How ‘just giving money to the poor’ helps them adapt to climate change

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4 April 2011

Programmes which transfer money directly to the poor help them adapt to climate change. That´s what I´m suggesting in a new briefing paper to be presented at the upcoming conference on ‘Social Protection for Social Justice’, will be held at the Centre for Social Protection in Brighton between the 13th and 15th of April. 

For some people it´s not an obvious link to make: how can ‘just giving money to the poor’ help them adapt to climate change? Well, based on the available literature on cash transfers, we can say that cash transfers do have an impact, mainly by protecting and building up ‘adaptive capacity’ – that´s basically the ‘stuff’ people need to adapt, and includes things like income, nutrition, education and productive assets such as livestock.

Cash transfers and adaptive capacity

Meeting basic needs. A lot of the people who are most vulnerable to climate change also struggle to meet their everyday needs. Before these needs are met, it´s unlikely that people will be able to adapt to climate change. Studies of cash transfer programmes such as Oportunidades in Mexico have shown that the children of recipients eat more, and eat better. That has a long-term payback, because kids who are well nourished are likely to do better at school and be more productive at work throughout their lives.

Helping people respond to shocks. Being hit by a climate-related shock, such as a drought, is always a bad thing, but it´s far worse for people who don´t have much money. Cash transfers can mean that, even when times are bad, people still have the money to feed themselves.

Avoiding damaging coping strategies. Shocks frequently force the poor into strategies that undermine their long-term wellbeing and adaptive capacity. These include things like pulling children out of school, getting into debt or begging. Cash transfers can mean that they don´t have to do this. For example, in one project in Malawi, cash transfers meant people didn´t have to get into debt or sell off productive assets during the ‘hungry season’.

Facilitating innovation. The ability to innovate is crucial, both to get out of poverty and adapt to climate change. The problem is, the poor often can´t take the risk of innovating, because if it goes wrong, they won´t have anything to fall back on. People who receive cash transfers are more likely to make productive investments: not just because they have more money, but because they know that they can take risks without disastrous consequences.

Money for investment. Although most of the money from cash transfer programmes is usually spent on immediate needs, a significant minority is invested productively. In Paraguay, for example, people who received grants from the Tekoporã programme invested 40–50 per cent more money in agriculture than people who didn´t receive them. So cash transfers can give people more options to actively improve their lives, and build up their adaptive capacity.

- Migration and mobility. As IIED work has shown, migration is one of the best ways for the poor to improve their wellbeing and build up long-term adaptive capacity. In some cases, migrating may in itself be a way of ‘adapting’ to climate change. Cash transfers have been shown to facilitate migration in South Africa and Mexico, because they subsidise the costs of migrating, and provide a safety net in case migration doesn´t work out.

Why cash transfers?

Of course, cash transfers don´t do everything. They don´t improve public infrastructure or urban planning, protect natural resources, or create new technologies. So they can only ever be one part of the ‘adaptation toolkit’. Even so, it is possible that they are prerequisites for successful adaptation. By helping people to meet daily needs, cash transfers could provide a foundation for other policies to work.

And perhaps one question that really needs to be asked is an ethical one: who actually has the right to decide how adaptation finance should be spent? Should it be governments, who often ignore the interests of the poorest? Or NGOs, who can have quite subjective ideas of ‘what the poor need’? What about those people who have done the least to contribute to climate change, and actually have to live with the consequences of it?

The way forward

Linking cash transfers to adaptation leads to two policy implications. First, where appropriate, new cash transfer programmes should receive adaptation finance. Because many of those countries that are the most vulnerable to climate change also have the most limited welfare systems, this could represent a ´win-win’ opportunity.

But adaptation is not just an issue of deciding how best to use finance. It´s an inherently political challenge, and no policy will have lasting effects unless it is appropriated by the national government. So simply trying to bypass governments won´t work. But civil society organisations can have a major role in pushing social protection onto the political agenda. Building links between the adaptation community and civil society organisations campaigning for social protection could be one way of contributing to long-term adaptive capacity development.

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