Policy Instrument:
Definition
Environmentally Conditioned Cash Transfers (ECCTs) provide poor and vulnerable population groups with environmental incentive payments conditioned on the uptake and successful implementation of sustainable environmental and agro-ecological practices, for example climate-smart soil management, sustainable agroforestry, sustainable fisheries management and the protection of local agrobiodiversity.
In some contexts, ECCTs are very similar in practice to Payments for Ecosystem Services (PES). Where PES schemes explicitly target poor and vulnerable individuals and pursue explicit social outcomes (e.g., poverty reduction and food security), they can be considered a form of ECCT, especially where there are formal links with social protection systems.
Rationale
ECCTs contribute to both poverty-alleviation and environmental goals, including direct contributions to more equitable and inclusive climate adaptation, mitigation and just transitions when done at scale.
Key features
Target populations can be identified through existing social registries and other relevant data sources (e.g. farmers registries, environmental and climate vulnerability indexes), and payments combined with regular conditional or unconditional cash transfers to harness synergies with the social protection system and maximise social, environmental and climate outcomes.
Complementary services are provided to beneficiaries to support the uptake of context-specific and sustainable environmental, agro-ecological and climate-smart practices while promoting economic inclusion, through gender-responsive livelihood interventions, skills training, behavior change interventions, asset transfers, supply-chain linkages (including with local markets) and other related methods.
The combination of cash income and incentives with complementary support and tailored technical assistance helps to address liquidity and credit constraints as well as risk aversion in relation to the adoption of new environmental and agro-ecological practices, including both on-farm and off-farm livelihood strategies.
Incorporating climate-smart environmental and agricultural practices and technology builds adaptive capacity, strengthens household and community resilience and contributes to sustainable ecosystem regeneration and more inclusive and equitable climate action (adaptation, mitigation and just transitions).
When ECCTs include complementary services and create opportunities for women to participate in programme design, delivery and local support networks, they can strengthen women’s agency and voice, while helping shift unequal gender norms and roles.
Extreme poor, poor and households vulnerable to environmental and/or climate risks, small-scale farmers, small-scale fisheries workers, Indigenous Peoples, youth.
In order to design and implement effective ECCTs that meet the social and environmental objectives set out above there are several factors that need to be taken into account. In relation to poverty alleviation outcomes, it is essential to:
- Ensure the reliability, adequacy and regularity of cash transfers;
- Establish linkages with social registries and farmer registries to ensure vulnerable population groups are incorporated;
- Avoid short-term projectized approach and support long-term system-strengthening objectives and cross-sectoral linkages between social protection, agricultural, environment and climate sectors;
- Incorporate specific targets for relevant population groups in both cash transfers and complementary services (Indigenous Peoples, people with disabilities, youth, migrants);
- Ensure gender-responsive or gender-transformative goals are fully incorporated from initial design stage;
- Align or integrate with shock-responsive social protection system and anticipatory action;
In relation to the environmental outcomes, it is essential to:
- Provide adequate technical assistance and other support to beneficiaries to ensure successful uptake of environmental and agro-ecological practices;
- Foster sustainable productive systems that maintain or exceed the yields or sales of conventional systems within the project’s timeframe;
- Establish robust and timely measurement of environmental outcomes to underpin conditional payments;
- Integrate approach into climate strategies (e.g. Nationally Determined Contributions, National Adaptation Plans) to promote a more resilient, inclusive and equitable approach to climate action (adaptation, mitigation and just transitions).
SDG 5 - Gender equality
- Target 5.5 - Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.
SDG 10 - Reduced inequalities
- Target 10.1 - By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average.
SDG 12 -Responsible consumption and production
- Target 12.1 - Implement the 10-Year Framework of Programmes on Sustainable Consumption and Production Patterns, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries
- Target 12.2 - By 2030, achieve the sustainable management and efficient use of natural resources
SDG 13 - Climate action
- Target 13.2 - Integrate climate change measures into national policies, strategies and planning
SDG 14 - Life below water
- Target 14.4 - By 2020, effectively regulate harvesting and end overfishing, illegal, unreported and unregulated fishing and destructive fishing practices and implement science-based management plans, in order to restore fish stocks in the shortest time feasible, at least to levels that can produce maximum sustainable yield as determined by their biological characteristics
SDG 15 - Life on land
- Target 15.2 - By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally
- Universal Declaration of Human Rights
- International Covenant on Economic, Social and Cultural Rights (ICESCR)
- ILO Convention 102 (minimum standards of social security)
- ILO recommendation 202 (social protection floors)
- The Paris Agreement
- Kunming-Montreal Global Biodiversity Framework (goal number 10: Enhance Biodiversity and Sustainability in Agriculture, Aquaculture, Fisheries, and Forestry.)