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CTP: Looking Through an Environmental Lens - Implications and opportunities for Cash Transfer Programming in humanitarian response

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Executive Summary

Few humanitarian donors or practitioners today would contest the relevance of the environment in humanitarian response, or its inherent linkages to disaster, climate and conflict risk and vulnerability. But does this broad consensus translate to humanitarian policy and practice? In this report, the UN Environment/ OCHA Joint Unit, working in partnership with the London School of Economics and Political Science and the Global Shelter Cluster, explores this question in light of the rise in cash-based assistance and the changing landscape of humanitarian modalities. Looking through an environmental lens, the expansion of cash-based responses introduces both new opportunities and additional complexity in the interaction between humanitarianism and the environment. Ultimately, this points to a critical gap in humanitarian practice – in budgets, evaluations, and the Humanitarian Programme Cycle (HPC) itself.

Modality-driven Environmental Effects

A range of transfer modalities are used in humanitarian response today, including cash transfers, in-kind assistance, and modality hybrids with both cash and inkind components. As cash transfer programming (CTP) gains traction as a ‘preferred and default’ humanitarian modality (Agenda for Humanity, 2016a), identifying humanitarian environmental impacts is no longer solely a question of program implementation, but also one of modality selection. In the case of in-kind assistance, in addition to known inefficiencies in aid delivery, negative environmental impacts can emerge through material waste and pollution. On the other hand, while cash- based responses allow beneficiaries to optimise consumption and boost their local economy, if markets and supply chains are unsustainable, they can precipitate environmental stress that compromises future resilience. Though neither cash nor in-kind assistance is inherently ‘environment neutral’, some of the programmatic benefits associated with cash, often working in concert with its higher operational scrutiny, create four unique opportunities to address environmental challenges:

  1. Cash increases efficiency. In practice, an increase in the efficiency of aid delivery could translate to more space in budgets and programmes to integrate environmental assessments and safeguards. This is particularly salient in the context of budgeting, as one of the most commonly cited challenges with integrating the environment in humanitarian response relates to a perceived financial burden (Brook and Kelly, 2015).

  2. Cash changes narratives around monitoring and impact. Feasibility assessments and concerns around market viability tend to refocus monitoring systems on outcomes and impact. While this creates an 3 opportunity to mainstream environment, currently cash tends to skew in favour of economic benchmarks that notoriously overlook the environmental externalities of market-based solutions.

  3. Cash facilitates behaviour change. Although the trade off for greater beneficiary choice is a loss of practitioner control, employing conditions and restrictions on the transfer allows practitioners to guide or constrain those choices (ODI, 2015). When designed with environmental considerations in mind, these instruments can improve environmental protection instead of compromising it, and even facilitate community ownership over their environment and recovery, confirming the transformative power of cashbased programming (WHS, 2016b).

  4. ‘Cash for work’ is a tool to address environmental impacts. Another way CTP can facilitate beneficiary ownership over recovery is through cash for work programmes. Extending this concept to include the environment, these programmes could engage beneficiaries in work that addresses the environmental effects of disasters or conflicts and socialise community environmental management. Collectively, these opportunities demonstrate not only the unique ways CTP interacts with the environment, but also the systemic barriers that explain why those opportunities are often missed. In practice, environmental protection is often regarded as a secondary consideration in humanitarian response – one that must give way to issues of operational feasibility and the humanitarian mandate to save lives (JEU, 2014). However, these objectives are not mutually exclusive. On the contrary, there is considerable evidence to suggest that life-saving and the environment are often linked (ibid.). In such cases, neglecting the environment violates mandates to ‘do no harm’ (Brook and Kelly, 2015) and ‘build back better’ (Lyons et al., 2010). While CTP itself is not a solution to this problem, the questions it raises provide a platform to address the barriers to environmental mainstreaming in humanitarian response.
    Maximising Opportunities, Managing Implications: a Diagnostic Approach

In practice, regardless of the modality in question, environmental opportunities and implications associated with humanitarian action call for some nuance.
Variations in context, markets, and issues of protection will shape the scale of environmental risk (Levine and Bailey, 2015). However, the inherent linkages between the environment and these three criteria, which figure prominently in modality selection, indicates a path to embed environmental evaluation in current humanitarian practice.

This process of embedding or ‘mainstreaming’ environment in modality selection can be conceptualised as a diagnostic process (see figure A), one where the underlying differences between a project that anticipates and mitigates environmental threats and one that does not are observed at the programme input level. Motivated under the Grand Bargain commitment to make cash the ‘default’ humanitarian modality (Agenda for Humanity, 2016a), the diagnostic flows toward CTP when feasible. In cases where an input fails a minimum test for viability, the diagnostic reverts to inkind or hybrid approaches. Viability, in this case, is evaluated against a checklist corresponding to the three core criteria of context, markets and protection.

Beginning with context, questions around the scale of need, capacities, access, beneficiary preferences and local policy frameworks are joined with an assessment of environmental damage, risks and vulnerability. These input characteristics then inform market assessments that are currently standard in humanitarian cash practice. In the final stage, the market assessment is augmented with questions on sustainability and protection – both for the beneficiary and the physical environment.

While this diagnostic serves as a broad starting point, functionally, these three criteria are not the only dimensions that will shape environmental risk – it will vary across sectors as well. For this reason, humanitarian clusters and cash working groups have a vital role to play in refining the diagnostic, by providing practical guidance for sector specialists. In the case of humanitarian shelter, for example, applying the the diagnostic framework reveals sector-specific environmental risks, such as deforestation or soil erosion, that will often move humanitarian programming towards modality hybrids – where some programme inputs are suitable for cash, and others are not. This is 5 particularly notable, as it runs counter to the current industry trend, which leans toward unrestricted, multipurpose cash based largely on evidence from the food security sector (Bessant, 2015). With this in mind, integrating environment in modality selection creates space for differentiation of best practices in CTP across sectors.

UN Office for the Coordination of Humanitarian Affairs
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