Yemen is facing a complex set of challenges around the nexus of development, conflict, and climate that exhibit significant regional variation. Yemen has long been the poorest country in the Middle East and North Africa and has the highest population growth rate globally, increasing pressures on water, food, and essential infrastructure and services. Prior to the onset of the conflict in 2015, the economy was caught in a jobless slow growth cycle leading to stagnant per capita income and rising levels of youth unemployment that have been on a downward trajectory. The population living in poverty had increased from 35 percent in 2005/2006 to 48.6 percent in 2014, the last year for which poverty data are available. The outbreak of the conflict has subsequently had devastating effects on the country’s social and economic development, fragmenting the country and exacerbating pre-existing vulnerabilities, with 80 percent of households in need of humanitarian assistance in 2023. Fragile, conflict and violence (FCV) affected countries like Yemen are not only disproportionally exposed to climate change, but they also lack the capacity to cope with its impacts, suffering more severe and persistent GDP losses than other countries due to climate shocks.

Today, Yemen is one of the most vulnerable and least prepared countries to deal with the outcomes of climate change. By 2050, aggregate temperature could rise by up to 1.69°C under more pessimistic climate scenarios, with coastal regions experiencing the highest increases in temperature during winter and spring, and highland and eastern interior regions during other seasons. Precipitation is projected to increase under all climate scenarios, with significantly wetter conditions expected across large parts of the country. These are projected to be as much as 43 percent under the more optimistic scenarios, with even the pessimistic scenarios projecting a 15 percent increase in precipitation by 2050. These changes are accompanied by increased variability and more intense precipitation events, leading to longer, hotter dry periods. These longterm climatic shifts manifest through complex pathways but present potential opportunities for parts of Yemen, while posing severe risks in the absence of appropriate investments, particularly for water and food security. The increasing intensity and frequency of climate shocks also increases the risk of floods, particularly in urban areas, and damage to critical infrastructure, all while compounding the challenges for Yemen’s human capital.

Yemen’s economic prospects will be significantly influenced by future climate conditions and political developments. Annual GDP is projected to decline by an average of 3.9 percent by 2040 compared to baseline estimates under a more pessimistic climate scenario that is characterized by increased temperatures and longer dry periods. These losses are primarily driven by reductions in crop production and fisheries, limitations on labor productivity, and the deterioration of health and connectivity infrastructure. In contrast, an optimistic climate scenario characterized by increased temperatures and precipitation could lead to higher crop yields and less severe impacts on other channels, resulting in a modest projected average annual GDP growth of 1.5 percent by 2040, even without adaptation investments. However, this growth would be insufficient to improve incomes and deliver benefits to the population. The degree of vulnerability to climate change will depend on the broader political environment, as well as the policy environment and investments in adaptation. Heightened conflict puts limitations on investment planning, shrinks market access, and thereby climate adaption takes place in an ad hoc manner as part of the broader humanitarian assistance. As Yemen moves towards peace, the economy becomes more resilient to climate change, with higher growth and market diversification enabling investments in climate adaptation. With peace and targeted adaptation investments, Yemen could realize GDP growth 2.6 percentage points above the baseline projections.