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

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.

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.

Digital payments as a catalyst for building climate resilience

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.

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.

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.

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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