natural disasters because they are affordable.<sup>128</sup> Other global evidence indicates that adverse climatic conditions are an important source of conflict among people and groups.<sup>129</sup> Research showing how climate change threatens economic development and poverty alleviation reveals the importance of seeing climate change adaptation as a key part of overall development policy. However, the research also has highlighted the substantial institutional and other challenges to implementing focused climate change adaptation measures and “resilience‐smart” development policies and investments: the problem of “adaptation deficits.” One reason these arise is that sustained adaptation to climate change is more complicated than traditional informal coping mechanisms, making adaptation costly and risky for poor households.<sup>130</sup> For example, poor migrants to cities from southwest coastal Bangladesh have low human capital, so it may take some time for them to gain enough income to be able to have sufficient funds to remit to their families. This is just one example of how marginalized groups in ecologically marginal areas can get left behind, even as economic development progresses in the more formal sectors.<sup>131</sup> Adaptation policies are subject to the same challenges of limited institutional capacities and other social capital deficits as are other development measures.<sup>132</sup> Improved access to infrastructure and financial services are among the elements needed to lower barriers to successful adaptation. Yet all too often, actions that can ameliorate climate change threats _and_ improve economic development prospects aside from climate change are not taken. For infrastructure, there is a tendency to focus on the cost of constructing capacity while not adequately appreciating the longer‐term costs of inadequate resilience, relative to the incremental cost of installing more resilient capacity.<sup>133</sup> For natural disasters, there is a tendency to focus more on asset replacement while under‐estimating the welfare cost of disrupted lives and livelihoods, leading to less than adequate measures to reduce risks in advance.<sup>134</sup> Increased income can have a powerful effect on the capacity of individuals to cope with climate change. In that sense, economic development and poverty alleviation are key ingredients for reducing vulnerability to climate change, just as reducing vulnerability to climate change enhances development prospects. However, higher income does not automatically assure less vulnerability. For example, a large bridge investment in Bangladesh connected a previously isolated territory to the rest of the economy, bringing with it substantial improvements in living standards. The improvement resulted largely from the previously isolated territory becoming able to utilize its comparative advantage in high‐value agriculture

> 128 Lall, Somik. V. and Uwe Deichmann. 2012. Density and Disasters: Economics of Urban Hazard Risk. _World Bank Research Observer_ 27, 2012, pages 74–105.

> 129 Burke, Marshall, Solomon M. Hsiang, and Edward Miguel, Climate and Conflict. _Annual Review of Economics_ 7 (1), 2015, pages 577–617.

130 Castells‐Quintana, David, Maria del Pilar Lopez‐Uribe, and Thomas K.J. McDermott, Adaptation to Climate Change: A Review Through a Development Economics Lens. _World Development_ 104, 2018, pages 183–196. 131 Barbier, Edward B, and Jacob P Hochard, Poverty‐Environment Traps. _Environmental and Resource Economics_ 74(3), 2019, pages 1239–1271.

132 Fankhauser, Sam., and Thomas K. J. McDermott, Understanding the Adaptation Deficit: Why Are Poor Countries More Vulnerable to Climate Events than Rich Countries? _Global Environmental Change_ 27, 2014, pages 9–18. 133 Hallegatte, Stéphane, Jun Rentschler, and Julie Rozenberg, _Lifelines: The Resilient Infrastructure Opportunity._ ‐ Washington, DC: World Bank, 2019. http://documents.worldbank.org/curated/en/111181560974989791/Lifelines <u>The‐Resilient‐Infrastructure‐Opportunity.</u>

> 134 <mark>Hallegatte, S., A. Vogt‐Schilb, M. Bangalore, J. Rozenberg,</mark> _<mark>Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters</mark>_ <mark>. Washington, DC: World Bank, 2017.</mark> <u><mark>https://openknowledge.worldbank.org/handle/10986/25335.</mark></u>

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