Article 3 - SDGs in Focus No Poverty (SDG Goal 1)

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Naila Nazir, Ph.D.

Postdoc (Fulbright) – Environmental Economics

Economics Department, University of Peshawar

SDGs in Focus: No Poverty (SDG Goal 1)

Unmasking Poverty: Analyzing Global and Pakistani Data in the Pursuit of Sustainable Development Goals

 

The Sustainable Development Goals (SDGs) are a set of 17 global goals established by the United Nations in 2015 to address various social, economic, and environmental challenges. Each goal has specific targets, and many of these targets are further broken down into indicators to measure progress. Here are the SDGs:

No

Sustainable Development Goal

1

No Poverty (Goal 1)

2

Zero Hunger (Goal 2)

3

Good Health and Well-being (Goal 3)

4

Quality Education (Goal 4)

5

Gender Equality (Goal 5)

6

Clean Water and Sanitation (Goal 6)

7

Affordable and Clean Energy (Goal 7)

8

Decent Work and Economic Growth (Goal 8)

9

Industry, Innovation, and Infrastructure (Goal 9)

10

Reduced Inequality (Goal 10)

11

Sustainable Cities and Communities (Goal 11)

12

Responsible Consumption and Production (Goal 12)

13

Climate Action (Goal 13)

14

Life Below Water (Goal 14)

15

Life on Land (Goal 15)

16

Peace, Justice, and Strong Institutions (Goal 16)

17

Partnerships for the Goals (Goal 17)

The definition of the poverty line varies based on different perspectives. Originally set at $1 a day in 1990 by the World Bank, the international poverty line was based on the national poverty lines of the poorest countries at that time.

Due to inflation and differences in price levels, this benchmark is adjusted. In September 2022, the international poverty line has been updated from $1.90 to $2.15 per person per day. However, later on it introduces the idea of using alternative poverty lines, such as the one typical of high-income countries, which is $24.35 per day. This broader definition sheds light on the significant proportion of the global population considered poor, particularly when applying higher standards. It emphasizes that the concept of basic needs is relative and dependent on a country's income level. In developing countries, basic needs might involve clothing and food, while in wealthier countries, they could include internet access, a vehicle, and a cell phone.

 

The percentage of the global population living below the poverty line in 2023 depends on which poverty line is under consideration:

Extreme Poverty:

Ø  Living on less than $1.90 per day: According to the World Bank's September 2023 update, 8.4% of the global population lived in extreme poverty in 2022. This translates to roughly 673 million people.

Ø  Living on less than $2.15 per day: Based on the UN's "Ending Poverty" factsheet, estimated figures suggest around 9.2% of the global population lived in extreme poverty in 2023, which would be roughly 700 million people.

Moderate Poverty:

Ø  Living on less than $3.65 per day: World Bank's March 2023 update estimated 23.6% of the global population lived below this line in 2021, representing 2.4 billion people.

Ø  Living on less than $6.85 per day: With the same update, 46.9% of the global population lived below this line, representing 4.4 billion people.

Multidimensional Poverty Index (MPI):

Ø  This approach considers different deprivations beyond income, like health, education, and sanitation. Based on the 2023 Global MPI report, 11.3% of the global population (1.1 billion people) lived in multidimensional poverty in 2020.

In 1990, approximately 2 billion people globally lived in extreme poverty, defined as surviving on less than $2.15 per day. By 2020, it is estimated that the number of extreme poor, increased by around 700 million. In 2023, around 9.2% of the world’s population was living below poverty line. Notably, if the poverty line used by high-income countries, $24.35 per day, were applied, it would reveal that a significant portion of the world's population, especially in Sub-Saharan Africa, 99% is living in poverty.

We present our analysis below to display a picture of the two variables:

Table:       Poverty Versus Population Below Poverty Line

Poverty Line Threshold ($/day)

Percentage of Global Population Below Poverty (%)

1.9

8.4

2.15

9.2

3.65

23.6

6.85

46.9

Taking the year 2021-22, the change in poverty line threshold versus population below poverty line is as follows: Between 1.9 and 2.15, the first variable demonstrated a growth rate of approximately 13.2%, while the second variable showed a slightly lower growth rate of approximately 9.52%. Moving to the interval between 2.15 and 3.65, the first variable experienced a substantial growth rate of around 69.77%, whereas the second variable displayed a notably higher growth rate of approximately 156.52%. Lastly, between 3.65 and 6.85, the first variable demonstrated a growth rate of approximately 87.67%, and the second variable showed that there is still a considerable growth rate of approximately 99.15%. This analysis shows that on average, as we move on from one poverty line threshold to the other, the increase is about 56.8% but the other variable average growth is about 89%, thus having a significant difference of more than 31%.

This information indicates that, on average, the population below the poverty line is experiencing a higher growth rate compared to the increase in the poverty line threshold. This discrepancy suggests a widening gap between the poverty line and the actual population living below it. The significant difference of more than 31% between the average growth rates implies that the challenges associated with poverty, as measured by the population below the poverty line, are intensifying at a faster pace than the adjustments made to the poverty line threshold.

Poverty estimates of Pakistan shows that in Pakistan, two main poverty lines are used to measure poverty:

National Poverty Line (NPL):

Pakistan defines its National Poverty Line (NPL) as the minimum monthly expenditure required to meet basic needs for food and other necessities. The Cost of Basic Needs (CBN) approach, based on Household Integrated Economic Survey (HIES) data, is used to estimate this threshold. The government hasn't released official poverty estimates based on the NPL since 2018-19, highlighting the need for updated data.

International Poverty Line (IPL):

The World Bank uses Purchasing Power Parity (PPP) to set international poverty lines, enabling comparisons across countries. Two common thresholds exist: $1.90 and $3.20 per day (2011 PPP). In 2020-21, 39.3% of Pakistanis lived below the $3.20 line, but data for the $1.90 line hasn't been officially reported recently.

The World Bank's recent report reveals that despite significant progress in poverty reduction over the past two decades, 25% of Pakistan's population still lives below the poverty line, with a notable concentration in rural areas. The Benazir Income Support Program (BISP), designed to alleviate poverty, has increased benefit levels but accounts for only 10% of average household consumption. The COVID-19 pandemic and the 2022 floods exacerbated poverty, exposing the country's vulnerability to climate change-related disasters.

There is a potential compromise between the two crucial Sustainable Development Goals (SDGs): SDG 1 (No Poverty) and SDG 13 (Climate Action). It posits that efforts to address extreme poverty, particularly through economic development, may inadvertently lead to increased carbon emissions, thus challenging climate action goals. However, the strategic measures to mitigate this compromise highlights the significance of SDG targets 7.3 and 10.1, calling for enhanced energy efficiency, pro-poor growth, and reduced inequality. If every country aims to eliminate poverty based on the standard set by a typical upper-middle-income nation, which is $6.85 per day, it could result in using 46 percent of global emissions. However, there is potential to reduce this impact by addressing inequality, enhancing energy efficiency, and transitioning more rapidly to renewable energy sources.

Eradicating Poverty with Minimal Impact on Net-Zero Goals

Net-zero refers to the state where human-caused greenhouse gas emissions are balanced by their removal from the atmosphere. This means that any greenhouse gases we emit are being offset by an equal quantity being removed, ultimately achieving a net zero balance. Three scenarios analyze the impact of ending extreme poverty on achieving net-zero emissions by 2050. Each assumes continued progress in energy efficiency and renewable adoption based on historical trends.

1.              Baseline Scenario:

ü  Reaching the goal of ending extreme poverty by 2050 would only increase the emissions required for net-zero by 4.9% of global 2019 levels. This suggests that eradicating poverty presents a minor challenge to achieving net-zero.

2.     Optimistic Scenario:

ü  This is the most positive scenario, suggesting that with concerted effort, poverty reduction and emissions reduction can be achieved simultaneously. If every country could match the top 10% performers in improving energy efficiency over the last decade, achieving the poverty reduction target would only contribute to 3% of the global emissions recorded in 2019. This highlights that concentrating on enhancing energy efficiency could significantly lessen the impact of poverty eradication efforts on global emissions. This optimistic scenario envisions all countries enhancing their energy efficiency, mirroring the top 10% of nations that achieved the highest gains in the past decade.

3.     Reducing Inequality:

ü  Closing the gap between high and low emitters within countries could bring the additional emissions from poverty eradication down to 1.8% of global 2019 levels. This scenario underlines the importance of addressing inequality for both poverty and climate goals.

   

Global Progress

Energy Efficiency: International Energy Agency (IEA) 's "Decade for Action Highlights – Energy Efficiency" report found that global energy efficiency progress reached 2.2% in 2022, twice the average over the previous five years. World Economic Forum (WEF)'s "Energy efficiency needs to double, plus other energy news" article states that over half of studied nations (150 by the IEA) achieved notable energy efficiency gains (4%+) three times during the past decade. China, France, Indonesia, Japan, UK, Sweden, Norway, Denmark are few countries having progress in the area.

These scenarios demonstrate that ending extreme poverty has a relatively small impact on achieving net-zero emissions by 2050. Strategic improvements in energy efficiency and tackling inequality within countries can further minimize this impact, suggesting that both goals can be pursued simultaneously.

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