How Can Digital Payments Improve Climate Resilience and Disaster Response?
Lisa Dale (second from the right) alongside other panelists at the United Nations roundtable event. Photo: Better Than Cash Alliance
On July 12, Lisa Dale, co-director of the MA program in Climate and Society and lecturer in Climate, Earth and Society, joined a panel of researchers, government officials, and humanitarians at the United Nations. The side event, called Improving Climate Resilience and Disaster Response through Digital Payments, was part of the 2023 United Nations High-Level Political Forum (HLPF). This roundtable discussion was organized by the Permanent Mission of the Republic of the Philippines to the United Nations, the UN World Food Programme, and the UN Better Than Cash Alliance.
The conversation centered on the role of digital payments in humanitarian response, bringing together governments, multilateral development organizations, humanitarian agencies and companies to understand the challenges and successes in the uptake of digital payments in climate-related emergencies. The speakers included government representatives from the Republic of the Philippines and Bangladesh, ambassadors to the United Nations from Colombia, the Republic of Rwanda, the Federal Democratic Republic of Ethiopia, Guatemala, and Mexico, and organizational representatives from the UN World Food Program, UN Office for the Coordination of Humanitarian Affairs, Mercy Corps, the United Nations Better Than Cash Alliance, and the UPS Foundation. The panel complemented the 2023 HLPF’s broader focus on the implementation of the 2030 Agenda for Sustainable Development.
Panelists discuss opportunities to expand digital payment infrastructure during the roundtable event. Photo: Better Than Cash Alliance
In the Q&A below, Dale shares her reflections and observations from the panel discussion.
What are the risks from climate change and how can mobile payments play a role in reducing these risks?
Risk from climate change is comprised of three parts: hazard, exposure and vulnerability. Mobile payments have been shown to meaningfully address the vulnerability piece; they can disrupt the inter-generational cycle of poverty and build adaptive capacity, thereby reducing overall risk. Mobile payments can help to streamline financial exchanges, improving efficiency and contributing to sustainable development.
What are nationally determined contributions and how can they be used in climate change mitigation and adaptation?
A nationally determined contribution, or NDC, is what every country has developed as part of the 2015 Paris Agreement. It consists of a nationally-specific climate action plan to cut emissions and adapt to climate impacts. Each NDC includes both mitigation and adaptation components, but for most fragile states, adaptation is much more critical. This is because of the unequal role in historical emissions, meaning many of the lower-income countries now struggling to respond to impacts from climate change did not themselves emit most of the greenhouse gasses that have led us here. This is a foundational pattern to address for climate justice.
Lisa Dale shares insight from her research on sustainable development in Rwanda. Photo: Better Than Cash Alliance
From your research on sustainable development in Rwanda, what have you seen from mobile money programs?
The case of Rwanda is instructive. The country has a very robust form of mobile money, called MoMo, and this system has permeated all layers of society, including remote rural areas. Researchers have highlighted the many ways in which MoMo has benefited the country. For example. the World Bank recently reported on Rwanda’s award-winning social protection scheme, ubudehe, which categorizes households according to wealth and livelihood. Those categories then determine eligibility for various forms of social protection through financial support from the government. Coverage under the ubudehe system increased from 67 percent to 92 percent of eligible households with the advent of mobile money. In other words, digital payments helped the government better reach the households most in need of support. These payments contribute to reductions in national poverty levels, reflected in declining vulnerability and stronger adaptive capacity at the household level.
In my own research on crop insurance and resettlement policies in Rwanda, I have seen the way mobile money unlocks innovation. For example, farmers’ cooperatives are eligible for insurance through the National Agricultural Insurance Scheme, and mobile payments make it possible for them to receive payouts very quickly following crop failure. This very direct process then contributes to improved financial literacy for the members of the cooperative, a critical step for scaling up the tool. It also creates avenues for accessing credit for participating farmers and increases their ability to purchase inputs. Research has shown that an increased use of inputs, such as fertilizers and improved seeds, leads to higher yields and better food security.