Cash

Cash Transfer Programming (CTP) is increasingly used for humanitarian response with the recognition that CTP can not only greatly complement the provision of in-kind assistance during emergencies but also empowers affected populations to decide their own priority needs and how best to meet these using available local resources.

From an environmental perspective, the use of CTP introduces both new opportunities and additional complexity in the interaction between humanitarian relief and environmental impacts. Negative environmental impacts may emerge when markets and local supply chains are unregulated and unsustainable or when the type of goods and services procured inadvertently increase climate vulnerability or disaster risk. It should be noted that neither cash nor in-kind assistance is inherently ‘environment neutral’. Complementary programming such as the inclusion of education or provision of basic information for awareness raising in CTP can help to increase environmental awareness.  At the same time, CTP may create opportunities for addressing environmental challenges:

• CTP provides beneficiaries with greater choice, ownership and dignity over their own recovery and the recovery of their local environment, and may bring increased focus on long-term resilience and sustainability
• Conditional and restricted cash transfers provide practitioners an opportunity to positively shape beneficiary behaviour, orienting towards sustainable, certified and durable materials that ‘do no harm’ to both the local environment as well as their lives and livelihoods.
• When CTP is combined with capacity building and technical assistance, sensitizing the response and reconstruction to environmental factors supports efforts to ‘build back better’, linking future preparedness and recovery to environmental management and resilience
• CTP can increase efficiency, and could translate to more space in budgets and programmes to integrate environmental assessments and safeguards
• CTP can be used for environmental programmes such as reconstruction of shelters or natural resource rehabilitation (note that technical expertise must be included in the activities and national laws and safety standards respected)
• Engaging in local markets might allow for the promotion for more environmentally soud options. Examples include the provision of subsidized fuel efficient stoves or alternative fuel briquettes to incentivize the implementation of environmental sensitive approaches

However, unconditional, unrestricted or multipurpose cash grants can also increase environmental risk. Shelters may be constructed regardless of environmental conditions, and in a manner which increases vulnerability to disasters such as storms and floods. Sourcing local materials may compromise fragile environmental conditions (for example by overusing wood and sand), and create harm in the long-run. If the amount of cash transferred is insufficient, beneficiaries may choose materials which are less environmentally sustainable, unhealthy and/or of lower quality. Strong regulatory policies are key to ensure that the materials sourced are sustainable and of high quality.

Current criteria for CTP modality selection broadly fall in three themes: context, markets and protection. While there are no standardised metrics tying these criteria to the environment, clear linkages across the themes highlight opportunities for mainstreaming environment in cash programmes:

Context: local environmental conditions impact the feasibility of CTP where the scale of beneficiary need and the availability and sustainability of local natural resources should be taken into account.

Markets: Markets define the viability of local supply chains to support cash-based responses. Where markets function effectively and regulation exists and is enforced, the environmental burden of local demand for materials are easier to manage. However, sustainability of inputs remains a concern, as environmental impacts may be displaced to the broader region. Where local markets are limited, sourcing of materials may put strain on immediate area resources.

Protection: in the context of modality selection, protection broadly refers to a mandate to ‘do no harm’, which extends to the physical environment. Lower quality materials or poor construction techniques undermines sustainability and community resilience. More actively, ‘building back better’ for the environment suggests opportunities to improve community environmental management by mainstreaming environment in technical assistance. The article on the protection cluster provides further guidance on the relation between protection and the environment.

Suggested steps for addressing environment in CTP:

• Integrate environmental considerations in existing assessments, including market and supply chain analysis.
• Apply restrictions and conditions as needed to shape beneficiary behaviour and limit environmental impacts. Consult with communities to properly understand the available options.
• Strengthen technical assistance in cash-based and hybrid programmes to build capacity for environmental management and sustainable recovery.
• Consider the use of cash for work schemes to address direct and secondary environmental impacts in a manner that facilitates community-based environmental protection. Make sure the appropriate technical expertise is included in programme design and delivery.
• Incorporate environmental indicators into monitoring systems, adapting modalities based on evolving conditions.
• Evaluate environmental impacts of CTP as part of humanitarian response evaluations.
• For donors: Include environmental safeguards and evaluation as a contractual requirement for implementing partners using CTF, from modality selection through implementation.