Livelihood comprises the capabilities, assets and activities required for a means of living. A livelihood is sustainable when it can cope with and recover from stresses and shocks, maintain or enhance its capabilities and assets, while not undermining the natural resource base. Climate change compounds the complexity of efforts to secure sustainable livelihoods, acting as a threat multiplier. The incidence of weather events and climate extremes will have increasing livelihood impacts, both ruinous, as well as more minor shifts in patterns of rainfall, or short periods of extreme weather. The incidence of extreme events can place a high burden on national systems which ultimately shape adaptive capacity. People’s vulnerability to natural hazards and their capacity to cope, manage and respond to disasters is dependent upon different social, economic cultural and political processes: people are affected in different ways. A growing number of people and assets are in areas prone to hazards, and are therefore exposed to disasters. As a result of increased exposure and vulnerability to natural hazards, the total number of people dying in disasters globally has increased in the past few years.
Climate change will create new poor between now and 2100 in all economies. Climate variability, change and extreme events are an additional burden to those in poverty. Large populations of poor are presently concentrated in regions that largely depend on agriculture for livelihoods. This means that efforts to strengthen the resilience of the agriculture sector, and those who depend on it for their livelihoods, may offer major impact potential for GCF. Support for livelihood enhancement has increasingly focused on increasing resilience, or the ability to avoid significant deterioration or restore one’s livelihood quickly after a shock. The need to mainstream climate risk into national development policies has attracted increasing attention in this context, as have the linkages between adaptation and disaster risk reduction programming. Further, the potential for expanded access to insurance, particularly for people for whom there is presently very limited access to insurance, has attracted attention. There is also scope to use social protection programmes to help to support poor communities to deal with challenges and impacts that are linked to climate change through “adaptive social protection” programmes. The need to support and nurture “autonomous adaptation” of people, communities and private sector actors is also recognised. Other livelihood initiatives include: diversification of livelihoods, migration, food storage, communal pooling, market responses, and saving, credit societies and systems of mutual support. Many of these require some resource investment at the outset that climate finance could support.