reduce mean returns. For example, many drought-resistant crops have low returns, leading to more security but also less poverty reduction (Morduch 1995; Dercon 1998). Some alternative investments may reduce risks without affecting expected returns, such as flood protection infrastructure, although they may require substantial upfront investment.

More crucially, these policies appear to start from the premise that for poverty reduction, the best investment is to ensure that adaptation occurs where the poor are currently located. However, because this adaptation investment has opportunity costs, for a dynamic process of poverty reduction, investing in agricultural resilience for marginal, increasingly drought-prone areas may not be effective or efficient. Instead, investment could be used to speed diversification out of agriculture for affected populations, including via migration, in line with well-established routes out of poverty (Blake et al. 2011). Without such careful weighing of different alternatives for adaptation for the poor, the risk may be exacerbated that the poor will remain trapped in unsuitable areas and with low-value livelihoods and that they will find it increasingly difficult to move out of agriculture as part of the economic transformation. In short, processes consistent with spatial poverty traps, as discussed previously, are also a risk with forms of adaptation investments that focus disproportionately on marginal rural areas.

Related concerns should be highlighted when considering adaptation or other resilience-enhancing investments in urban settings. An example is infrastructure investment to avert the consequences of sea-level rises or to protect assets against extreme weather events in one of the many large coastal cities at risk. The greatest direct economic returns for these investments would be from protecting the business districts or the residential areas of the rich because these assets are of the highest value. Similarly, if relocation investments are necessary, they would most easily be accomplished by protecting businesses and the highest value assets in cities. Many of the poor are located in flood plains and unplanned settlements, and they would find it far costlier to move permanently, partly because their main assets are the houses in which they live without legal title. Large-scale infrastructure investments to protect them are hardly sensible because these marginal areas should not be places of urban settlement. Sensible urban resettlement policies would need to be designed with sensitive relocation strategies to ensure that poor populations are not spatially trapped (see, for example, Patel et al. 2002, for a description of sensitive resettlement in the case of Mumbai; other examples are in World Bank 2011).

Conclusion: Is Green Poverty a Possible Consequence of Green Growth?

There is no doubt that environmental change is affecting the poor disproportionately, whereas growth is essential for poverty reduction. Green growth is offered as a recognition of the need to sustain the growth required for poverty reduction while ensuring that environmental costs are internalized. Until recently, however, discussions of green growth have said little about _how_ it is realized other than conventional measures for externality internalization and innovation. Even less has been said about the potential consequences on poverty reduction from policies that steer an economy onto an environmentally sustainable trajectory.

In this paper, we do not take issue with whether growth can be sustained, although environmental costs must be internalized. We argue that internalizing environmental constraints may change the 15