# **1. Introduction**

Globally, an estimated 700 million people live below the USD $1.90/day poverty line, with many more balancing just above it<sup>1</sup> (World Bank, 2015a). This substantial part of the world population is particularly vulnerable to external shocks, including those caused by natural disasters such as floods and droughts. Such disasters can reduce household income and destroy houses and productive capital. For example, after the 2004 floods in Bangladesh, Brouwer et al. (2007) found that poor households who were affected by the flood lost more than twice as much of their total income as affected non‐ poor households. This illustrates the consistent finding that poor people are more vulnerable to disaster events (Carter et al., 2007; Rabbani et al., 2013; Patankar and Patwardhan, Forthcoming). In addition to losing more, poor households have a relatively lower capacity to deal with shocks compared to non‐poor households due to lower access to savings, borrowing, or social protection (Kundzewicz and Kaczmarek, 2000; Masozera et al., 2007; Highfield et al., 2014).

Natural disasters have consistently been shown to be a key factor responsible for pushing vulnerable households into poverty, and also for keeping households poor (Sen, 2003; Krishna, 2006). Just as importantly, the exposure to natural hazards may reduce incentives to invest and save, since the possibility of losing a home due to a flood or livestock due to a drought makes these investments less attractive (Cole et al., 2013; Elbers et al., 2007). This vulnerability of poor people to natural disaster risk is particularly worrying in the context of climate change, which may increase the frequency, intensity, and spatial distribution of heavy precipitation, floods, and droughts (IPCC, 2012b). Beyond its aggregated impacts, future climate change may represent a significant obstacle to the sustained eradication of poverty (Hallegatte et al., 2016).

Several previous studies have attempted to draw statistical relationships between national‐level economic indicators and reported disaster losses on a global scale to find out if poor countries are more affected by natural hazards (Ferreira et al., 2011; Jongman et al., 2015; Kahn, 2005; Peduzzi et al., 2009; Shepherd et al., 2013; Toya and Skidmore, 2007). Although these studies reveal a statistical relationship between vulnerability and average income, they do not investigate the spatial or social distribution of the losses within a country. Recent advances in the global spatial modelling of flood risk (Arnell and Lloyd‐Hughes, 2013; Ceola et al, 2014; Hirabayashi et al., 2013; Pappenberger et al., 2012; Ward et al., 2013, 2014, 2015; Winsemius et al., 2013, 2015) and drought risk (Prudhomme et al., 2014; Schewe et al., 2014) have led to improved estimates of the global population exposed to natural hazards under the current and future climate, but these have not been translated into results specific for different incomes within a country.

To our knowledge, the relationship between poverty and exposure to floods and droughts has only been studied on a case‐study basis for a few countries. A literature review of 13 of such studies, conducted as part of this paper, shows that poor people are often disproportionately overrepresented in hazard‐prone areas. As shown in Figure 1, only one of the 13 studies reviewed finds that non‐poor people are more exposed than poor people. Although these cases highlight that a relationship may

> 1 <u>http://www.worldbank.org/en/topic/poverty/overview</u>

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