Abstract This paper argues that poverty assessments that use standard money‐metric indicators of poverty overlook the welfare of communities highly vulnerable to weather‐related extremes, and that an assessment of vulnerability to climate change should be an integral part of poverty assessment. Using Ghana as a case study, this paper evaluates to what extent the standard money‐metric measures of poverty represent the welfare of those households vulnerable to weather‐related extremes. In addition, the paper illustrates the importance of mainstreaming climate change into development strategies, highlights the importance of integrating vulnerability assessments and stresses the need for developing adaptation strategies for poverty alleviation. Copyright © 2010 John Wiley & Sons, Ltd.