How do physical climate risks induce climate poverty among poor households in China?

Purpose Physical climate risks pose a threat of climate poverty to impoverished people in ecologically fragile areas of China. This paper aims to explore whether and how physical climate risks exacerbate the poverty level of poor households in China to verify the existence of climate poverty. Design/methodology/approach Based on the data from 2010 to 2020 from China Family Panel Studies and physical climate risks data at the city level, this paper develops an interaction regression model to explore the climate poverty risk of China's poor households. Findings First, physical climate risks reduce the total expenditure of poor households by 6% during the sample period in China. Second, extremely high temperatures and droughts greatly exacerbate the poverty levels of poor households in China. Physical climate risks cause greater losses in expenditure for poor rural farming households or those with a lower education level, compared to non-farming or non-rural poor households or those with a higher education level. Finally, physical climate risks primarily exacerbate the poverty levels of poor households by damaging their natural capital and productive physical assets, weakening social capital and reducing household financial assets, thereby triggering climate poverty. The insufficient adaptive capacity of poor households further amplifies this effect. Originality/value This paper shows that physical climate risks have worsened poverty levels for poor households in China, identifies vulnerable households at a higher risk of climate poverty and offers guidance for prioritizing support. Additionally, it highlights the channels through which climate poverty occurs, providing insights into the design and implementation of adaptation measures by households and local governments.