The Impact of Socio-Economic and Climate Change on Poverty in Indonesia

Abstract

Climate change can impact farmers’ incomes as agricultural production still depends on the weather. Currently, the majority of the impoverished rely primarily on agriculture for their income. The connection between poverty and climate change has been extensively studied, but further research is needed in this area. This research was conducted to provide empirical evidence regarding the impact of climate change on poverty using time series data, which has never been done. This research wants to examine the impact of socio-economics (economic growth, agricultural sector growth, inequality, inflation) and climate change on poverty. This research uses time series data from 2007 to 2022. The Central Bureau of Statistics and Climate Change Performance Index (CCPI) reports are the sources of research data. The study results suggest that the government’s performance index in combating inflation, agricultural sector growth, and climate change has a positive impact on poverty. Poverty is negatively affected by the Gini index and economic growth. Government efforts to adaptively address climate change are necessary to prevent worsening impacts on poverty rates. To reduce the risk of crop failure, farmers must also practice practical agricultural management.