unskilled jobs in agriculture in favor of the industry and service sectors (the share of agriculture is divided by two in the total number of jobs, and the share of industry increases by 40%. Productivity growth reaches 4.6% per year in the agriculture sector, where most of the poorest people work, and 6% in the rest of the economy). Governance is good, and fiscal systems are efficient, allowing for high levels of redistribution. Even the most vulnerable populations have access to universal health coverage, water and sanitation, and efficient safety nets. And agricultural workers have enough market power to receive a large share of agricultural price increases if price shocks occur.

## **_Poverty scenario._**

This scenario is pessimistic in that it assumes high population growth (population follows the SSP4 trend with low education levels), low economic growth, and greater inequalities in Vietnam in 2030. In this scenario 2.7 million people still live in extreme poverty in 2030, and 44 million people live with less than 4usd per day. The share of agriculture in total jobs only decreases by 15% and participation does not increase. Productivity growth in agriculture is only 1.8% per year whereas it is 5% per year in the services sector. There is no industrialization in this scenario, with a constant share of jobs in industry and a slow productivity growth (only 1%) for the industry sector.

These two scenarios are counterfactual _reference_ scenarios, which do not include climate change. In a second stage, we add climate change impacts into each of these scenarios. We do not attribute probabilities or likelihood to our scenarios, as we are not interested in forecasting the future of poverty. Instead, we want to explore how the impacts of climate change on poverty are different in different development scenarios, with and without climate change, to inform decision‐making on poverty reduction and climate policies (Box 1).

# The effect of climate change on poverty is a combination of many sectoral impacts

For each of the two selected socioeconomic scenarios ( _prosperity_ and _poverty_ ) we introduce climate change impacts on food prices and production, natural disasters, and health, drawing on the results from chapters 2 to 4 in _Shockwaves_ (Figure 3). In the projections of all households modeled in our scenarios, we adjust the income and prices to reflect the impact of climate change on their ability to consume, and derive the impact on poverty. The impacts are estimated using sectoral models (such as crops and agricultural trade models) and include adaptive behaviors (such as changing agricultural practices or trade patterns).

With a 2030 horizon, impacts barely depend on emissions between 2015 and 2030 because these affect the magnitude of climate change only over the longer term, beyond 2050. Regardless of socioeconomic trends and climate policies, the mean temperature increase between 2015 and 2035 is between 0.5 and 1.2°C—and the magnitude depends on the response of the climate system (IPCC 2013). The impacts of such a change in climate are highly uncertain and depend on how global climate change translates into local changes, on the ability of ecosystems to adapt, on the responsiveness of physical systems such coastal zones, and on spontaneous adaptation in various sectors (such as adoption of new agricultural practices or improved hygiene habits).

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