characteristics, is a better measure of long-term income than the observed one-year income. Predicted income should complement the conventional approach of defining poverty groups.

Using median observed and predicted incomes as the cut-off levels, we identify four different categories of households: (i) _income & asset poor_ (low observed and low predicted income, the structurally poor), (ii) _income rich & asset poor_ (high observed and low predicted income, the stochastically non-poor), (iii) _income poor & asset rich_ (low observed and high predicted income, the stochastically poor), and (iv) _income & asset rich_ (high observed and high predicted income, the structurally non-poor). The background for this classification is given in section 2.

We also we present key climate concepts and the terminology of the fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR5) report (Field et al. 2014), which distinguishes between _exposure_ and _vulnerability_ , with the latter including adaptive and coping capacities. We provide a brief discussion of likely implications of climate change on natural resource systems and on livelihoods.

The data and methods are described in section 3. The poverty classification and the main analysis are done using the global data set of the PEN project. Climate data are from the Climate Research Unit (CRU) of the University of East Anglia, while forest cover data are MODIS-based (Hansen et al. 2010). The results for the income prediction and the subsequent household categorization is presented.

Section 4 addresses three specific questions related to _exposure_ : (i) Are the poor more exposed to extreme climate conditions (temperature and rainfall), including higher climate variability? (ii) Is exposure to large weather anomalies in the survey year related to lower household income, and how does exposure to anomalies vary across poverty categories? (iii) Are self-reported shocks related to lower household income, and how does shock exposure vary across poverty categories?

Section 5 addresses three specific questions related to _vulnerability_ and environmental income: (i) Do the income and/or asset poor households have higher environmental reliance and higher income diversity? (ii) How important is increased harvesting of forest and other wild products as a coping strategy after a shock, and how does this strategy vary across households, and type and severity of the shock? (iii) Do the income and/or asset poor have poorer physical access to forest resources and are their resource base more exposed to degradation? We conclude and provide some policy recommendations in section 6.

# **2 Concepts and frameworks**

## **2.1 Climate terms**

_“The climate is what you expect; the weather is what you get” (unknown)._ _Climate change_ refers to “a statistically significant variation in either the mean state of the climate or in its variability, persisting for an extended period” (IPCC 2001, Glossary). _Climate variability_ is a related concept, and refers to “variations in the mean state and other statistics (such as standard deviations, the occurrence of extremes, etc.) of the climate on all temporal and spatial scales beyond that of individual weather events” (IPCC 2001, Glossary).

We look at the mean and standard deviation of rainfall and temperature over a 30 year period in the study sites, and refer to these as _climate conditions_ . We do not assess whether these have changed systematically over the 30 year period (climate change). While climate change refers to long5