Participants in COP27 side event © GIZ/Hannah Fabri

A side event at the COP27 looks at how the Global Shield against Climate Risks may help to close the social protection gap.

Half of the world’s eight billion inhabitants are not covered by basic social protection – and the costs of this yawning gap are becoming ever more apparent as countries, already facing multiple crises, experience more, and increasingly severe, climate-related disasters. 

‘When disaster hits, many countries have to ensure basic social protection for their citizens,’ said Jochen Flasbarth, State Secretary at the German Federal Ministry for Economic Cooperation and Development (BMZ), at a side event entitled ‘No Protection without Social Protection’ at the COP27 in Sharm El-Sheikh on November 12. The session was moderated by Astrid Zwick of InsuResilience. ‘If everyone were under essential social protection, we’d be in another situation altogether.’

If our collective failure to achieve Universal Social Protection is compounding the challenge of responding to climate change, could strengthening social protection be part of the solution? The newly launched Global Shield against Climate Risks bets that it might.

Pre-arranged financial support – and the systems to deliver it

For the most part, the countries which are bearing the brunt of the climate crisis have made negligible contributions to the problem. Given this injustice, discussions about ‘loss and damage’ – payments from highly industrialised countries to those most affected – have been picking up pace and are now officially on the agenda at the COP for the first time.

The Global Shield against Climate Risk is part of this loss and damage debate. Launched at the COP27 on November 14, the initiative is not intended to sidestep the official discussion of loss and damage under the United Nations Framework Convention on Climate Change, explained Secretary Flasbarth. Rather, it is an ‘offer of urgent action’ to provide climate-vulnerable countries with rapid access to financing in the event of disasters. ‘We know the data,’ he said. ‘There is no time to wait.’

The initiative was jointly developed by the G7, under the leadership of Germany during its 2022 Presidency, and the V20 (Vulnerable Twenty) group of nations. The German government is contributing EUR 170 million, via BMZ, to the Global Shield; another EUR 40 million have already been pledged by other nations.

The Global Shield envisions a comprehensive mix of instruments, from insurance-based solutions for individuals (e.g. farmers, property owners and small business owners) to strengthened social protection delivery and payment systems which can rapidly provide support to those who need it in times of crisis. 

Secretary Flasbarth stressed that the need to accelerate efforts to secure social protection for people worldwide goes beyond the Global Shield: ‘I’m happy to have the chance to speak about the Global Shield,’ he said, ‘but it should be discussed under the bigger perspective, which is Universal Social Protection.’

Social protection must be part of the ‘just transition’

‘Social protection is key for communities,’ said Alioune Ndoye, the Minister of Environment, Sustainable Development and Ecological Transition in Senegal, one of the ‘pathfinder countries’ which will benefit from support under the Global Shield.

Minister Ndoye described how 60 per cent of Senegal’s population is concentrated in coastal areas which are under increasing threat from climate change. In addition to droughts and flooding, sea-level rise is exacerbating coastal erosion and leading to the degradation of arable land through salination. All of this has a cascading effect on livelihoods and food security. 

The Senegalese government is working diligently to strengthen the sustainable management of land and improve food security, but these initiatives come at a huge cost. Having just come through the COVID pandemic, where it successfully distributed 43 billion West African CFA francs (EUR 65.5 million) in cash support to households, the government now faces new crises linked to heavy rains and flooding. ‘Countries like Senegal don’t create the climate problems,’ he said. He called for a just transition and sustainable financing solutions that will not lead to greater indebtedness.  

Humanitarian needs are mounting. Social protection is a good investment.

As the climate crisis deepens, the resources available to respond to disasters are not keeping pace with the growing need. ‘Humanitarian crises are rapidly expanding and each appeal is larger and more complex than the one before,’ said Peter Duffy, the Senior Deputy Assistant Administrator with USAID’s Bureau for Africa. ‘This is forcing a lot of hard trade-offs.’ He went on to describe how climate-related catastrophes threaten to unravel hard-won development gains. In trying to balance the legitimate need to address humanitarian requirements with the desire to consolidate and advance development goals, ‘social protection is a good investment.’ 

Mr Duffy explained that the United States government, which backs the Global Shield initiative, has recently identified a major new effort, through USAID, to support innovative investments in adaptive social protection systems. ‘This is an area where we still have a lot to learn,’ he said, ‘but this is why we’re here to learn from others’ experiences.’

Social registries and payment systems are vital for delivering social protection

Hana Brixi, the global director for gender at the World Bank, noted that social protection financing provides a ‘quick win’ for countries responding to climate shocks. Over the past three years, the World Bank has invested USD 24 billion in social protection. According to Ms Brixi, the proportion being directed to climate-responsive social protection is rising rapidly. She drew particular attention to cash transfer programmes which can provide a lifeline for poor and vulnerable households, and how, when the support is paid out to women, it can empower them within their households and communities. 

Hana Brixi stressed the need to invest in social protection delivery systems. This includes social registries, which make it possible to identify beneficiaries quickly and accurately, and payment systems, which allow support to be paid out efficiently. Contingent financing is important, so that when shocks hit it is possible to expand coverage and reach people quickly, but if the systems are not in place the financing alone will not be enough. 

Madagascar: blending humanitarian response and social protection

The final contribution at the event came from Mamy Razakanaivo, the Executive Secretary of Madagascar’s Prevention and Emergency Management Support Unit at the Prime Minister’s Office. He shared the country’s experience in combining humanitarian relief with social protection and resilience-building activities in the face of recurring cyclones and drought exacerbated by climate change. 

Since 2019 the Government of Madagascar has been part of the African Disaster Risk Financing Program (ADRIFI), which is led by the African Development Bank and financed in part by Germany’s KfW Development Bank through a multi-donor trust fund. In 2021 and 2022, Madagascar received 2.1 million and USD 10.7 million, respectively, in compensation for damages caused by devastating cyclones. This financing allowed the government to address people’s immediate needs (e.g. food, nutritional support for young children and pregnant women, water, and medicine) and with the remaining resources to support the construction and rehabilitation of health centers, traditional huts, shelters for disaster victims, and classrooms. The government’s aim is to not only focus on recovery from disasters, but to improve people’s living conditions and to enhance resilience, including through social protection. 

An important step towards closing social protection gaps

By highlighting the importance of social protection in countries’ strategies for responding to climate disasters, the Global Shield against Climate Risks adds to the growing momentum around adaptive social protection. ‘Congratulations to the German G7 Presidency and to the V20 on this initiative,’ said Hana Brixi. ‘The Global Shield can make a significant contribution to closing the protection gap.’ 

November 2022