It is impossible to forecast future socioeconomic development. Past experience suggests we are simply not able to anticipate structural shifts, economic crises, technical breakthroughs, and geopolitical changes (Kalra, Gill, et al. 2014). In this paper, we neither _predict_ future socioeconomic change nor the impact of climate change on poverty. Instead, we follow the approach that is the basis of all IPCC reports, namely we analyze a set of _socioeconomic scenarios_ and we explore how climate change would affect development in _each_ of these scenarios. These scenarios do not correspond to particularly likely futures. Instead, they are possible and internally consistent futures, chosen to cover a broad range of possible futures to allow for an exploration of possible climate change impacts. People sometimes refer to these scenarios as “what‐if” scenarios, as they can help answer questions such as “ _what_ would climate change impact be _if_ socioeconomic development followed a given trend.” The goals are to better understand how the impact of climate change on poverty depends on socioeconomic development, to estimate the potential impacts in “bad” scenarios, and to explore possible policy options to minimize the risk that such bad scenarios actually occur.

We start by analyzing the drivers of future poverty, and we explore the range of possible futures regarding these drivers to create hundreds of socioeconomic scenarios for each of the 92 countries we have in our database. This analysis combines household surveys (from the I2D2 database) and micro‐simulation techniques (Olivieri et al. 2014; Bussolo, De Hoyos, et al. 2008; Bourguignon, Ferreira, and Lustig 2005) and is performed in a framework inspired from robust decision‐making techniques, in which all uncertain parameters are varied systematically to the full range of possible outcomes. We combine assumptions on future demographic changes (How will fertility change over time? How will education levels change?); structural changes (How fast will developing countries grow their manufacturing sector? How will the economies shift to more services?); productivity and economic growth (How fast will productivity grow in each economic sector?); and policies (What will be the level of pensions? How much redistribution will occur?). The range of possible futures of these parameters is determined based on historical evidence, and on the socioeconomic scenarios currently developed for the analysis of climate change, the Shared Socio‐Economic Pathways (SSPs) (Kriegler et al., n.d.; O’Neill et al. 2013). These sets of assumptions are used to generate hundreds of scenarios for the future socioeconomic development of each of 92 countries.

Then, we select two representative scenarios per country, one optimistic and one pessimistic in terms of poverty reduction and changes in inequality, and we aggregate them into two global scenarios. A first scenario is labelled “prosperity” and represents a world with universal access to basic services, a reduction in inequality, and the reduction of extreme poverty to less than 3% of the world population (this is one of the two official goals of the World Bank Group).<sup>2</sup> A second scenario is labelled “poverty” and represents a world where poverty is reduced, but not to an extent consistent with the goals of the international community, where access to basic services improves only marginally and inequality is high.

> 2 In this paper, extreme poverty is defined using a consumption poverty line at US$1.25 per day, using 2005 PPP exchange rates. Using the new poverty line (with 2011 PPP rates and the $1.90 line, see GMR, 2015) would not change our results in a quantitative manner, considering the consistency between the two PPP rates (Jolliffe and Prydz 2015) and the way we treat the uncertainty on poverty numbers.

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