Cash and Climate: The Potential Role of Cash Transfers in Adaptation to Climate Change

Abstract

It is now evident that the consequences of climate change falls disproportionately upon the poor and vulnerable populations. With increasingly unpredictable and erratic rainfall, droughts, floods, and the consequent crop failures, the lives and livelihoods of low-income groups are in constant and increased threat. The national and local adaptation plans, on one hand, strategically aim to strengthen the livelihoods and resilience of vulnerable households, cash transfers as a part of the national social protection program, on the other hand, are effectively employed for poverty reduction and strengthening the resilience of vulnerable groups. While both embody clear and overlapping objective of reduction of poverty and vulnerability to shocks, they are functioning independently, sans coordination. As social protection mechanisms are increasingly integrated with climate change adaptation and disaster risk reduction in other developing and emerging economies, this article introduces the concept of adaptive social protection and its relevance to the challenges of climate change in the context of Nepal. This policy-relevant paper is based on literature review and secondary sources. Literature gathered and reviewed for this paper include publications derived through online searches using carefully selected keywords. Nepal’s national social protection system is analysed for its potential in managing climate risks, when it is interfaced with the Local Adaption Plan of Actions (LAPA). This article pursues the research question: how can the social protection system be made more shock responsive and adaptive to climate-induced disasters? It concludes with the call for innovative cash-based policy mechanisms that utilise vulnerability mapping of LAPAs, and proactively address poverty, vulnerability and other constraints to human development while being responsive to climate-induced disasters.