In the _prosperity_ scenario, even though prices increase by 2% in the high impact scenario and agriculture revenue decreases by 1.17%, the impact on poverty is nearly inexistent, because households are less vulnerable to food price increases and there are fewer unskilled farmers.

# Natural disasters

To account for climate change impacts on natural disasters by 2030, we assume that the fraction of the population that will be annually affected<sup>3</sup> by a disaster (about 10% of the population in Vietnam today) increases by 40 percent in the low impact case and by 120 percent in the high impact case, which is in the range reported by (Bouwer, 2013; IPCC, 2014, 2012) for the expected rise in economic losses. Ultimately, these numbers will depend on the effectiveness and timeliness of adaptation to new climate conditions.

In the low‐impact case, we assume that affected people lose 20 percent of their annual income if they are poor and 10 percent if they are non‐poor; in the high‐impact case, the losses would be 30 percent for the poor and 15 percent for the non‐poor.<sup>4</sup> These numbers are in line with post‐disaster household surveys, even though much higher values are often observed (Patankar 2015; Patankar and Patwardhan 2014; Noy and Patel 2014; Carter et al. 2007). We also assume that natural disasters affect income only during one year, which is a conservative estimate that is valid for small disasters, but not for large scale events like Typhoon Yolanda in the Philippines or Hurricane Katrina in the United States.<sup>5</sup> Our results show that for natural disasters, in the high impact scenario, the number of poor people rises by 130,000 people in the _poverty_ scenario, and the number of people below 4usd per day rises by 83,000 people. Here again, disasters have nearly no impact on poverty in the _prosperity_ scenario ( Figure 4).

# Health and high temperatures

We now include a set of additional impacts of climate change on health (malaria, diarrhea, and stunting), based on the literature reviewed in chapter 4 in _Shock Waves_ .

For _stunting_ , we include the additional share of children estimated to be stunted because of climate change in 2030. Today in Vietnam 25 to 40% of children under 5 in the three poorest quintiles get stunted. To factor in development, we use data from the Demographic and Health Surveys (DHS) by wealth quintile to explore the relationship between household income and stunting. We find that the prevalence of stunting drops for families whose income is above $8,000 per year. We calculate the fraction of the stunted individuals in the families with income below $8,000, so that stunting prevalence is consistent with data for the current situation. Then, we increase this fraction using projections from (Hales et al. 2014) to account for climate change. We assume that stunted individuals have lifelong earnings reduced by 5 percent (low‐impact scenario) and 15 percent (high‐impact scenario), regardless of employment sector and skill level.

> 3 We use the fraction of people who lose income. We cannot use data on the number of “affected persons” because the usual definition of _affected_ is much broader and includes people who do not lose income because of the disasters.

> 4 Because the analysis proposed in chapter 3 does not include all countries, we assume that poor and non‐poor people are equally exposed to natural disasters.

> 5 Note that the impact of droughts on children through stunting is accounted for in the health impact category.

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