their lifetimes. It stifles learning,
undermines livelihoods, and intensifies diseases and malnutrition. At the same time, human capital empowers
people to advocate for climate action, to work in jobs created by the green transition, and to pioneer the
technology for a net-zero-emissions future. This note catalogs the impacts of climate change on people and
explains how to protect, build, and use human capital to ensure a livable planet.
Climate change is reversing human development. As an example, heat-related deaths across the globe have
increased 68 percent in the last two decades.
2
If greenhouse gas emissions continue unchecked, by 2100 the
death toll from extreme heat will exceed today’s global mortality rate from all infectious diseases combined.
3
Investing in human capital will limit the impact of climate change on people and help people to combat
climate change itself. Key strategies include the following:
• Protect people from climate change with social safety nets. In the aftermath of floods, fires, and severe
storms, programs like cash transfers help people get back to work, avoid falling into poverty, and keep
their children well-nourished and in school.
4
• Protect health care and education from climate change while reducing their carbon footprint. Governments
need to ensure continued access to health care and schooling after natural disasters. Energy-ecient
designs for schools and hospitals directly reduce greenhouse gas emissions and provide a model to private
companies for climate-friendly infrastructure.
• Build education for climate action. Education empowers people to work for a brighter climate future.
An additional year of education increases pro-climate beliefs, behaviors, and policy preferences.
5
And
environmental education for children both shapes the conduct of the next generation and influences the
views of their parents.
6
• Build skills for the climate transition. A global economy based on renewable energy requires people
with the expertise to develop and implement low-carbon technology. Demand for those “green skills” is
growing nearly twice as quickly as the number of people who have them.
7
• Use human capital to empower people for the green economy. Jobs programs are helping workers
displaced by the shift away from fossil fuels to reskill and find new opportunities.
8
The International Finance
Corporation (IFC) estimates that climate business can generate 213 million jobs around the world by 2030.
9
By protecting, building, and using human capital, we can make people agents for climate action. Through
the strategies outlined in this note, human capital investments can drive climate adaptation and mitigation,
while promoting a just transition.
2
Romanello et al. (2022).
3
Carleton et al. (2022).
4
Adhvaryu et al. (2018); Asfaw et al. (2017); De Janvry et al. (2006a, 2006b).
5
Angrist et al. (2023).
6
Lee, Markowitz, Howe, Ko, and Leiserowitz (2015).
7
LinkedIn (2023).
8
Andrews et al. (2021).
9
IFC (2021).
1
This policy note was prepared by the World Bank’s Human Capital Project. It was authored by German Caruso, Inés de Marcos, Daisy Demirag,
Sarah Eleuterio Comer, and Emily Weedon Chapman. The authors thank Diego Ambasz, Stephen Dorey, Jessica Flannery, Maria Gracheva,
Alexander Jaeger, Sergio Marin, Tamer Rabie, Elizabeth Ruppert, Shwetlena Sabarwal, Valeria Salvador, and Andrea Woodhouse for their
insightful technical inputs and greatly appreciate the guidance and advice from Wendy Cunningham, Gabriel Demombynes, Stephane Hallegatte,
Jamele Rigolini, Alberto Rodriguez, Iath Sharif, and Penny Williams. Mamta Murthi provided leadership and direction in setting the policy and
priorities outlined herein.
SECTION 1:
The Intergenerational Impacts of Climate
Change
People are threatened by climate change. Human capital is the health, knowledge, and skills that people
accumulate over their lifetime. At an individual level, people with more human capital are healthier, live longer,
and earn more. At a national level, human capital promotes inclusive and sustainable development. It accounts
for 70 percent of the national wealth in high-income countries, compared to 41 percent in low-income countries.
10
Climate change threatens to upend decades of progress in human capital accumulation that has helped people
live better lives and their countries become more prosperous.
Climate change disruptions at any life stage can have long-lasting and intergenerational eects. Climate shocks
and slower-onset climate change experienced early in life can have detrimental eects on health, livelihoods,
productivity, and asset accumulation in adulthood. The impacts on young people and adults spill over to younger and
older cohorts, as lower household income limits investments in health care, education, and nutrition for themselves
and their dependents. Recent studies from multiple countries link climate shocks that reduce household income
with lower learning outcomes for children and increases in child labor.
11
Climate shocks are increasingly having severe and immediate repercussions on people across the globe.
Flooding, landslides, hurricanes, and tornadoes interrupt schooling and health services, limit people’s ability to earn
an income, and displace millions. The impacts cut across all stages of life—from droughts that aect food security
and threaten infant nutrition to heat waves that exacerbate health risks, particularly for the elderly.
Slow-onset climate trends may not make headlines, but they are no less dangerous to people’s well-being and
productivity. Changing weather patterns, rising heat, drought, and desertification can reduce crop yields, increasing
malnutrition, and push families into poverty. Changing weather and flooding increase the prevalence of vector-borne
and water-borne diseases. Increasing food prices and health impacts from climate change are likely to drive the
largest increases in climate-induced poverty levels.
12
Across and within countries, the poorest and the most vulnerable people are disproportionately exposed to
climate risks and less able to cope with them.
13
Poverty forces people to live in less desirable areas that are more
likely to flood, are more prone to excessive heat or desertification, and lack access to water. Lack of quality housing
or other assets also puts poor people at higher exposure to climate risks within these locations. Poor people have
fewer savings and assets to recover from climate shocks or adapt to climate trends (Box 1).
Climate change also threatens to worsen gender inequalities.
14
Girls, for example, are at a greater risk of dropping
out of school during shocks. The increasing frequency and intensity of climate shocks could amplify this further.
Women are particularly reliant on nature-based livelihoods, and so, longer-term climate trends, like drought and
desertification, may have an outsized impact on their earnings.
10
Lange, Wodon, and Carey (2018).
11
Diallo (2022); Koohi-Kamali and Roy (2021); Nguyen and Pham (2018).
12
Jafino, Walsh, Rozenberg, and Hallegatte (2020).
13
Islam and Winkel (2017).
14
Deininger et al. (2023); Caruso et al. (2022).
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HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
This section presents evidence on how quick-onset climate shocks and longer-term climate trends aect
human capital accumulation and usage across the lifecycle, as well its impact across generations. The analysis
synthesizes existing global research about climate change’s impacts on people’s health, well-being, education, and
skills by age cohort: in-utero and early childhood development, school-aged children and youth, the working-age
population, and the elderly population.
Understanding how climate change aects people at dierent stages of life can point to policies that benefit
people and the planet. Smart human capital investments can help counteract the threats of climate change. And
policies that leverage people’s potential are also central to reducing climate change itself.
Figure 1: Direct links between the impacts of climate change on people informs climate-smart
investments in human capital
Life Cycle
Pregnancy and
Early Childhood
School-aged
Children and Youth
Working-age
Elderly
Implications for Human Capital
Premature birth, low birth weight, fetal and neonatal
mortality, potentially irreversible consequences for
physical and cognitive growth and development.
Increased risk of infant and under-5-mortality, stunting,
permanent eects on cognitive development and
educational achievement.
Reduced access to schooling and healthcare, reduced
educational outcomes, early dropout, malnutrition and
disease, and adverse investment decisions in human
capital.
Increased morbidity and mortality, increased respiratory
conditions and reduced cognitive functions.
Repercussion on incomes and poverty, increased
workloads, poor health and productivity due to climate
shocks, heat exposure and exacerbation of vector-
borne and water-borne diseases.
Key Climate
Vulnerabilities
In-utero exposure to
climate shocks.
Adverse eects of
malnutrition and
disease.
Family resource
constraints, and
destroyed infrastructure
Adverse eects of
disease and exposure
to climate shocks.
Pre-existing health
conditions and lack
of mobility.
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15
Tran et al. (2015).
16
Baten et al. (2020).
17
Fernandes et al. (2022).
18
Alkema et al. (2016); Raatikainen (2007); Zhao et al. (2021).
19
Le and Nguyen (2021).
20
Grace et al. (2015).
21
Dimitrova and Bora 2020; Skoufias and Vinha 2012; Umbers, Aitken, and Rogerson 2011.
22
Miller (2017).
23
Randell and Gray (2019).
Pregnancy and early childhood development
The impacts of climate shocks begin in-utero. Water-borne diseases, like diarrhea and cholera, can aect the
fetus during pregnancy and are strongly linked to adverse health outcomes, especially fetal death.
15
Increasing
droughts can amplify these health hazards through reduced availability of clean water for drinking, cooking, and
hygiene. Further, extreme weather events can significantly reduce antenatal care visits, institutional deliveries, and
postpartum care visits.
16
In Mozambique, an extensive study conducted following a cyclone highlighted substantial
disruptions in health services, with first antenatal care and postpartum visits within the initial week following the
disaster decreasing by 23 percent.
17
Fewer antenatal care visits are associated with adverse fetal and neonatal
outcomes, including low-birth-weight infants and more fetal and neonatal deaths.
18
Both food insecurity and rising temperatures resulting from longer-term climate trends are linked to lower birth
weights.
19
Over time, decreased seasonal precipitation can result in lower food production, aecting pregnant
women’s nutrition and resulting in cohorts with low birth weights. A study of 19 Sub-Saharan African countries
between 1986 and 2010 found that an increased number of hot days and decreasing precipitation were correlated
with lower birth weights and a higher proportion of low birth rates regardless of socioeconomic status, season of
birth, or country of residence.
20
In Vietnam, one standard deviation increase in temperature relative to the local
norm during the first trimester of pregnancy reduced a child’s weight at birth by 2.2 percent. In Colombia, exposure
to moderate heat waves during the third trimester reduced birth weight of babies by 4.1 grams.
Climate impacts in early childhood can have permanent eects on cognitive development and educational
achievement. Fast-onset climate shocks escalate the likelihood that a child will be stunted. Flooding, for example,
is linked to higher rates of stunting due to increased prevalence of water-borne and vector-borne diseases, such
as diarrhea, cholera, and malaria.
21
In Ethiopia, children who experience seasonal food scarcity during the intra-
uterine period exhibit shorter stature during childhood. An additional month of prenatal exposure to food scarcity
is associated with an estimated decrease in height of at least 0.44 cm by the age of eight. This eect becomes
even more pronounced with age, with a magnitude of 0.56 cm by the age of twelve.22 Longer-term trends also
have long-lasting implications on a child’s learning. A study conducted in Southeast Asia shows that a child who
encounters temperatures two standard deviations above the average in early life is likely to attain 1.5 fewer years
of schooling compared to a child exposed to average temperatures.
23
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HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
24
Baez, de la Fuente, and Santos (2010).
25
Jacoby and Skoufias (1997).
26
Björkman-Nyqvist (2013).
27
Babugura (2008).
28
Marchetta, Sahn, and Tiberti (2019).
29
Feeny et al. (2021).
30
Baez, de la Fuente, and Santos (2010).
31
Alderman et al. (2016)
32
de Janvry et al. (2006a, 2006b).
33
de Janvry et al. (2006a, 2006b).
34
Porter (2021).
School-age children and youth
For children and youth, climate shocks disrupt access to schooling and health care. Children face disruptions
from damaged infrastructure including schools, hospitals, and clinics that provide services, as well as bridges and
roads that they rely on for access. Even one climate shock can set back decades of human capital investments: in
Mozambique, flooding in a single year destroyed more than 500 schools constructed over the previous 20 years.
24
In addition to damaged infrastructure, loss of household income from a climate shock may cause parents to pull
children out of school. In southern India, adverse rainfall shocks led households to send children to work instead
of school to supplement the household earnings.
25
Education is more at risk for girls than boys from climate-related shocks. Families with less income are more
likely to withdraw girls from school.
26
For example, girls accounted for 70 percent of children withdrawn from
school after droughts in Botswana.
27
In Madagascar, during periods of less rainfall and more cyclones, adolescents
are more likely to drop out of school and start working, especially those from poorer.
28
Evidence from Vietnam
showed that rainfall shocks experienced early in life reduced the probability of that women, but not men, would
have formal sector jobs as adults.
29
While climate shocks may be short-term events, they cause children to fall behind permanently due to missing
school or dropping out altogether.
30
For example, drought-aected households in Zimbabwe delayed the start
of school for children by an average of 3.7 months, resulting in children completing 0.4 fewer grades
31
. In Mexico,
children who withdrew from school during climate-induced economic shocks were about 30 percent less likely to
continue studying relative to children who stay in school.
32
Moreover, a series of droughts in rural central Mexico
led to less schooling and increases in child labor in areas with insucient social protection.
33
The Young Lives
surveys which tracked nearly 12,000 children over two decades in Ethiopia, India, Peru, and Vietnam showed clear
correlations between climate shocks and lower cognitive and learning outcomes, due to crop failures and other
climate impacts which reduced food security and household incomes.
34
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Children’s long-term development also suers from the slow onset of climate change. For example, higher
temperatures and greater CO2 concentrations promote the growth of aeroallergens, such as pollen and mold,
which increase allergies and asthma among children.
35
Exposure to air pollution contributes to cell loss within the
central nervous system among young children in urban areas, creating subtle neurocognitive eects indicating early
evidence of neurodegenerative changes.
36
Air pollution and heat exposure aect learning and educational outcomes, with the current infrastructure ill-
suited to the changing climate. A study of the Organisation for Economic Co-operation and Development (OECD)
International Student Assessment data from 58 countries found that increases in the number of hot school days
contributed to dierences across and within countries in educational achievement, especially among students
from low-income households.
37
In Texas, a study of 39 schools found that high levels of air pollution resulted in a
significant increase in absenteeism, negatively aecting learning and test scores.
38
Working-age population
Among the working-age population, climate shocks have lasting repercussions on incomes and poverty.
In Bangladesh, the catastrophic flooding in 1998 resulted in wage declines of non-agricultural workers by
8.4 to 13 percent one-year after the flood, especially among those working in the services sector.
39
In Brazil,
beyond the immediate impacts of a drought, rural workers experienced wage losses that took up to five years
to recover.
40
Six years after the 1999–2000 drought in Ethiopia, 95 percent of the households who became
poor remained in poverty.
41
More recently, a study in Niger found that a one standard deviation decrease in
rainfall led to an 11 percent drop in per capita income, as well as negative effects on household consumption,
poverty, nutritional status, and school attainment. The adaptive ability of households, including agricultural
capital and income diversification, played a crucial role in determining the impact of these shocks.
42
35
Beggs and Bambrick (2005).
36
Brockmeyer and D’Angiulli (2016).
37
Park, Behrer, and Goodman (2021).
38
Currie et al. (2009).
39
Mueller and Quisumbing (2011).
40
Mueller and Osgood (2009).
41
Little et al. (2006)
42
Diallo (2022).
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HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
43
Lambrou and Nelson (2013); Muthoni and Wangui (2013).
44
Neumayer and Plümper (2007).
45
Bradshaw (2010).
46
Romanello et al. (2022).
47
Antonelli et al. (2020).
48
Shayegh, Manoussi, and Dasgupta (2020).
49
Hübler, Klepper, and Peterson (2008).
50
Fruttero et al. (2023).
51
Afridi, Mahajan, and Sangwan (2022); Chowdhury, Parida, and Agarwal (2022).
52
Afridi, Mahajan, and Sangwan (2022).
53
UN Women (2009); UNFCCC (2022).
54
Malaney, Spielman, and Sachs (2004); Romanello et al. (2022).
55
Tseng et al. (2009).
Adults also suer increased workloads from climate disasters, with dierent impacts on men and women. Men
usually have more work during extreme events (for instance, protecting dikes and dams; harvesting flood crops; and
participating in search, rescue, and evacuation), whereas women’s workload usually increases before the events
(helping with disaster preparedness, such as protecting seedlings and crops in the fields) and after the events (caring
for children, the sick, and the elderly). These traditional roles are being challenged, however, because of seasonal
outmigration among men. In India, more women than men work as wage laborers to compensate for crop losses,
while in Tanzania, wealthier women hire poorer women to collect animal fodder during droughts.
43
Overall, climate shocks have a disproportionate impact on women’s well-being. On average, natural disasters,
such as droughts, floods, and storms, kill more women than men and tend to kill women at a younger age. Analysis
in 141 countries between 1981 and 2002 showed that the gender-gap eects on life expectancy tend to be greater in
more severe disasters and in places in which the socioeconomic status of women is particularly low.
44
In Nicaragua,
for example, socially determined gender norms dictate that middle-class women are expected to stay in the home
even during floods and in risk-prone areas.
45
Longer-term climate trends also aect poverty and productivity. The relationship between heat and labor
productivity is increasingly clear, likely with global implications. In 2021, heat exposure led to 470 billion potential
labor hours lost globally among working adults.
46
Increasing temperatures reduce the availability of workers in
industries with high climate exposure such as farming and other outdoor activities.
47
In South Africa, a study on the
long-term impacts of future climate change on labor supply shows the welfare in terms of output per adult drops
by 20 percent compared to the baseline case with no climate change.
48
In Germany, modeling of climate scenarios
in 2071 to 2100 suggests that rising temperatures could result in an estimated output loss of between 0.1 percent
and 0.5 percent of the gross domestic product (GDP).
49
Like climate shocks, climate trends have an outsized impact on women’s ability to take advantage of economic
opportunities. Climate change’s impacts reverberate in unequal ways due to women facing systemic disadvantages
in access to jobs, income, resources, finance, and information. Droughts, extreme rainfall, and floods reduce
women’s employment, especially in households where parents have less education.
50
In India, empirical estimates
suggest that flood damages aect female employment more negatively than male employment in the long run.
51
Similar results are found for droughts, showing women’s workdays in India fall by 19 percent more than men’s
when a drought occurs, driven by the former’s lack of diversification to the nonfarm sector.
52
Climate change can
also worsen women’s time poverty. Household chores such as collecting water and fuel tend to fall on women and
girls. Depletion of these resources through land degradation, deforestation, and drought force women and girls
to spend more time on household tasks, reducing their time to learn, work, and earn.
53
Climate change directly aects adult health and productivity, as temperature and weather changes exacerbate
vector-borne and waterborne diseases.
54
In Taiwan, a study showed how hotter and more humid conditions
increased the probability of the working-age population being infected by dengue fever.
55
Outdoor workers are at
a higher risk of vector-borne infections because of their proximity to vector species and habitats, and farmers have
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56
Caminade, McIntyre, and Jones (2019); McManus et al. (2010).
57
Lukwa et al. (2019).
58
Girardin et al. (2004).
59
Gamble et al. (2016).
60
Dodgen et al. (2016).
61
Basu and Ostro (2008)
62
Kim et al. (2019).
increased exposure to some vector-borne diseases amplified by contamination of drinking water and irrigation
supplies by their livestock.
56
These diseases, such as malaria, reduce productivity through absenteeism as worker
hours are lost.
57
In Côte d’Ivoire, a study showed significant decreased productivity for farm workers infected with
malaria, highlighting the correlation between work absenteeism and overall yields and revenues.
58
Elderly population
The elderly population is vulnerable to climate change given preexisting health conditions and mobility
challenges.
59
Older adults with limited mobility may find it more challenging to evacuate before, during, and after
a climate shock. Some older adults, especially those with disabilities, may also need help with daily activities post
disaster, making their recovery more dicult. Further, they are more likely to have preexisting health conditions
that make them more sensitive to climate hazards and elevate physical and mental health risks. Finally, extreme
weather events can cause emotional trauma, and older people with cognitive disabilities can have more diculty
in coping with these events.
60
Poorer health in the elderly population also makes them less equipped to cope with slow-onset climate change.
Aging changes the body´s ability to respond to heat. Extreme heat exposure can increase the risk of illness and
death among older adults, and heat-related death most often occurs in vulnerable elderly people.
61
Climate change
may increase outdoor air pollutants, such as ground-level ozone and particulate matter in wildfire smoke and dust
from droughts. Poor air quality worsens respiratory conditions and impedes cognitive functions among older adults
who are less able to compensate for these environmental hazards. In South Korea, outdoor air pollution decreased
cognitive function, especially among elderly women living in urban areas.
62
Section 3 continues by presenting how public policies and programs can protect people from quick-onset climate
shocks, build their resilience to longer-term climate trends, as well as build and use human capital to help minimize
future climate shocks and change longer-term climate trends.
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HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
Poor countries suer disproportionately from the eects of climate change. They are more
exposed to climate risks and have less ability to cope with and recover from them. In the
aggregate, vulnerabilities are magnified in developing countries by a host of underlying factors,
such as greater incidence of disease, limited infrastructure and services, weak economies,
insucient emergency management, lack of insurance and funds for recovery after disasters,
and poorly informed governance and decision-making processes (Bowen and Ebi 2015;
Hallegatte et al. 2020).
At the household level, the poor are more exposed to climate shocks due to their location.
Poorer households tend to be in locations that are hotter and at greater risk of various climate
shocks and trends, due to both poor infrastructure in that area and the location itself. Informal
settlements are at risk because of lower-quality infrastructure, unsuitable building designs, and
lack of full access to essential services (Hallegatte et al. 2016). In Mumbai, India, evidence
illustrates how inadequate infrastructure in low-income neighborhoods worsens flood risks
(Patankar 2015). In Vietnam’s Mekong Delta, the poor are nearly 10 percentage points more
likely than the nonpoor to live in areas that frequently flood (Lam-Dao et al. 2011).
Poor people also are more likely to adopt negative coping strategies. Without savings to draw
on, poorer households are more likely to have to cut spending on basic needs and essential
consumption (for example, reducing food and health expenditures, withdrawing children from
school, sending children to work, and taking on added debt), thus potentially damaging their
long-term prospects (UNDP 2016). After the 1998 floods in Bangladesh, aected households
living in poverty had to borrow an amount equal to six–eight times the level of government
transfers (del Ninno, Dorosh, and Smith 2003).
Climate-induced shocks result in the poor losing a more significant share of income.
Consumption losses and recovery times for disaster-aected households vary according to
socioeconomic status and the availability of resources. In relative terms, poor people lose more
than nonpoor people from floods and storms. In Bangladesh, one study found that poor people
lost 42 percent of their household income due to flood damage compared with 17 percent
among nonpoor people (Brouwer et al. 2007). A study of Mumbai´s 2005 floods suggests that
total losses from the event reached 85 percent of the average annual income of the poorest
people. These impacts hindered the ability of households to recover their pre-disaster levels of
income and consumption (Patankar and Patwardhan 2016).
And climate change is driving up poverty rates. Impacts on agriculture triggered by climate
change aect poor people through food production impacts, higher prices, and declines in rural
incomes (Hallegatte et al. 2016). In addition, poor nonagricultural and poor urban households,
which are net buyers of food, are the most at risk of higher food prices. In a meta-study of
49 cases of food insecurity in southern Africa, Misselhorn (2005) shows that climatic drivers
and poverty were the two dominant and interacting causal factors.
Box 1. Climate change entrenches existing poverty
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Investing in human capital can create a virtuous cycle to protect people from the impacts of climate change
outlined in Section 1 and to empower them to build and use their human capital for climate action. Policies and
investments summarized in Figure 2 protect, build, and use human capital to help deliver more sustainable and
inclusive development. These investments cut across the lifecycle with intergenerational impacts that improve
people’s current well-being and that of future generations.
Policies to protect human capital minimize impacts across all age groups, as discussed in Section 1. They address
both the short-term shocks that people face from climate events and promote their resilience to longer-term climate
change impacts. In addition to safeguarding gains already realized in health, nutrition, and education, these investments
ensure that people have more resources to reinvest in human capital for themselves and their families. This is a key
first step in changing the current downward trends of climate change on people to an upwardly reinforcing cycle.
Build and use policies focus more on school-age children, youth, and working-age people to create a positive
dynamic between human capital and climate change. These policies aim to prepare people to cope with climate
shocks and the medium- to longer-term changes resulting from climate change. Build and use policies equip
people to take advantage of new climate opportunities for their jobs and livelihoods, enabling broad participation
Figure 2: Human capital and climate policy and program framework
HUMAN CAPITAL POLICIES & PROGRAMS
• Adaptive social safety nets
• Resilient and green
education and health
services
• Disaster risk management
and early warning systems
PROTECT
• Curricula reform for climate
awareness, behavior
change and innovation
• Reskilling and upskilling
workers for green jobs
• Aordable and climate-
resilient nutrition
BUILD
• Climate-resilient economic
inclusion and public works
programs
• Activate labor market
policies for just transition
• Women working in green
sectors
• Enabling environment for
green economic growth
USE
Lead to more sustainable and inclusive outcomes for people on a livable planet
SECTION 2:
Protecting, Building, and Using Human
Capital for Better Climate Outcomes
14
HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
Adaptive safety nets to smooth consumption and build resilience of the poor and vulnerable
Adaptive safety nets (ASNs) are noncontributory cash or in-kind transfer programs for poor and vulnerable
households to help smooth consumption and buer against income loss during crises.
63
Examples of ASN that
protect households from climate impacts include anticipatory transfers, disaster risk financing for households without
access to insurance, and public works activities that are shock-responsive by having the systems in place to scale
up quickly during emergencies.
63
Del Ninno and Mills (2015).
in creating and managing a green economy and sustaining income, assets, and intergenerational human capital.
Green investments in people also reduce climate change itself, preventing further damage to people’s health and
education across ages and generations.
This section presents eective human capital investments that lessen the climate impacts presented in Section 1,
by both improving resilience to climate change today and driving better climate outcomes for tomorrow.
Each investment area provides a summary of human capital policies and programs related to climate change and
the potential outcomes from eective investment. The Protect section also distinguishes between policies and
programs to respond to climate shocks as compared to climate trends. The evidence draws on country examples
to illustrate concrete actions and results. The section concludes with Box 2 to illustrate how the World Bank could
help leverage additional funding for the investments outlined here.
PROTECT
Protecting human capital requires policies and programs that safeguard people’s health, food security,
education, and earnings from the impacts of climate change. Dierentiating between climate shocks and climate
trends is most relevant here. Interventions include ensuring that people vulnerable to climate risks are equipped
with climate-responsive safety nets; adapting health and education services to be resilient in the face of climate
risks; and investing in inclusive disaster risk management (DRM) systems, including early warning systems (EWSs).
15
POLICY NOTE | AUGUST 2023
PROTECT AND INVEST
in
people
Cash and in-kind transfers can protect human capital from negative impacts of climate shocks, such as food
insecurity and lost income.
After a climate shock, transfers can oset income or asset losses, helping prevent
households from adopting negative coping mechanisms such as pulling children out of school to help generate
income, selling livestock and other assets, and skipping meals, or falling into—or further into—poverty. In Bangladesh,
an anticipatory cash transfer delivered to flood-prone households through mobile money resulted in 36 percent less
likelihood of those households being food insecure and a significant decrease in asset loss and damage, especially for
productive assets, and costly borrowing. Evidence also suggests that three months ex post, households that received
the transfer had higher levels of food consumption and higher earning potential compared to the control group.
64
The eectiveness of ASNs to respond to climate shocks requires investing in systems that can scale up quickly
in times of crisis. Social registries collect information from households that may not qualify for regular cash transfers
but are vulnerable. For example, Mauritania’s Social Safety Net program provides cash transfers to over 90,000
households on a regular basis, and it also has a social registry with information on 300,000 households that could
be vulnerable to shocks. This allowed the Government to reach an additional 70,000 food-insecure households
quickly during the 2022 lean season, the worst in a decade.
65
Digital payment systems, such as in the Bangladesh
example above, can also facilitate quick and eective cash transfers in times of crises.
In addition, ASNs can improve resilience against longer-term climate trends and help prevent long-lasting
negatives outcomes across the lifecycle. To build resilience to climate trends, ASNs can help increase savings
and productive assets, diversify livelihoods, create community assets, and provide health insurance to vulnerable
populations. The Sahel Adaptive Social Protection Program leverages cash transfers to reach the poorest households
across six Sahelian countries (Burkina Faso, Chad, Niger, Mauritania, Mali, and Senegal) while promoting investments
in human capital and productive inclusion to increase the resilience of the poor. Results from Niger show that
productive inclusion—which combine regular cash transfers with complementary support, such as trainings or
additional financing—demonstrate strong improvements in households’ economic diversification, resulting in greater
welfare and food security.
66
These investments have lasting positive impacts on household health, nutrition, and
education, further improving the long-term resilience of groups vulnerable to future climate trends.
67
Resilient and green service delivery to avoid disruptions to learning and healthcare
Resilient service delivery helps ensure continuity of care of climate-aected people of all ages. Avoiding
disruptions in health, education, and training service delivery due to climate shocks or changing how services are
delivered to reflect climate trends can have direct benefits on people from early childhood to old age.
Climate-resilient services require infrastructure that withstands climate shocks and responds to slower-onset
climate trends. Existing education and health infrastructure, for instance, needs to be updated to withstand climate
shocks such as floods or hurricanes, and new facilities should be built to cope with extreme events and located
both to avoid areas prone to storms and to consider rising sea levels. Other adaptations to adjust to longer-term
climate change include heat-resilient classrooms and health care facilities; improved ventilation to protect against
disease vectors and rising air pollution levels; and roads and bridges that are passable for students, patients, and
sta during increased rainfall.
68
But infrastructure is insucient: resilient services must have flexible modes of delivery and capacity for rapid
expansion in times of need.
69
Flexible delivery may include using virtual learning platforms to facilitate e-learning,
moving to temporary learning centers, and leveraging primary health care and community health systems for better
surveillance and response, including sucient emergency stocks, storage facilities, and trained sta. Integrated disaster
risk planning, with procurement and implementation plans, enables these responses across systems, as well as tools
for disaster risk finance and data and communication such as social registries and monitoring and evaluation systems.
70
64
Pople et al. (2021).
65
Social Safety Net System Project II (P171125) Implementation Status and Results Report (June 2023).
66
Bossuroy and Premand (2021).
67
de Groot et al. (2017); Skoufias, Unar, and Gonzalez-Cossio (2008); Taae, Longosz, and Wilson (2017); Zimmerman et al. (2021).
68
World Health Organization (2020).
69
Newton-Lewis et al. (2021).
70
Kagawa (2022).
16
HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
Countries are successfully implementing climate-ready service delivery systems to help maintain access to
education and health care in the face of climate shocks, with broad and long-term impacts on human capital
outcomes. For example, the Philippines implemented a program to improve the infrastructure of secondary schools
given the risks from typhoons. The school infrastructure program almost entirely mitigated the negative eect of
typhoons on educational attainment and had positive returns on years of schooling and labor market outcomes
such as the likelihood of working in a high-skilled occupation or in the nonagricultural sector, reflecting benefits at
later stages in the human capital lifecycle.
The same is true in preparing for longer-term climate trends, such as minimizing the health impacts of rising
temperatures. In Ahmedabad, India, extreme heat in 2010 inspired city leaders to develop a Heat Action Plan.
Interventions included using ‘cool roofs’ to reduce temperatures inside health facilities and moving neonatal units to
cooler hospital first floors to reduce heat-related illness, particularly among newborns. The plan integrated several
components that went beyond infrastructure, including increasing public awareness, initiating an EWS, and building
capacity for health care professionals that resulted in city-wide reductions in heat-related morbidity and mortality.
Overall, it is estimated that this planning has averted an estimated 1,190 deaths every year over the last decade and
has encouraged other Indian cities to develop Heat Action Plans.
71
Integrating climate resilience into school infrastructure and curricula can also protect education outcomes.
Nigeria’s Adolescent Girls Initiative for Learning and Empowerment (AGILE) invests in constructing climate-resilient,
energy-ecient, and eco-friendly schools with adaptations such as rainwater harvesting structures to assist with
both climate shocks such as floods and long-term climate trends related to water availability. At the same time,
the program provides digital literacy and remote learning so that schooling can continue during climate shocks. In
addition, it uses schools as a platform to teach about climate change and help students and teachers alike adopt
climate-friendly behavior through eco-clubs and climate champions.
72
In addition, investing in upgrading health and education facilities can contribute to national targets for GHG
emission reductions. If health care were a country, it would be the planet’s fifth largest emitter.
73
In total, it accounts
for between 4 and 5 percent of global GHG emissions. Health care supply chains make up 70 percent of this total,
and addressing this is vital for decarbonization.
74
Education contributes a smaller but still significant 2–3 percent of
global emissions.
75
Given the scope of education and health services within most national budgets and infrastructure
systems, these two sectors represent a significant opportunity for reducing national carbon footprints.
71
Hess et al. (2018); Natural Resources Defense Council (2016).
72
World Bank Group. 2020. https://documents1.worldbank.org/curated/en/613581596247523870/pdf/Nigeria-Adolescent-Girls-Initiative-for-
Learning-and-Empowerment-Project.pdf; World Bank Group (2023).
https://blogs.worldbank.org/nasikiliza/changing-lives-adolescent-girls-through-learning-and-empowerment.
73
Health Care Without Harm (2019); Rodríguez-Jiménez et al. (2023).
74
Health Care Without Harm (2021).
75
World Bank (2023).
17
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people
Climate-smart health and education systems capitalize on the dual benefits of decarbonizing and improving
resilience. Creating zero-emissions buildings and infrastructure can include adopting features like natural ventilation,
solar shading, and rainwater management. It can also involve using telehealth and e-learning technologies.
Renewable energy sources, such as solar, wind, and thermal energy, backed up by robust microgrids and battery
storage, not only slash carbon footprints but also help maintain service delivery amid climate shocks and trends.
76
Many low-carbon approaches also provide health benefits such as reduced respiratory infections from less air
pollution and lower infectious disease risk from improved sanitation and ventilation.
77
Disaster risk management tools to minimize negative impacts of climate shocks
By creating systems to predict, prepare for, and respond to quick-onset climate shocks, DRM helps protect
people from their worst impacts. These losses include increased mortality and morbidity, infrastructure destruction,
and financial costs. Emergency preparedness can include contingency measures to address droughts, flooding,
and heatwaves such as EWSs, relocation centers, climate insurance, or national emergency preparedness plans at
the national, subnational, or facility levels.
At the community level, EWSs help predict and prepare for climate events or health risks. An essential part of
DRM, EWS may include hydrological and meteorological (hydromet) services that look at weather variability, seasonal
changes, or extreme events. EWS also supports disease surveillance to monitor for seasonal outbreaks of dengue or
cholera.
78
Yemen’s national electronic Disease Early Warning System (eDEWS) was critical to detecting and alerting
health authorities of cholera outbreaks between 2016 and 2018 despite the ongoing conflict.
79
At the household level, a robust DRM system helps ensure that even the poorest and the most vulnerable can use
savings and access rapid support to restore assets, income, and livelihoods.
80
In Morocco, the World Bank-financed
Integrated Disaster Risk Management and Resilience Program uses disaster-risk financing and insurance components
to provide financial protection for households to enable them to recover from catastrophic events. The insurance
scheme provided pre-planned financial protection to more than 6 million people—more than 18 percent of Morocco’s
population—who became permanently injured or died or had their assets destroyed because of a catastrophe.
81
76
Health Care Without Harm (2021).
77
World Bank (2017).
78
Rentschler et al. (2021).
79
Dureab et al. (2019).
80
Hallegatte, Rentschler, and Walsh (n.d.).
81
GFDRR (2023).
18
HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
BUILD
Building human capital moves from the foundation of protecting people from climate change to investments to
realize people’s potential to contribute to climate action and a green economy. These investments cut across the
lifecycle from aordable and climate-resilient nutrition to new curricula on climate knowledge and climate-friendly
behaviors for younger generations as agents of change to reskilling and upskilling working-age adults already in
the labor market.
Curricula reform to promote foundational knowledge of children and behavior change at all ages
Education is key to improving people’s awareness of climate risks and helping shift their behaviors to mitigate
its eects across generations. Increasing educational attainment broadly is linked to better climate behaviors. In
Europe, legal reforms taken between 1960s and 1980s to promote compulsory education in certain countries to
improve educational attainment and showed a causal increase in pro-climate beliefs among present-day adults by
6.3 percent and an increase in pro-climate behaviors by nearly 9 percent.
82
Furthermore, tailored environmental
education programs can magnify positive behaviors. Meta-analysis of 169 studies on children and adolescents
across 43 countries found that environmental education significantly improved environmental knowledge, attitudes,
intentions, and self-reported behavior.
83
Incorporating soft skills, such as problem solving, into curricula reform can prepare graduates to help create
innovative solutions to climate challenges. Transitioning to greener methods of production, including goods and
services in traditional economic sectors, requires innovative thinking and problem solving. High- and medium-skilled
workers in green jobs display higher-level cognitive skills, as well as higher levels of formal education and on-the-job
training, compared to workers in non-green sectors.
84
Knowledge around sustainability and climate risks together
with innovation skills can support the development of local solutions that ultimately create greener jobs.
Children’s education is also a channel for intergenerational knowledge transfer and behavior change among
adults. Research shows that school-age children can be active agents of change in disseminating information
across communities on social and climate-related risks through their access to information from schools, media, and
technology.
85
A study among youth in the United States found that teaching youth about global warming increased
concerns of climate change among parents, with girls being more eective in influencing parents.
86
Educating
children, therefore, has the dual eect of creating a climate-conscious future generation and creating motivation
for parents to eect change immediately.
With thoughtful planning, the green transition is an opportunity to focus on girls’ education to reduce economic
gender gaps in the labor market.
87
A recent study found that only 62 women for every 100 men are considered to
have explicit skills in green technology (renewable energy, solar energy, or power distribution) that make economic
activities more environmentally sustainable, a figure that has remained stagnant since 2015.
88
Social norms and
attitudes toward girls’ education in these fields can act as a barrier, but climate change’s disruption and demand
for action present an opportunity to use education to upend stereotypes in science, technology, engineering, and
mathematics (STEM) fields. In Ghana, female participation in STEM at tertiary institutions rose from 12 to 15 percent
after clinics were set up to help female secondary students participate in STEM.
89
In Türkiye, an all-girls STEM
program called Girls Meet Science provided female STEM mentors to young girls from disadvantaged socioeconomic
groups and led to increased interest in STEM careers.
90
82
Angrist et al. (2023).
83
van de Wetering et al. (2022).
84
Consoli et al. (2016).
85
Tanner (2010).
86
Lawson et al. (2019).
87
Kwauk and Braga (2017).
88
LinkedIn (2022).
89
Bermingham and Engmann (2012).
90
Yabas et al. (2022).
19
POLICY NOTE | AUGUST 2023
PROTECT AND INVEST
in
people
Reskilling and upskilling young and working-age people for green jobs
A green transition requires building new skills among young people and adults to engage and evolve with the
green economy. IFC analysis suggests that climate business could generate 213 million jobs in emerging-market
economies between 2020 and 2030.
91
But to capitalize on this, the labor force must be well equipped with the skills
to make the green transition possible. A recent study by LinkedIn analyzing vacancies in 43 middle- and high-income
countries indicates the proportion of job advertisements requiring green skills (in renewable or solar energy) grew
by 23 percent between 2022 and 2023, but the share of those with green skills increased by only 12 percent.
92
Powering the green transition requires policy interventions to overcome the mismatch between the demand for
new skills and gaps in current public and private training programs. Skilling may range from on-the-job training
to help workers transition across sectors or establishing new tertiary education programs and curriculums within
technical and vocational education and training (TVET) institutions to meet the needs of the future labor market. In
Malaysia, the TVET sector developed a new curriculum on topics such as energy eciency, energy measurement
and instrumentation, and renewable energy to upskill the labor supply for green jobs.
93
In India, the Skills Council
for Green Jobs identified the skills needs for renewable energy, transport, waste management, construction, and
water management. The Skills Council also built credibility for new green training modules by integrating them
into the National Skills Qualification Framework.
94
Labor market analysis of green industries can inform reforms needed within skills training programs and which
types of skills could spark higher levels of job creation. Across various countries in the Middle East and North
Africa, the World Bank is partnering with governments to look at employment in renewable energy and energy
eciency. Analysis in the Arab Republic of Egypt and Morocco shows that careful planning for these energy
transitions could increase the annual job creation in these industries, particularly from investing in innovations that
improve the installation of clean energy systems. In addition, the research shows potential multiplier eects across
the economy and labor market more broadly from household energy cost savings as green energies become
more cost-eective.
95
Reskilling and upskilling in agriculture and aquaculture are key to ensure that people across all skill levels
have access to jobs that promote better climate outcomes. Kenya’s Climate Smart Agricultural Project aims to
improve agricultural productivity and build resilience to climate change by reskilling smallholder farmers to adopt
new climate-smart technologies. As of April 2023, the project supported more than 400,000 beneficiaries to adopt
at least one modern agricultural technology, innovation, and management practice to access markets and a range
91
International Finance Corporation (2021).
92
LinkedIn (2023).
93
Pavlova (2019).
94
Pavlova (2019).
95
World Bank MENA Energy (2022a, 2022b).
20
HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
Aordable and climate-resilient nutrition for healthier children and adults
High-return investments in nutrition can help reduce climate impacts for young children and mothers with
long-lasting eects on physical and cognitive development.
97
These include nutrition-specific (for example, micro-
nutrient supplementation and fortification for children, promotion of optimum breastfeeding and complementary
feeding practices, and emergency nutrition)
98
and nutrition-sensitive (for example, agriculture and food security,
water, sanitation, and hygiene)
99
interventions that address the underlying causes of malnutrition as well as broader
constraints to promoting better nutrition outcomes.
100
While these are particularly relevant in times of climate
shocks that increase food insecurity, not all of these interventions are available in areas of current need or where
climate change may increase future demand. For example, the use of high-nutrient ready-to-use therapeutic foods
(RUTF) has demonstrated impacts to prevent or treat malnutrition by ensuring food security in the context of quick-
onset climate shocks, but local availability of ingredients often limits production.
101
Pakistan has been successful in
producing its own RUTF based on locally sourced food, which has enabled more accessibility and cost-eectiveness
to provide climate-smart nutrition to vulnerable groups.
102
In the face of longer-term climate impacts, improving food security requires climate-resilient agriculture that
promotes better nutrition outcomes.
103
Integrating climate-smart agricultural practices such as planting two or more
crop types simultaneously, using improved seeds and fertilizer, crop rotation, and reduced tillage can help support
climate resilience and increase the production of high-nutrient crops. In Zambia, an evaluation of climate-smart
agriculture found that legume intercropping significantly increased yields and reduced the probability of low yields
even under critical weather stress during the growing season.
104
of agro-weather and advisory services.
96
With support from the World Bank, the Maldives is working to protect
its marine ecosystems through more sustainable waste management systems while developing a new cadre of
workers for sustainable jobs and entrepreneurship opportunities. The programs are strengthening waste-related
curricula for supervisory and policy professionals, providing essential vocational skills and training for youth just
entering the job market, and oering a ‘Waste to Wealth’ certificate course. Notably, the program provides green
jobs to people across a range of skill sets and across formal and informal sectors.
96
Kenya Climate Smart Agriculture Project (P154784) Implementation Status & Results Report (June 2023).
97
Tirado et al. (2013).
98
Ruel and Alderman (2013).
99
Ruel and Alderman (2013).
100
See The Lancet (https://www.thelancet.com/pb/assets/raw/Lancet/pdfs/nutrition_4.pdf) and Scaling Up Nutrition.
101
Tirado et al. (2013).
102
Testa, Polese, and Barile (2023).
103
Tirado et al. (2013).
104
Arslan et al. (2015).
21
POLICY NOTE | AUGUST 2023
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in
people
USE
Eective use of human capital requires policies that overcome the constraints that climate change poses to
livelihoods, jobs, and incomes, as well as policies that help men and women find greener jobs. The transition
across sectors may produce a skills mismatch, an important obstacle to the greening economy. Further, the transition
may be concentrated geographically, posing diculties for workers who lack geographic mobility, potentially
resulting in diminished wages in their new roles. Climate-resilient economic inclusion and public works programs
help poor and vulnerable workers have better and greener job opportunities. Active labor market policies help
youth and working-age people more broadly not only transition away from brown jobs but also help encourage
new green industries. Ensuring that climate policies are gender sensitive can foster a successful and inclusive
green transition. Policies for green growth, research and development, and innovation also empower people in
ways that spur greening the global economy.
Climate-resilient economic inclusion programs and green public works for vulnerable workers
Climate-resilient economic inclusion programs invest in low-skilled youth and working-age people to diversify
their livelihoods and to use their human capital in more resilient employment opportunities. Economic inclusion
programs boost the income and assets of poor people through coordinated support such as coaching, skills
training, access to finance, and linkages to markets. With an emphasis on climate resilience, these programs can
help vulnerable groups develop new practices for climate-smart agriculture or support households to diversify
income by developing o-farm self-employment skills, such as petty trade, shopkeeping, or other entrepreneurial
activities. In Rwanda, an integrated approach to managing cropland, livestock, forests, and fisheries addresses
the interlinked challenges of marginal rural livelihoods and climate-smart agriculture, while increasing productivity
in irrigated areas tenfold.
Green public works programs also benefit vulnerable populations, helping to both mitigate the impacts of
climate change and provide temporary employment opportunities. Green public works programs may integrate
community rehabilitation schemes such as watershed and soil conservation, reforestation programs, and rainwater
management. They also support people to diversify or transition into less emissions-intensive work and can help
ecosystem transitions by encouraging conservation, restoration, and natural resources management. The Productive
Safety Net Program in Ethiopia was able to increase tree coverage in participating districts by 3.8 percent, equivalent
to 4.16 million metric tons of annual negative CO2 emissions, by providing temporary employment through the public
works component, for up to 6.8 million people over a 15-year period.
105
The program exemplifies how human capital
can be used to drive better climate outcomes.
105
Hirvonen et al (2022).
22
HOW TO PROTECT, BUILD, AND USE HUMAN CAPITAL TO ADDRESS CLIMATE CHANGE
Labor market policies to support an inclusive, just transition
Active labor market policies (ALMPs) can facilitate people’s transitions to greener jobs, helping promote better
and more sustainable earnings and incomes. Climate change is changing the job market in myriad ways. First,
through climate shocks, it can disrupt people’s jobs and livelihoods. Second, national and global targets for
decarbonization are eliminating so-called brown jobs, such as those in the coal sector. Without adequate skills
to transition toward green jobs, lower-skilled workers may become unemployed and find employment in low-
productivity, unregulated, low-skilled services. And third, the development of green industries, such as renewable
energy or water and waste management, is creating new job opportunities for current and future workers.
ALMPs can help build resilience to climate shocks and longer-term climate trends by minimizing their impacts
on people’s earnings. DRM and ASNs discussed in the Protect section play an important role in osetting lost
earnings during climate shocks. ALMPs can complement these investments, helping create resilience before such
events, particularly for workers whose livelihoods depend on agriculture or natural resources. The Philippines
Green Jobs Act enacted in 2016 includes developing an unemployment insurance system to support workers
aected by structural change resulting from climate change and the transition toward a greener economy.
106
ALMPs are also critical in realizing a just transition away from brown jobs. To minimize scarring from job losses,
there is a need for policies that help workers through these losses and transition into alternative jobs.
107
ALMPs
may include the provision of unemployment benefits, public employment services, job search assistance, mobility
grants, or hiring subsidies. In Poland, the World Bank employed a machine learning tool to help identify transferrable
skills and potential job transition pathways for coal mine workers, building on international best practices to develop
guidelines for tailored support packages to ease the transition of the aected people.
108
As noted in the Build section, the transition to a greener economy will create opportunities for more and better
jobs too, and ALMPs can help prepare workers to meet this labor demand. Public employment services, job
search assistance, and hiring subsidies will be important instruments. Skills for new industries also will be critical.
The nature of the transformation of the industry will need to be country specific, and evidence-based analysis
can inform the design of specific policies to help workers most eectively. In China, the World Bank is supporting
research on the challenges and opportunities of a green and low-carbon transition on jobs and the labor market
including investigating the transition costs and cost-sharing mechanism for a just transition.
109
Gender-sensitive investments for women to work in the green economy
Breaking social norms and barriers to women’s economic participation in the labor market is fundamental to
ensure that ‘all hands are on deck’ in transitioning to a greener economy. As an essential catalyst to climate action,
women’s empowerment and leadership are associated with better resource governance, conservation outcomes,
disaster readiness, and the adoption of more climate-friendly decisions in the private sector.
110
Women’s global labor
force participation rate is under 47 percent compared to 72 percent for men, and sectors likely to see green job
growth tend to have even lower levels of participation by women. Discriminatory laws and social norms; biased hiring
practices; lack of access to mentoring, networking, or training opportunities; lack of preventative measures against
workplace sexual harassment; and inflexible childcare policies all present obstacles to women’s ability to join the
workforce and pursue dierent types of jobs, with spillovers that limit their engagement in climate opportunities.
111
An increasing number of governments are integrating gender equality goals into their climate change policies
and frameworks, complemented by programs that support both women’s economic empowerment and climate
action. Costa Rica was the first country among 12 tropical countries engaged in REDD+ to establish rewards for
106
Sharpe and Martinez-Fernandez (2021).
107
Bowen and Kuralbayeva (2015).
108
Christiaensen et al (2022).
109
World Bank Group. China Labor and Social Protection Reform Programmatic ASA FY23-25. https://opswork.worldbank.org/home/P180156.
110
Altunbas et al. (2021).
111
Deininger et al. (2023).
23
POLICY NOTE | AUGUST 2023
PROTECT AND INVEST
in
people
Human capital to promote research and development and to catalyze green economic growth
Research and development that can create future green employment opportunities and fight climate change
requires people with climate knowledge and skills. Research and development for climate action can include
measures to lower energy consumption and minimize ecosystem impacts, eco-marketing, or use of environmental
management systems in the production of goods and services. Innovation and entrepreneurship play an essential
role in greening production and in climate change adaptation and mitigation solutions. The Indonesia Green
Entrepreneurship Program (IGEP), funded jointly by the Republic of Korea and the International Labour Organization,
aims to promote an enabling environment and dialogue on green entrepreneurship complemented by tools for
universities and business development services to support green entrepreneurs with a ‘Start Your Green Business’
toolkit and training.
114
People also need to use their human capital to create economic policies that promote environmental protection
and green innovation.
115
Establishing guidelines and standards on sustainability can have upstream eects on the
demand for labor equipped with green skills, or downstream eects on how green human capital can improve
firm performance. In South Africa, a study on the automobile manufacturing sector found that firms that skilled
their workforce with increased innovation and training programs on environmental innovation adoption positively
influenced circular economy practices in supply chain management, quality assurance, and remanufacturing
operations, resulting in a significantly positive eect on firm performance.
116
women conservationists, recognizing the leading role that women play in natural resource management.
112
Several
other programs in Costa Rica also link women’s income generation and livelihood improvements to conservation
and sustainability eorts to protect the country’s forest areas. In Tajikistan, the World Bank-supported Rural
Electrification Project aims to increase women’s participation in green electrification, such as solar photovoltaic
(PV) and small hydro, wind, and battery energy storage systems. It focuses on access to electricity and income-
generating opportunities for households led by women, collaboration with energy companies focused on making
human resources policies more gender inclusive, providing career development workshops and trainings to women
employees, and raising awareness around unconscious gender bias.
113
112
The Warsaw Framework for REDD+ was adopted by COP19. ‘REDD’ stands for ‘reducing emissions from deforestation and forest degradation
in developing countries. The ‘+’ refers to additional forest-related activities to protect the climate, including sustainable forest management
and forest carbon stocks.
113
Deininger et al. (2023).
114
Indonesian Green Entrepreneurship Program (IGEP) | Green Growth Knowledge Partnership (n.d.).
115
Platform for Advancing Green Human Capital (2017).
116
Bag and Gupta (2019).
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The scale of needed climate financing is massive: the United Nations Conference on Trade and
Development (UNCTAD) estimates a need for US$1.7 trillion annually in developing countries
just for renewable energy. But, in 2022, they attracted only US$544 in foreign direct investment
for clean energy (UNCTAD 2023). Meeting these needs requires new resources and improving
ecient allocation and delivery of existing resources.
Increasing the available financing
The World Bank and international community are working to increase funding available for climate
change. The World Bank Group is the largest financier of climate action in developing countries,
providing over $31.7 billion in fiscal year 2022. Scaling Climate Action by Lowering Emissions
(SCALE) and Enhancing Access to Benefits while Lowering Emissions (EnABLE) comprise a new
multi-donor trust fund focused on enhancing access to international carbon markets and ensuring
inclusion of marginalized communities and disadvantaged groups in those programs. Other trust
funds initiatives include Bio-Carbon Initiative for Sustainable Forest Landscapes (Bio-ISFL), the
Carbon Initiative for Development (Ci-Dev), and the Forest Carbon Partnership Facility (FCPF). The
Crisis Response Window (CRW) provides International Development Association (IDA) countries
with additional resources that can help respond to severe natural disasters, such as the floods and
droughts in Malawi in 2015 and 2016 that devastated the agricultural sector and pushed vulnerable
households into poverty.
Crowding in private sector finance will be key in reaching the necessary scale of climate
investments. In Vietnam, the World Bank supported a US$50 million Emission Reduction-Linked
Bond that leverages Verified Carbon Units for private sector investment to pay for 300,000 water
purifiers and distribute them to schools. These will make clean water available to around two
million children and—by avoiding traditional methods of boiling water—also reduce carbon dioxide
emissions by almost 3 million tons over five years (World Bank 2023).
Improving the eciency of current spending
Countries must also look internally to reallocate current spending toward climate-smart investments.
Increasing the eciency of domestic resource allocation can help. In Indonesia, three rounds of
fuel subsidy reform helped create the fiscal space for financing a massive expansion of poverty-
targeted programs such as cash transfers reaching 10 million poor households—about 28 percent
of the country’s poor. The World Bank can help countries identify possible reform areas through
Public Expenditure Reviews and Human Capital Reviews.
But the financing itself is not enough: countries need the systems to deliver resources in times of
crisis. The World Bank has various tools that help countries prepare with the mechanisms needed
to react quickly. At the macro level, the World Bank also oers Disaster Risk Financing through the
Catastrophic Deferred Drawdown (Cat DDO), which is a contingent financing line that provides
immediate liquidity while funds from other sources are mobilized (World Bank 2018). At a program
level, the Contingency Emergency Response Component (CERC) is embedded in World Bank
operations as a contingent finance mechanism. In 2021, the World Bank activated CERCs under
two existing operations to redirect financing quickly to 70,000 vulnerable households aected by
drought in Madagascar (World Bank 2021).
Box 2. The World Bank, climate financing, and human capital
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To respond to climate change eectively, human capital needs to be at the heart of policy responses. This
policy note demonstrates the impacts of climate change across the lifecycle and provides a framework of policy
and program interventions to protect, build, and use human capital to minimize climate change impacts and create
opportunities for more sustainable and inclusive development on a livable planet. By demonstrating the scope of
impacts of climate change on people and people’s potential to contribute to climate action, the note also makes
a case for prioritizing human capital investments as part of countries’ Nationally Determined Contributions (NDCs)
and other climate strategies.
Countries must customize their response to human capital investments for better climate outcomes based on
their specific context. A country’s income level, human capital outcomes, existing basic service delivery systems,
levels of greenhouse gas (GHG) emissions, and exposures to dierent climate shocks and trends will inform the
policy and program investments needed. Country-specific analysis can build an evidence base to determine which
of these policies are most critical, given underlying and changing realities. Figure 3 outlines how human capital
investments contribute to the adaptation and mitigation goals typical of NDCs, the climate pledges that countries
make toward the Paris Agreement.
Figure 3. Investing in people empowers them to contribute to climate action
SECTION 3:
Conclusion
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Countries that are more vulnerable to climate impacts but contribute less to GHG would likely prioritize
adaptation-focused policy agendas. Adaptative capacity means the potential or ability of a system, region, or
community to adapt to the eects or impacts of climate change. People’s adaptive capacity is strengthened by
protecting health, education, and social safety net services during crisis periods, protecting income stability and
increasing diversification, building skills to learn and use climate-smart practices, and using human capital in green
public works and to promote productive inclusion.
Countries with higher GHG emissions may prioritize just transition and climate mitigation policies. Climate
mitigation is the limiting or removal of GHG emissions to reduce the rate of climate change. A just transition away
from GHG emitting industries requires policies and programs, such as job search assistance, mobility grants, or
hiring subsidies, to ensure that people can use their human capital in alternative jobs, despite losses in brown
industries. Human capital also promotes the use of healthy, skilled, and capable people to harness opportunities
aorded by climate mitigation to promote a green and inclusive economy through innovation and technology.
Elevating human capital investments in the climate agenda creates a virtuous cycle, shifting the emphasis
from people as victims of climate change to agents of climate action. Human capital investments contribute to
the capacity to adapt to climate change, as well as the eectiveness of mitigation actions. Through protecting,
building, and using human capital, people are better o in the face of climate shocks, more resilient to longer-term
climate trends, and empowered to contribute to a better climate future.
Human capital ensures that healthy, educated,
and empowered people can deliver sustainable and
inclusive development on a livable planet.
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