Measuring poverty in the age of climate change

HOW we understand and measure poverty has evolved. From early income-based definitions, Nobel laureate Amartya Sen’s “capability approach” in the 1980s broadened the concept, viewing poverty not just as a lack of income but as the absence of basic opportunities and freedoms.

- By Knut Ostby and Mohamed Shahudh

Buildingon this, the UN Development Programme (UNDP) developed the Human Development Index (HDI) in the 1990s and, in subsequent years, formulated the Multidimensional Poverty Index (MPI). Annually released by the UNDP in partnership with the Oxford Poverty and Human Development Initiative (OPHI), the MPI measures human well-being and examines poverty through deprivations in health, education, and living standards, offering a more complete picture of poverty beyond income.

This year’s Global MPI Report 2025, “Overlapping Hardships: Poverty and Climate Hazards,” covers 109 countries representing 6.3 billion people. It finds that 1.1 billion people, or 18.3% of the global population, live in multidimensional poverty. Most of them are in Sub-Saharan Africa and South Asia, and more than half are children. For the first time, the report links poverty data with climate risk, revealing how climate change worsens the burden of poverty. Nearly 80% of the world’s poor, or around 887 million people, live in areas exposed to at least one of four major climate hazards: extreme heat, drought, flooding, or air pollution. Under high-emission scenarios, these regions could face 37 more days of extreme heat annually by mid-century, deepening existing inequalities.