Advertisement

Remittances for Adaptation: An ‘Alternative Source’ of International Climate Finance?

  • Barbara BendandiEmail author
  • Pieter Pauw
Chapter
Part of the Global Migration Issues book series (IOMS, volume 6)

Abstract

Climate finance is a key issue at the UN climate negotiations, but explicit international funding possibilities for adaptation in developing countries remain limited. According to the recent Paris Agreement, climate finance will come from a ‘wide variety of sources, instruments and channels’. To the extent that these are understood, they do not seem to generate the USD 100 billion per annum that was repeatedly pledged by developed countries, and they flow to mitigation rather than adaptation. Remittances have potential to finance adaptation, because (1) the potential is huge and unexplored); (2) remittances directly reach to households, including in remote and vulnerable areas; (3) remittances are often employed for (climate-induced) disaster relief and sometimes also for investments in long-term adaptation strategies.

Whilst not ignoring ethical arguments against poor migrants’ remittances as an alternative source of adaptation finance for developing countries under the UN climate negotiations, this chapter examines whether remittances could technically constitute such a source. It analyses empirical evidence from remittance literature against ten climate finance criteria from the UNFCCC Copenhagen Accord. Our analysis finds that remittances could match criteria such as ‘adequacy’ and ‘predictability’. However, ‘improved access’ can only be matched if developed and developing countries create the right incentives to reach out to potential diaspora investors. ‘Transparency’ is unlikely to be met. Whether remittances contribute to the USD 100 billion climate finance pledge is a controversial political decision, but in any case remittances can support adaptation at household and community level. Public climate finance could increase the potential of remittance for such purposes.

Keywords

Remittances Climate finance Adaptation UNFCCC 

Notes

Acknowledgement

The authors express their gratitude to the editors for providing the opportunity to prepare this chapter. The authors would also like to thank the participants and organizers of the COST workshop in Bonn (February 2014) for their comments and suggestions on the concept. Any remaining shortcomings and flaws are solely the responsibility of the authors. Research funding by the German Federal Ministry for Economic Cooperation and Development (BMZ) is gratefully acknowledged

References

  1. AAA – Accra Agenda for Action. (2008). Accra agenda for action. In 3rd high level forum on aid effectiveness, Accra.Google Scholar
  2. Acharya, S. R. (2003). Official Development Assistance (ODA) in transport sector: Challenges and opportunities. Eastern Asia Society for Transportation Studies, 4, 1572–1586.Google Scholar
  3. ActionAid. (2007). Equitable adaptation finance: The case for an enhanced funding mechanism under the UN framework convention on climate change. Johannesburg: ActionAid International.Google Scholar
  4. Adams Jr., R. H., Cuecuecha, A., & Page, J. (2008). The impact of remittances on poverty and inequality in Ghana. World Bank Policy Research Working Paper Series, vol. (2008).Google Scholar
  5. Agarwal, R., & Horowitz, A. W. (2002). Are international remittances altruism or insurance? Evidence from Guyana using multiple-migrant households. World Development, 30, 2033–2044.CrossRefGoogle Scholar
  6. AGF. (2010). Report of the secretary-general’s high-level advisory group on climate change financing. New York: United Nations.Google Scholar
  7. AMCEN. (2011). Addressing climate change challenges in Africa; a practical guide towards sustainable development. Nairobi: AMCEN secretariat.Google Scholar
  8. Aparicio, F. J., & Meseguer, C. (2012). Collective remittances and the state: The 3 × 1 program in Mexican municipalities. World Development, 40(1), 206–222.CrossRefGoogle Scholar
  9. Ayers, J. (2011). Resolving the adaptation paradox. Global Environment Politics, 11(1), 62–88.CrossRefGoogle Scholar
  10. Bettin, G., Lucchetti, R., & Zazzaro, A. (2012). Financial development and remittances: Microeconometric evidence. Economics Letters, 115, 184–186.CrossRefGoogle Scholar
  11. Biller, S. (2007). UICIFD Briefing No. 3: Remittances – Iowa City: University of Iowa Center for International.Google Scholar
  12. Black, R. (2003). Soaring remittances raise new issues. Migration policy institute. http://www.migrationpolicy.org/article/soaring-remittances-raise-new-issues. Accessed 3 Mar 2016.
  13. Blue, S. A. (2004). State policy, economic crisis, gender, and family ties. Determinants of family remittance to Cuba. Economic Geography, 80(1), 63–82.CrossRefGoogle Scholar
  14. Brown, J., Bird, N., & Schalatek, L. (2010). Climate finance additionality: Emerging definitions and their implications (Policy Brief 2). Heinrich BöllStiftung and ODI.Google Scholar
  15. Brown, J., & Jacobs, M. (2011, April). Overseas development institute, leveraging private investment: The role of public sector climate finance. At http://www.odi.org.uk/resources/download/5701.pdf
  16. Buchner, B., Falconer, A., Hervé-Mignucci, M., Trabacchi, C., & Brinkman, M. (2011). The landscape of climate finance. Venice: Climate Policy Initiative.Google Scholar
  17. Buchner, B., Falconer, A., Herve´-Mignucci, M., & Trabacchi, C. (2012). The landscape of climate finance 2012. Venice, Italy. Retrieved from http://climatepolicyinitiative.org/wpcontent/uploads/2012/12/The-Landscape-of- ClimateFinance-2012.pdf
  18. Buchner, B., Herve-Mignucci, M., Trabacchi, C., Wilkinson, J., Stadelmann, M., Boyd, R., Mazza, F., Falconer, A., & Micale, V. (2013). The global landscape of climate finance 2013. CPI. Venice, Climate Policy Initiative.Google Scholar
  19. Chaum, M., Faris, C., Wagner, G., & Brown, J. (2011). Improving the effectiveness of climate finance: Key lessons.Google Scholar
  20. CheSuh-Njwi, A. (2015, August 31). The ‘Bush Faller’, Akatarian, Bouger’: What is the Difference between a migrant and a diaspora? The African Bulletin.Google Scholar
  21. Christiansen, L., Ray, A. D., Smith, J. B., & Haites, E. (2012). Accessing international funding for climate change adaptation. Roskilde: UNEP Risø Centre on Energy, Climate and Sustainable Development.Google Scholar
  22. Climate Finance Update. (2014). http://www.climatefundsupdate.org/data. Accessed 3 Mar 2016.
  23. Combes, J. L., & Ebeke, C. (2011). Do remittances dampen the effect of natural disasters on output growth volatility in developing countries? CERDI, Etudes et Documents, E 2010.31.Google Scholar
  24. Connor, P., Cohn, D., & Gonzalez-Barrerra, A. (2013). Changing patterns of global migration and remittances – PEW Research Center 2013. Washington, DC. Retrieved from www.pewresearch.org. Accessed 3 Mar 2016.
  25. David, A. (2010). How do international financial flows to developing countries respond to natural disasters? (IMF Working Papers 10/166). International Monetary Fund.Google Scholar
  26. De Haas, H. (2007). Remittances, migration and social development: A conceptual review of the literature (Programme on Social Policy and Development, Paper No. 34). Geneva: UNRISD.Google Scholar
  27. De Haas, H., & Plug, R. (2006). Cherishing the goose with the golden eggs: Trends in migrant remittances from Europe to Morocco 1970–2004. International Migration Review, 40(3), 603–634.CrossRefGoogle Scholar
  28. Deshingkar, P. (2011). Are there examples of remittances being used to build local resilience to environmental change, especially through investment in soil and water conservation or broader agriculture? UK Foresight, SR13.Google Scholar
  29. Ebeke, C., & Combes, J.-L. (2013). Do remittances dampen the effect of natural disasters on output growth volatility in developing countries? Applied Economics, 45(16), 2241–2254.CrossRefGoogle Scholar
  30. El-Qorchi, M., Maimbo, S., & Wilson, J. (2003). Informal funds transfer systems: An analysis of the informal Hawala system (Occasional Paper, Vol. 222). Washington, DC: International Monetary Fund.CrossRefGoogle Scholar
  31. Flåm, K. H., & Skjærseth, J. B. (2009). Does adequate financing exist for adaptation in developing countries? Climate Policy, 9(1), 109–114.CrossRefGoogle Scholar
  32. Frankel, J. (2011). Are bilateral remittances countercyclical? Open Economies Review, 22(1), 1–16.CrossRefGoogle Scholar
  33. Giuliano, P., & Ruiz-Arranz, M. (2009). Remittances, financial development and growth. Journal of Development Economics, 90(1), 144–152.CrossRefGoogle Scholar
  34. Horstmann, B., & Chardani, A. (2011). The adaptation fund of the Kyoto Protocol: A model for financing adaptation to climate change? Climate Law, 2(3), 1–23.Google Scholar
  35. International Organization for Migration. (2009). IOM and remittances. http://publications.iom.int/bookstore/free/iom_and_remittances.pdf. Accessed on Feb 2016.
  36. Kato, T., Ellis, J., Pauw, P., & Caruso, R. (2014). Scaling up and replicating effective climate finance interventions. In Climate Change Expert Group Paper No 2014(1). Paris: OECD and IEA.Google Scholar
  37. Kebbeh, O. (2012). Declining ODA, resilient remittances. World Bank’s blog http://blogs.worldbank.org/peoplemove/declining-oda-resilient-remittances. Accessed on Feb 2016.
  38. Klein, R. (2010). Linking adaptation and development finance: A policy dilemma not addressed in Copenhagen. Climate and Development, 2, 203–206.CrossRefGoogle Scholar
  39. Lucas, R., & Stark, O. (1985). Motivations to remit: Evidence from Botswana. Journal of Political Economy, 93(5), 901–918.CrossRefGoogle Scholar
  40. Mohapatra, S., Joseph, G., & Ratha, D. (2012). Remittances and natural disasters: Ex-post response and contribution to ex-ante preparedness. Environment, Development and Sustainability, 14(3), 365–387.CrossRefGoogle Scholar
  41. Müller, B. (2008). International adaptation finance: The need for an innovative and strategic approach. Oxford Institute for Energy Studies. Google Scholar
  42. Organization for Economic Cooperation and Development (OECD) (2014). Aid to developing countries rebounds in 2013 to reach an all-time high. Web release 08/04/2014, OECD website.Google Scholar
  43. Panizzon, M. (2008). Labour mobility: A win-win-win model for trade and development. The case of Senegal. Geneva Trade and Development Forum.Google Scholar
  44. Pauw, W. P. (2014). Not a panacea: Private-sector engagement in adaptation and adaptation finance in developing countries. Climate Policy, 15(5), 583–603.CrossRefGoogle Scholar
  45. Pauw, W. P., & Pegels, A. (2013). Private sector engagement in climate change adaptation in the least developed countries: An exploration. Climate and Development, 5(4), 257–267.CrossRefGoogle Scholar
  46. Pauw, W. P., Klein, R. J. T., Vellinga, P., & Biermann, F. (2015). Private finance for adaptation: Do private realities meet public ambitions? Climatic Change, 134(4), 489–503.CrossRefGoogle Scholar
  47. Ratha, D. (2003). Workers’ remittances: An important and stable source of external development finance. Global development finance 2003 – striving for stability in development finance Ch. 7 (pp. 157–175). Washington, DC: World Bank.Google Scholar
  48. Scheffran, J., Marmer, E., & Sow, P. (2012). Migration as a contribution to resilience and innovation in climate adaptation: Social networks and co-development in northwest Africa. Applied Geography, 33, 119–127.CrossRefGoogle Scholar
  49. Straubhaar, T., & Vadean, F. (2006). International migrant remittances and their role in development. In OECD: International Migration Outlook: SOPEMI 2006. Paris: OECD.Google Scholar
  50. Terpstra, P. (2013). Is adaptation short-changed? The imbalance in climate finance commitments. WRI Blog, 13.11.2013. http://www.wri.org/blog/adaptation-short-changed-imbalance-climate-finance-commitments. Accessed 3 Mar 2016.
  51. The United Nations Framework Convention on Climate Change (UNFCCC). (2009). Copenhagen Climate Accord. http://unfccc.int/resource/docs/2009/cop15/eng/l07.pdf. Accessed 3 Mar 2016.
  52. The United Nations Framework Convention on Climate Change (UNFCCC). (2010). Report of the conference of the parties on its sixteenth session, held in Cancun from 29 November to 10 December 2010. Bonn: UNFCCC.Google Scholar
  53. United Nations Environment Programme (UNEP). (2014). The adaptation gap report 2014. Nairobi: United Nations Environment Programme (UNEP).Google Scholar
  54. van Drunen, M., Bouwer, L., Dellink, R., Gupta, J., Massey, E., & Pauw, P. (2009). Financing adaptation in developing countries: Assessing new mechanisms. In Climate Change Scientific Assessment and Policy Analysis (NRP-CCWAB). Bilthoven: PBL.Google Scholar
  55. World Bank. (2013). Developing countries to receive over $410 billion in remittances in 2013. Press release, 2 Oct 2013: http://www.worldbank.org/en/news/press-release/2013/10/02/developing-countries-remittances-2013-world-bank. Accessed 3 Mar 2016.
  56. World Bank. (2014a). Remittances to developing countries to stay robust this year, despite increased deportations of migrant workers. Press release, 11 April 2014 http://www.worldbank.org/en/news/press-release/2014/04/11/remittances-developing-countries-deportations-migrant-workers-wb. Accessed 3 Mar 2016.
  57. World Bank. (2014b). Migration and remittances: Recent development and outlook (Migration and Development Brief 22).Google Scholar
  58. World Bank. (2005). Global development finance 2005. Washington, DC: World Bank.Google Scholar
  59. Yang, D. (2008). Coping with disaster: The impact of hurricanes on international financial flows, 1970–2002. The B.E. Journal of Economic Analysis & Policy, 8(1 (Advances)), Article 13.Google Scholar

Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  1. 1.Ca’ Foscari UniversityVeniceItaly
  2. 2.Policy Officer. United Nations Convention to Combat Desertification (UNCCD)VeniceItaly
  3. 3.German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE)BonnGermany
  4. 4.Utrecht UniversityUtrechtNetherlands
  5. 5.Stockholm Environment InstituteStockholmSweden

Personalised recommendations