Cross-Cutting Issue 2: Climate Change and the Environment

Issue 2 highlights the role of climate change and the environment in influencing structural transformation and productivity within and across industries, sectors, and regions.

Issue 2 Climate Change and the Enviroment.jpeg

Climate change and the environment is becoming an increasingly significant challenge for lowerincome countries. This has the potential to influence all areas of structural transformation including the five core research themes. Agriculture, the primary industry in many lower-income economies, will be severely impacted while emerging industries may be subject to new environmental standards and frictions curtailing their productivity and expansion. Changes to the climate and environment such as higher temperatures and extreme weather events have the potential to damage labour productivity and human capital accumulation. Physical capital such as infrastructure is also likely to be damaged by these factors. Other challenges related to increased migration and conflict are also expected as regions of the world suffer from more extreme weather. It is essential to examine how climate will impact all these processes and, in turn, how these processes will affect climate and the environment.