The 21st Century climate challenge

• In Kenya, drought in pastoral areas isself-reinforcing downward spiral can be broken,other inputs, livestock and schooling. 46 areas, insurance premiums are likely to proveor at least weakened, through the transfer of arange of productive inputs, for example:• In Malawi, the subsidized transfer of a‘productive package’ of seeds and fertilizersplayed an important role in facilitatingrecovery from the 2005 drought (box 4.4).associated with the ‘distress sale’ of livestockas animal feed supplies decline—a copingstrategy that pushes livestock prices downjust as food grain prices are rising. Aninnovative government programme hasprovided transport subsidies to traders,• Following a severe drought in the Gaoregion of Mali in 2005–2006, theinternational NGO Oxfam initiateda combined cash and credit workenabling them to move their animals tomarkets outside drought areas, effectivelyputting a floor under prices. 47Insurance-related transfers. Coping withprogramme, acting through local climate risk is an intrinsic part of life, especiallygovernment and community-based for poor rural households. Formal insuranceorganizations. People were employed increating small-scale water conservationstructures, with half their income paid incash and the other half as credit for thepurchase of essential items, such as seeds,markets play a limited role in mitigating thatrisk. The barriers to market development arewell-known. In any functioning insurancemarket, the price of premiums rises with risk.For poor households in high-risk marginalBox 4.3Conditional cash transfers—Brazil’s Bolsa Família ProgrammeConditional cash transfers (CCTs) can play an important role in breakingthe link between risk and vulnerability. By setting minimum guaranteedlevels for income and wider entitlements to health, education andnutrition, CCTs can empower poor people by creating a legal basis fortheir entitlements. Brazil’s Bolsa Família programme (BFP), one of theworld’s largest CCT schemes, demonstrates what is possible.Developed initially to deter child labour during crises, Brazil’sCCT was dramatically scaled up between 2001 and 2003. Theoriginal Bolsa Escola programme (a fi nancial transfer contingenton parents keeping their children in school) was supplemented bythree additional programmes. Bolsa Alimentação was designedas a cash or food transfer to reduce malnutrition among poorhouseholds. Auxilio Gas was a compensatory measure for poorhouseholds following the phasing out of cooking gas subsidies, andFome Zero was introduced in 2003 in order to combat the worstforms of hunger in Brazil. Starting in 2003, efforts to consolidatethese various CCTs into a single umbrella programme—theBFP—intensified.Beneficiaries of the BFP are selected through various targetingmethods, including geographic and household assessments basedon per capita income. In 2006, eligibility requirements were set atmonthly household income levels of Cr$60 (US$28) and Cr$120(US$55) respectively for poor and moderately poor families.As of June 2006, the BFP covered 11.1 million families or about46 million people—a quarter of Brazil’s population and almost allof its poor. Total projected costs are estimated at US$4 billion, or0.5 percent of Brazilian GDP. This is a modest transfer that hasproduced impressive outcomes. Among the results:Source: de Janvry et al. 2006c; Lindert et al. 2007; Vakis 2006.• The programme reaches 100 percent of families living belowthe official poverty threshold of Cr$120 per month; 73 percentof all transfers go to the poorest families and 94 percent reachfamilies living in the bottom two quintiles.• BFP accounts for almost one-quarter of Brazil’s recentprecipitous drop in inequality and 16 percent of its decline inextreme poverty.• BFP is also improving school enrolment rates. Studies havefound that 60 percent of poor children aged 10–15 yearscurrently not in school are expected to enrol in response toBFP and its predecessor. Drop-out rates have been reducedby around 8 percent.• Some of the most pronounced impacts of the BFP have beenon nutrition. The incidence of malnutrition among childrenaged 6–11 months was found to be 60 percent lower in poorhouseholds covered by the nutrition programme.• Administration of the BFP has supported gender empowerment,with women established as beneficiaries with legalentitlements.Each country faces different financial, institutional and politicalconstraints in tackling vulnerability. One of the reasons why theBFP has worked in Brazil is that it has been implemented througha decentralized political system but with strong federal supportin terms of setting rules, building capacity and holding providersto account. The Brazil case, like others cited in this chapter,demonstrates the potential for CCTs not only to reduce vulnerabilitybut to go beyond this, enabling poor people to claim entitlementsthat facilitate human development breakthroughs.4Adapting to the inevitable: national action and international cooperationHUMAN DEVELOPMENT REPORT 2007/2008 181