Ideas & Updates

Improving climate resilience & disaster response through digital payments: Insights from the 2023 HLPF expert roundtable

© ©2023 Better Than Cash Alliance

The Permanent Mission of the Republic of the Philippines to the United Nations, the UN World Food Programme and the UN-based Better Than Cash Alliance co-hosted an expert roundtable during the 2023 UN High-Level Political Forum (HLPF).

The global community is facing an unprecedented convergence of challenges – the impacts of climate change, the ongoing COVID-19 recovery efforts, and the pursuit of the Sustainable Development Goals by 2030. In this intricate context, the Permanent Mission of the Republic of the Philippines to the United Nations, the UN World Food Programme and the UN-based Better Than Cash Alliance, took a proactive approach to explore the potential of digital payments in humanitarian response. They recently co-hosted an expert roundtable during the 2023 UN High-Level Political Forum (HLPF), in New York, to delve into the intersection of digital payments, adaptive social protection, and anticipatory action to build climate resilience.

Phillipines Foreign Affairs Undersecretary Eduardo Jose A. de Vega

“Philippines high exposure to increasing frequency and intensity of natural hazards intensifies our vulnerability and raises our financing needs. From 2011 to 2022, we incurred damages and losses from tropical cyclones amounting to USD$9.03 billion and USD$ 3.5 billion respectively. In the next 50 years, we have a 40% chance of experiencing a loss exceeding around USD$ 18 billion and a 20% chance of experiencing a loss exceeding USD$ 27.5 billion”
Hon. Eduardo Jose A. De Vega, Undersecretary (Vice Minister) of Foreign Affairs, Republic of the Philippines

As climate change accelerates, approximately 3.6 billion lives stand susceptible to harm. This number is poised to increase as global warming jeopardizes essential resources like water and food, thus posing a dire threat to millions of livelihoods. Alarmingly, women and other people with lower incomes bear a disproportionate brunt of climate-related shocks. Over the past decade, a staggering 80% of the 250 million people forcibly displaced by natural disasters in emerging economies were women. These vulnerable groups face barriers in accessing technologies and resources necessary for building resilience in the face of climate change. Moreover, in low-income countries, approximately one in five of the world’s impoverished population remains without the safety nets necessary for survival.

Listen to Leonor Zalabata, Permanent Representative of Colombia to the United Nations

Digital payments as a catalyst for building climate resilience

H.E. Ambassador Mr. Claver Gatete, Permanent Representative of the Republic of Rwanda to the United Nations

“Rwanda has successfully integrated digital payments into daily life, efficiently fulfilling essential needs, streamlining emergency relief processes, and offering immediate assistance during crises like floods. Encouraging continued discourse and dialogue regarding the ways in which digital payments can be leveraged to combat climate change and promote green growth should be a key priority.”
H.E. Ambassador Mr. Claver Gatete, Permanent Representative of the Republic of Rwanda to the United Nations

Amidst these challenges, the role of digital payments emerges as a beacon of hope. Recent experiences showcase that digital financial services are a cornerstone of anticipatory action. By enabling anticipatory financing for billions, digital payments offer scalability, remote coverage, accountability, and timely response mechanisms. Notably, the agility displayed by governments employing digital payments during the COVID-19 pandemic emphasizes their crucial role in crisis response. Digital financial services hold the potential to empower vulnerable businesses, governments, and individuals, particularly women, to adapt more effectively to climate disasters. These services facilitate access to funds before and during emergencies and allow for investment in resilient, climate-friendly assets, livelihoods, and infrastructure. Government payments and humanitarian transfers, often referred to as Government-to-Person (G2P) payments, play a pivotal role in enhancing resilience against climate shocks. Adaptive social protection programs and anticipatory action mechanisms are tailored to address the unique challenges posed by climate emergencies.

Listen to María José del Águila Castillo, Deputy Permanent Representative of Guatemala to the United Nations

Paul Skoczylas is the deputy director of the World Food Programme's U.N. System and Multilateral Engagement Division in New York. Skoczylas spent years in the field with WFP, leading large-scale humanitarian and development projects in Lebanon, the Gaza Strip, and the West Bank.

“The world faces an unprecedented humanitarian challenge, demanding innovation and efficiency, especially in climate crises support. In 2022, WFP provided US$3.3 billion to 56 million people across 72 countries, empowering 65 governments in crafting cash transfer programs. As the leading humanitarian cash provider, we leverage our vast reach, focusing on digital financial inclusion for women, integrating anticipatory actions and insurance into adaptive social protection, and fortifying Government-to-Person systems.”
Mr. Paul Skoczylas, Deputy Director, UN World Food World Food Programme

Immediate actions for climate resilience

The expert roundtable served as a platform for governments, multilateral development organizations, humanitarian agencies, and companies to share insights, challenges, and successes in adopting digital payments for climate-related emergencies. The roundtable was successful in setting new benchmarks for collective action to expand the deployment of digital payments in climate response strategies.

Listen to Alicia Buenrostro, Deputy Permanent Representative of Mexico to the UN

Central to the roundtable’s discussions were key messages and action points:

• Expansion of responsible digital payments: Governments and humanitarian agencies need to expand the utilization of digital payments, building upon the UN Principles for Responsible Digital Payments, in order to enhance climate resilience. Digital financial services, including digital savings, loans, insurance, and payment products, enable vulnerable businesses, governments, and individuals to adapt better to climate shocks by providing access to funds before and during emergencies. Furthermore, they can be utilized to invest in resilient, climate-friendly assets, livelihoods, and infrastructure.

• Enhancing access and connectivity, especially in vulnerable climate-prone regions: Digital financial services have the potential to provide anticipatory financing for billions of people, offering multiple benefits such as scalability, remote coverage, timeliness, improved accountability, corporate partnerships, and integration with government social protection systems. To realize this potential, access and connectivity must be expanded, particularly in areas highly vulnerable to climate shocks.

• Prioritizing women and indigenous communities: Placing women and indigenous communities at the forefront of social protection efforts is non-negotiable. This entails strengthening the gender responsiveness of protection systems and fostering collaboration between gender actors in partnership and coordination efforts.

Edem Wosornu

“In Bangladesh, digital cash transfers were delivered to 200,000 people ahead of peak flooding in 2020. Follow-up monitoring revealed that people who received these transfers were 36 per cent less likely to go a day without eating”‎ ‎‏‏‎ ‎‏‏‏
Ms. Edem Wosornu, OCHA Director of Operations and Advocacy

In the face of climate change, digital payments emerge as a vital tool for building climate resilience and ensuring the well-being of vulnerable communities. The expert roundtable provided a platform to chart a course for immediate action, leading to a Call-to-Action at CoP28.

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