In Practice Pathways to Climate-Resilient Economic Inclusion A Framework for Integrating Climate Action in Economic Inclusion Programs By Cecilia Costella, Timothy Clay, Manann Donoghoe, and Liz Giron 9 © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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Cover photo: Flore de Preneuf / World Bank Volume 9 October 30, 2023 In Practice The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion Contents Acknowledgments iv About the In Practice series v Abbreviations vi Glossary vii Interactive Table of Contents Introduction 10 Click to navigate Climate Change, Poverty, and the Paradigm Shift toward Climate-Resilient Economic Inclusion 12 The Climate-Poverty Nexus 12 The New Focus on Climate-Resilient Development 13 Economic Inclusion as an Enabler for Climate-Resilient Economic Inclusion 15 Pathways to Climate-Resilient Economic Inclusion 17 Principles 17 Program Areas 19 Outcomes 19 A Snapshot of Climate-Resilient Economic Inclusion Financed by the World Bank 22 World Bank Project Examples by Climate-Resilient Economic Inclusion Program Areas 23 The Way Forward: Recommendations for Policymakers and Practitioners 28 Appendix Selected World Bank Climate-Resilient Economic Inclusion Programs 31 Notes 33 References 35 Figures 1 | Impacts of climate change on the number of people living in extreme poverty by 2030 10 2 | The nexus between climate change and poverty 12 3 | Pathways to climate-resilient economic inclusion 17 4 | World Bank-supported climate-related economic inclusion programs and climate vulnerability by country 22 Tables A1 | Selected World Bank-financed projects 31 Boxes and Spotlights Box 1 | The Paris Agreement and its implications for World Bank- financed projects 14 Box 2 | What is climate-resilient development? 14 Spotlight 1 | The gender bias of climate change 16 Spotlight 2 | Addressing poverty and the impacts of climate change in the Republic of Congo through a ‘climate-purposed’ project 20 The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion Acknowledgements This note was written under the guidance of Colin Andrews and Victoria Strokova, Program Managers of the Partnership for Economic Inclusion (PEI). It benefited from invaluable inputs from Puja Dutta (World Bank). The authors are grateful for the guidance and direction provided by members of the PEI Advisory Council: Benjamin Davis (Food and Agriculture Organization), Bill Abrams (Leadership Collaborative), Carolina Trivelli (Institute of Peruvian Studies), Frank De Giovanni (independent), Marvi Memon (Former Federal Minister of Pakistan), Nathanial Goldberg (Innovations for Poverty Action), Reema Nanavaty (Self-Employed Women’s Association), and Rita Larok (AVSI Foundation). They also appreciate the feedback they received from the PEI team, especially Janet Heisey, Inés Arévalo Sánchez, Hugo Brousset, Sarang Chaudhary, Sadna Samaranayake, and Claudia Santamaria Ruiz. The note benefited from rich discussions and consultations with Alejandra Campero Peredo, Asha Williams, Ayuba Sani Hussein, Briana N. Wilson, Christian Bodewig, Edmundo Murrugarra, Elizabeth N. Ruppert Bulmer, Emily Weedon, Erina Iwami, Jamele Rigolini, Loli Arribas-Banos, Luz Stella Rodriguez, Martha Sanchez, Nahla Zeitoun, Nancy Rocio Banegas Raudales, Nian Sadiq, Penny Williams, Samik Adhikari, Tracy Hart, Ulrike Lehr, and Yuko Okamura (World Bank); Atef Elshabrawy (Egypt, Advisor to the Minister of Social Development); Jenny Swatton (Concern Worldwide); and Samkelo Cityite and Susanne Lein (Gesellschaft für Internationale Zusammenarbeit [GIZ]). The team wishes to express gratitude to the key peer reviewers who provided valuable guidance: Stefan Beierl (GIZ), Wendy Chamberlin (Busara), and Alexander Jaeger (World Bank). The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion iv About the In Practice Series The Partnership for Economic Inclusion introduces the In Practice series featuring accessible, practitioner-focused publications that highlight learning, good practice, and emerging innovations for scaling up economic inclusion programs. Guide to navigation The In Practice series is interactive and provides built-in technical features to assist readers as they progress, including a navigation bar, progress bar, and the ability to jump to endnotes and back to the text throughout. Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Chapter navigation Progress bar Jump notes1 The navigation bar at the The progress bar tracks your 1. Notes throughout the text are linked top of each page allows easy progress through each chapter to allow easy navigation between navigation with a simple click. and throughout the document. endnotes and the main text. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion v Abbreviations AFD French Development Agency (Agence Française de Développement) ASP Adaptive Social Protection BMZ Federal Ministry of Economic Cooperation and Development (Bun-desministerium für wirtschaftliche Zusammenarbeit und Entwick-lung) CRD Climate-Resilient Development CREI Climate-Resilient Economic Inclusion CSAIP Climate Smart Agriculture Investment Plan EI Economic Inclusion FAO Food and Agriculture Organization GIZ Gesellschaft für Internationale Zusammenarbeit GRID Green, Resilient, and Inclusive Development INCOPESCA Costa Rican Fishing and Aquaculture Institute (Instituto Costarricense de Pesca y Acuicultura) IPCC Intergovernmental Panel on Climate Change LIPW Labor-Intensive Public Works MAFS Ministry of Agriculture and Food Security MGCSW Ministry of Gender, Child, and Social Welfare NGO Nongovernmental Organization PARSA Emergency Resilient Agriculture for Food Security Project (Projet d’agriculture résiliente pour la sécurité alimentaire) PDES Economic and Social Development Plan PEI Partnership for Economic Inclusion SASPP Sahel Adaptive Social Protection Program SSRLP Social Support for Resilient Livelihoods Project UNDP United Nations Development Programme UNOPS United Nations Office for Project Services The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion vi Glossary Adaptation In human systems, adaptation is the process of adjustment to actual or expected climate impacts and its effects to moderate harm or take advantage of beneficial opportunities. In natural systems, adaptation is the process of adjustment to actual climate and its effects; human intervention may facilitate this. Adaptive capacity The ability of systems, institutions, humans, and other organisms to adjust to potential damage, take advantage of opportunities, or respond to consequences. Adaptive social Adaptive social protection (ASP) helps build the resilience of poor and protection vulnerable households by investing in their capacity to prepare for, cope with, and adapt to shocks, ensuring that they do not fall (deeper) into poverty. Climate Action Refers to a range of activities, mechanisms, and policy instruments that aim to reduce the severity of climate change and its impacts. Climate-resilient The process of implementing greenhouse gas mitigation and adaptation development measures to support sustainable development for all. Climate-resilient development involves questions of equity and system transitions in land, ocean, and ecosystems; urban and infrastructure; energy; industry; and society and includes adaptations for hu-man, ecosystem, and planetary health. Disaster risk Action taken to reduce the risk of disasters and the adverse impacts of reduction natural hazards, through systematic efforts to analyze and manage the causes of disasters, including through avoidance of hazards, reduced social and economic vulnerability to hazards, and improved preparedness for adverse events Economic inclusion The gradual integration of individuals and households into broader economic and community development processes. This integration is achieved by addressing multiple constraints or structural barriers faced by the poor at different levels: the household (for example, human and physical capacity), the community (social norms), the local economy (access to markets and services), and formal institutions (access to political and administrative structures) Economic inclusion A bundle of coordinated multidimensional interventions that support program individuals, households, and communities to increase their incomes and assets. Economic inclusion programs therefore aim to facilitate the dual goal of strengthening resilience and opportunities for individuals and households who are poor. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion vii Glossary, continued Exposure The presence of people, livelihoods, species, or ecosystems; environmental functions, services, and resources; infrastructure; or economic, social, or cultural assets in places and settings that could be adversely affected. Green transition A shift toward an economic model that is not based on fossil fuels and overconsumption of natural resources. The concept of green transition contains societal actions that seek to mitigate climate change (by reducing greenhouse gas emissions concentration) and adapt to it while acknowledging ecological and environmental degradation caused by other factors, such as overconsumption. Hazard The potential occurrence of a natural or human-induced physical event or trend that may cause loss of life, injury, or other health impacts, as well as damage and loss to property, infrastructure, livelihoods, service provision, ecosystems, and environmental resources. IPCC The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change. Just Transition The term is originally rooted in the US labor movement in the 1970s, having now been reinterpreted within environmental and climate justice communities, and incorporated in the Paris Agreement. It refers to a set of principles, processes, and practices that aim to ensure that no people, places, sectors, countries, or regions are left behind in the transition from a high-carbon to a low-carbon economy. It stresses the need for targeted and proactive measures from governments, international organizations, and other authorities to minimize the negative impacts of economy-wide transitions while maximizing benefits for those disproportionately affected. Landscape Landscape approaches recognize the interdependence of human and natural approach systems and create sustainable landscapes that promote prosperity. They require a variety of stakeholders at different levels to work together to increase synergies between different, and often competing, sector-focused goals, such as avoiding ag-ricultural encroachment on protected areas. Loss and damage There is no agreed definition of loss and damage, but the term can generally be understood as the negative impacts of climate change that occur despite, or in the absence of, mitigation and adaptation. Loss and damage can occur due to both extreme events—such as heat waves and storms—and slow onset events—such as sea level rise or ocean acidification. Maladaptation Refers to actions that, often unintendedly, may lead to increased risk of adverse climate-related outcomes, including through increased greenhouse gas emissions, increased or shifted vulnerability to climate change, more inequitable outcomes, or diminished welfare, now or in the future. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion viii Glossary, continued Mitigation A human intervention to reduce the sources or enhance the sinks of greenhouse gases. Also, human interventions to reduce the sources of other substances which may contribute directly or indirectly to limiting climate change. Resilience The capacity of social, economic, and ecosystems to cope with hazardous events, trends, or disturbances, responding or reorganizing in ways that maintain their essential function, identity, and structure as well as biodiversity in the case of ecosystems while also maintaining the capacity for adaptation, learning, and transformation. Safety net Noncontributory transfer programs that target in some manner the poor and those vulnerable to poverty and shocks. Social safety nets can include cash, in-kind trans-fers, social pensions, public works, and school feeding programs aimed at poor and vulnerable households. It is analogous to the US term welfare and the European term social assistance. Social protection Social protection and labor systems, policies, and programs that help individuals and societies manage risk and volatility and protect them from poverty and destitution by means of instruments that improve equity, resilience, and opportunity. Vulnerability The degree to which a system is susceptible to, or unable to cope with, adverse effects of climate change, including climate variability and extremes. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion x Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Introduction Climate change has significant impact—both direct and indirect— on the poverty level of individual households. The resulting uncertainty and volatility can worsen the lives of people living in poverty and push some of them into extreme poverty. Estimates suggest that climate change could In recognition of these challenges, there is a force an additional 132 million more people shift toward climate-resilient development into extreme poverty by the end of this (CRD) (IPCC 2022). International decade—a disproportionate number of them development agencies, including the World women and people with agricultural-based Bank, have begun moving towards a livelihoods (Jafino et al. 2020) (figure 1). In climate-centered approach to development, addition, policies and programs to accelerate which they are funding with substantial the transition to carbon-neutral economy are commitments (Naran et al. 2022). This shift desperately needed. But they can adversely increasingly aligns poverty alleviation and affect some people, by upending labor climate mitigation and adaptation objectives markets and increasing the prices of basic with a strategic emphasis on addressing the goods (ILO 2023a). These direct and indirect needs of those most profoundly affected impacts of climate change require a robust by climate change, particularly poor and social policy response. vulnerable populations, especially women. Figure 1 Impacts of climate change on the number of people living in extreme poverty in 2030 200 150 131.5 Climate change impacts 100 Low High 67.7 50 42.0 32.2 0 Pessimistic Optimistic Source: Jafino et al. 2020. Note: This chart presents two baseline scenarios termed ‘pessimistic’ and ‘optimistic’. The pessimistic baselines consist of global poverty rates between 14 and 15.5 percent%. The optimistic baseline has global poverty rates in the 2.8 percent and 3.8 percent range. The chart then shows the impact of low and high climate change vulnerability. In the worst-case combination—with pessimistic baselines and high climate change impacts—climate change impacts will lead to more than 130 million people falling into poverty by 2030. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 10 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Economic inclusion (EI) approaches can improving their economic opportunities, play an important role in addressing the strengthening their productive assets, challenges at the intersection of climate and enhancing their community and local resilience and poverty reduction. EI programs economy links. Despite this promise, are bundles of coordinated, multidimensional the strategic integration of climate interventions that support individuals, considerations into EI programs and households, and communities in efforts to practical insights on how to advance this increase their incomes and assets. Often agenda remain limited. building on existing social safety nets, jobs and livelihoods interventions, and financial This note explores the linkages between inclusion programs, EI programs are diverse climate change and EI and proposes pathways and flexible instruments that benefit over through which EI programs can more 90 million individuals in 75 countries, either strategically support climate resilience. It is directly or indirectly. These programs help intended for policymakers and practitioners support the gradual integration of individuals working on EI programs. The note first and households into broader economic provides an overview of the interconnected and community development processes challenges of poverty and climate change, by addressing the multiple constraints followed by an overview of the growing or structural barriers they face at various policy landscape surrounding them. It then levels. They can also help people manage presents a framework for Climate-Resilient the impacts of shocks, adapting program Economic Inclusion (CREI) that can help design in the context of rapid and slow onset inform the design of both existing and new climate events (Andrews et al. 2021). EI programs. Drawing primarily on World Bank experience, the note also provides Significant opportunities exist to align practical examples of how EI programs climate action with EI efforts. Poverty are currently aligning their design and alleviation is increasingly recognized as a operations with the CREI framework. It vital strategy for managing climate risks, concludes by highlighting the way forward, providing an opening for more ambitious acknowledging the need for further work investments that tackle both issues together. to operationalize the framework and fully EI programs are well placed to help build realize its potential. climate resilience of poor people by The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 11 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Climate Change, Poverty, and the Paradigm Shift toward Climate-Resilient Development THE CLIMATE-POVERTY NEXUS The intersection of poverty and climate change presents a complex array of challenges (Figure 2). People at the nexus of climate change and poverty are affected by persistent poverty, vulnerability to shocks and disasters, precarious employment prospects, and untapped potential for climate adaptation and mitigation. This climate-poverty nexus is presented in from achieving social and economic inclusion Figure 2 and results from two factors: poverty (Andrews et al. 2021). These constraints—at constraints (on the left-hand side) and climate the individual and household, community and impact drivers (on the right-hand side). local economy, and/or institutional level—can leave them more vulnerable to risks and limit Poverty constraints illustrated on the left their ability to adapt. At the household level, of figure 2 prevent people living in poverty people living in poverty tend to rely more Figure 2 The nexus between climate change and poverty Poverty Constraints Climate-Poverty Nexus Climate Impact Drivers Entrenched Individual and Household Constraints Constraints Climate Hazards poverty and low Low human, physical, and social capital Undermine Amplify Extreme events (e.g., cyclones) resilience challenging intra-household dynamics economic constraints to Slow onset events (e.g., sea level rise) Limited rights and aspirations inclusion economic Ecosystem Degradation inclusion Community and Local Economy Increased Loss of productive resources (e.g., Jobs, livelilhoods, Generate Restrictive social and gender norms vulnerability to desertification affects livelihoods) risks and food security cascading Constraining local markets, services, ecosystem and Externalities of Green Transition and infrastructure livelihood Consequences of mitigation policies Incentivize impacts Institutional maladaptation Few adaptations (e.g., regressive carbon taxes, job Political interference and mitigation Negatively losses in “brown sectors”, misallocation options affect of green jobs) Lack of government capacity and employment ministerial coordination and livelihoods Source: Partnership for Economic Inclusion The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 12 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs heavily on climate-sensitive livelihoods, such as transition is necessary and desirable, but it can agriculture in rural areas and unskilled sectors leave some people behind—especially those such as construction in urban areas. They also who lack the opportunities and skills to move tend to live in areas that are more exposed to new, higher-skilled jobs. Green transition to extreme events and have less resilient or efforts will inevitably lead to loss of jobs in more exposed infrastructure (Hallegatte et sectors with large environmental footprints al. 2016). The world’s poorest people typically (‘brown’ sectors). The transition will also create lack the resources (money, physical assets, opportunities in ‘green’ sectors, but those jobs and human capital) to cope with the direct may be in a different location, may require and indirect short- and long-term shocks and new and different skills, or may be created at livelihood changes that accompany climate a different point in time than those that were change. At the community level, social norms lost. can hinder social and economic inclusion, especially for women, older people, and people Unless addressed, the consequences of the with disabilities. At the institutional level, climate-poverty nexus for the poor are lack of government capacity and ministerial significant. As depicted in the center of figure 2, coordination as well as political interference these two forces—climate impacts and poverty can reduce the effectiveness of poverty constraints—intersect in ways that can amplify reduction and broader economic development and/or compound each other, giving rise to efforts. These factors heighten the vulnerability a set of limiting conditions for the poor. This of the poor. Understanding these poverty includes the following: constraints is essential for designing effective responses and reducing the risk of unintended 1. Entrenched poverty and a lack of climate consequences. Programs that do not consider resilience, wherein poverty has become poverty constraints can lead to maladaptation, a fixed condition, and opportunities for for example, when poorly designed or executed developing a more resilient livelihood are measures such as seawalls lead to unexpected scarce or non-existent. adverse consequences for both livelihoods and 2. Greater job and livelihood insecurity, marine ecosystems (Piggott-McKellar et al. characterized by a lack of consistency, 2020). predictability, and opportunities for better employment and livelihoods. This situation Climate change also amplifies and exacerbates is exacerbated by increased food insecurity the risks poor people face, as illustrated resulting from factors such as growing on the right of figure 2, by introducing an frequency of heat waves, heavy rainfall, and additional layer of stressors. First, it leads to droughts. more frequent extreme events (for example, 3. Limited opportunities for adaptation and storms and droughts). Gradual changes or slow mitigation, without adopting drastic and onset events also affect lives and livelihoods, risky changes to livelihoods, which may especially of the most vulnerable (for example, further exacerbate poverty. sea level rise and desertification). Ecosystem degradation (deforestation, soil erosion, and THE NEW FOCUS ON CLIMATE- other environmental impacts) significantly RESILIENT DEVELOPMENT affect individuals with climate-dependent livelihoods, such as smallholder farmers. Growing recognition of the importance of the Negative spillovers can result in food insecurity wide-ranging impacts of climate change for among the most vulnerable populations. development, including for poverty and other Climate change also requires societies to socioeconomic outcomes, is contributing to transition to more sustainable economies, the emergence of a new paradigm of global sometimes called a ‘green transition’. This development. International and national The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 13 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs actors recognize that addressing climate Just Transition framework (ILO 2023a); and change and managing its impacts are crucial to the strategic framework of the Food and development. Agriculture Organization (FAO) 2022–2031 (FAO 2022). These approaches aim to support Global climate finance from all sources almost outcomes at the nexus of climate and poverty, doubled in the last decade, with a cumulative contributing to CRD, a framework proposed US$4.8 trillion committed between 2011 and by the Intergovernmental Panel on Climate 2020 (US$480 billion a year on average) (Naran Change (IPCC) that aligns climate adaptation et al. 2022). Several international agencies, and mitigation goals with inclusion, equity, and including the World Bank and other bilateral justice (Box 2). and multilateral banks, have committed to align their operations and financing with the Paris Agreement (box 1) (ADB 2023; AfDB 2023; Box 2 What is climate-resilient World Bank Group 2021). development? Climate-resilient development (CRD) is the framework Box 1 The Paris Agreement and its that the IPCC uses to guide responses to climate implications for World Bank-financed impacts and risks in a way that contributes to sustainable development. CRD focuses on the transitions in all projects systems and aspects of human life, from land, ocean, and ecosystems to urban and rural infrastructure and energy, At the 21st Conference of the Parties (COP 21), held in industry, and society. This transition also needs to restore December 2015, the Paris Agreement became a legally and protect ecosystems, accelerate climate change binding international treaty on climate change. The mitigation, and provide livelihood and ecosystems agreement has three objectives: (a) limit the average services that contribute to transitions of human systems. global temperature increase to well below 2°C, preferably 1.5°C, from pre-industrial levels; (b) increase the ability CRD addresses climate and poverty risks in an integrated to adapt to the adverse impacts of climate change and way, so that the solutions to both reinforce rather than foster climate resilience; and (c) make finance flows undermine each other. For example, actions to restore consistent with a pathway toward low greenhouse gas ecosystems can also enhance resiliency to food insecurity emissions and CRD. and reduce the social and economic impacts of climate- related disasters. CRD recognizes the importance of As part of its Climate Change Action Plan 2021–2025, targeting human health and well-being, equity, and the World Bank Group committed to align its financial justice to ensure that the impacts of climate change flows with the objectives of the Paris Agreement. As of responses are shared evenly. July 1, 2023, all new World Bank-financed operations Source: IPCC 2022. must demonstrate ‘Paris Alignment’ (consistency with the objectives of the Paris Agreement and a country’s pathway toward low greenhouse gas emissions). This mandate reinforces the World Bank Group’s position as CRD calls for comprehensive and coordinated the largest multilateral provider of climate finance for global efforts to reduce the impending developing countries. impacts of climate change and safeguard the well-being of vulnerable populations. Ambitious and robust social policy responses This paradigm shift increasingly recognizes that grounded in an understanding of the climate achieving climate goals and ending poverty vulnerability of the poor are instrumental need to go hand in hand. International actors to operationalizing global and national are aligning poverty reduction with climate strategies at the nexus of climate change and mitigation and adaptation objectives (IMF 2022; poverty (Mearns and Norton 2010). Moreover, Mottley 2022; UNRISD 2021), including the understanding the connection between climate World Bank’s Green, Resilient, and Inclusive change and poverty is essential for designing Development (GRID) approach (World Bank effective responses and reducing the risk of 2021a); the International Labour Organization’s unintended consequences, often referred to as The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 14 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs maladaptation. Understanding the constraints impacts and face disproportionate risks. households face at all levels—and that lead On the other hand, people living in poverty to differences in climate vulnerability and are often also environmental stewards, with exposure—as well as the direct and indirect the potential to manage natural resources climate drivers they face will be instrumental effectively and sustainably (Charles, in deploying more impactful climate resilience Kalikoski, and Macnaughton 2019). investments. However, their potential for environmental stewardship is frequently undermined by ECONOMIC INCLUSION AS AN systemic barriers such as lack of access ENABLER TO CLIMATE-RESILIENT to education, financial resources, and DEVELOPMENT political power. Overcoming these barriers requires a multifaceted EI approach that In recognition of the detrimental impact of addresses socioeconomic inequities while inequality and exclusion on both poverty empowering poor communities to engage reduction and climate change adaptation in sustainable natural resource management and mitigation efforts, climate resilience is practices. In urban areas, EI programs focus increasingly becoming an important focus on disadvantaged and vulnerable groups, of EI approaches. While it is relatively especially women, who often face greater nascent, international actors are already exposure to risk and loss of livelihoods leading important innovations and thinking (Avalos et al. 2021). Supporting women’s in this space: for example, comprehensive empowerment has been shown to reduce risk management of the Federal Ministry of climate vulnerability (see Spotlight 1. Economic Cooperation and Development below). (BMZ) (BMZ 2019), Concern Worldwide’s greening graduation (Concern Worldwide • EI programs seek to increase incomes 2022), the FAO’s food system transformation and assets, which can build household’s (Charles, Kalikoski, and Macnaughton 2019), resilience to shocks, reduce vulnerability, mainstreaming of climate change in ultra-poor and enhance adaptive capacity to better graduation programs of BRAC (BRAC 2020), prepare people for climate shocks. They and bolstering of resilience through financial do so by providing bundled, multisectoral services of the Consultative Group to Assist the interventions including cash or in-kind Poor (CGAP) (Notta and Zetterli 2023). transfers, skills training, coaching, access At the World Bank, climate resilience is now to finance, and links to market support. a key focus of social protection and labor These interventions can help facilitate operations, which operationalize existing asset accumulation, income diversification, frameworks and approaches within the social and increased savings which can help the protection portfolio (Bowen et al. 2020; Rigolini poor prepare, cope with, and recover from 2021). In addition, the interconnectedness shocks. of climate change and poverty as well as the importance of economic inclusion measures • EI programs can directly build climate in addressing climate impacts have been resilience through livelihood diversification. recognized for years (Mearns and Norton As the productivity of natural resource- 2010). In particular, it is recognized that EI is based livelihoods declines due to climate already well placed to contribute to CRD in the change, people will need to be supported following ways: with transitioning to new livelihoods. EI can support livelihood diversification • EI programs target the extreme poor and through employment generation, asset marginalized groups. People in rural areas transfers and asset building, livestock tend to be more vulnerable to climate restocking, seed transfers, training and The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 15 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs skills development, microfinance initiatives, particular, there is limited understanding more orderly migration, and access to of how to align climate and social goals and remittances that is safe and easy. Skills translate them into appropriate program development and retraining, often a critical design as well as integrating such programs element of EI programs, are also crucial into larger policy efforts to address climate to facilitating an equitable Just Transition change (Costella et al. 2021). This can have (ILO 2023a). consequences for the effectiveness of economic inclusion programs, such as when programs However, while the importance of economic that fail to consider climate factors can in turn inclusion—and social protection—approaches increase vulnerability of people, for instance, in addressing climate-related challenges have when a program supports a shift to alternative been recognized for some time, the integration livelihoods that are in fact less resilient to between climate and poverty concerns at climate change or environmentally degrading the policy and program level is nascent. In (Tenzing 2019). Spotlight 1 The gender bias of climate change Women are often more affected by climate shocks and stresses than men (IPCC 2022; UN Women 2020). Climate change often exacerbates existing gender inequalities, as women are overrepresented in natural resource-based and climate-vulnerable sectors, including agriculture and forestry. Socioeconomic factors, laws and regulations, and social norms create conditions that weaken women’s social, financial, and economic outcomes following climate stresses and shocks (Erman et al. 2021; UNFCCC 2022). These factors limit women’s options and ability to adapt to and cope with the adverse effects of climate change (Deininger et al. 2023). Several studies document the gendered effects of climate change on women. During the 1991 Bangladesh Cyclone, for example, women were trapped in their homes during flooding and were unable to escape to higher ground—in part because of sociocultural norms that did not allow them to leave their houses without being accompanied by a male relative. As a result, women and children were the cyclone’s main victims (Schipper 2020). Women’s traditional roles as providers of household food and water security often require them to take on extra responsibilities during times of environmental stress, thereby increasing their workload and reducing their capacity to engage in income-generating activities or pursue education (Codjoe, Atidoh, and Burkett 2012). A recent study conducted in rural Bangladesh surveyed households to assess their exposure to climate change and their spending patterns on risk reduction. The findings revealed that women and girls faced a heavier financial burden when it came to climate adaptation measures. Female-headed households spent a larger share of their income on flood and storm adaptation than men (Eskander et al. 2022). EI programs are well placed to address the complex and multidimensional intersections of gender equality and climate change. As programs scale, it will be critical to ensure gender-smart design and encourage livelihood diversification to reduce women’s overrepresentation in natural resource-based sectors. Through improved socioeconomic standing and participation in decision-making, women can significantly contribute to climate change mitigation and adaptation efforts, thereby reducing climate vulnerability within communities. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 16 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Pathways to Climate-Resilient Economic Inclusion The ‘Climate-Resilient Economic Inclusion’ (CREI) framework includes three principles (climate and poverty alignment, policy integration, and cross-cutting technical collaboration) and three program areas (adaptive safety nets, food and ecological systems, and green jobs and the green transition) (figure 3).1 This framework is conceptual and based on a relatively small body of programmatic experiences with CREI. Its objective is to lay the groundwork for future efforts. Figure 3 Pathways to Climate-Resilient Economic Inclusion Climate-Poverty CREI Principles CREI Program Areas Adaptation and Increased Climate Nexus Mitigation Outcomes Resilience Entrenched poverty Climate and poverty Adaptive safety nets Reducing vulnerability For individuals, and low resilience alignment (e.g., and avoiding communities, and “climate-aware,” Food and ecological maladaptation institutions, Jobs, livelihoods, and “linked,” or systems including food security “purposed”) Disaster risk reduction Green jobs and and shock improved Few climate change Policy integration transition preparedness climate-poverty adaptation and governance mitigation options Cross-cutting technical Livelihoods and jobs collaboration transformation Natural resources and ecosystems protection and restoration Emissions reductions or capture Source: Partnership for Economic Inclusion PRINCIPLES Climate and poverty alignment The core principles are intended to ensure Climate- and poverty-aligned programs that EI interventions reduce vulnerability need to simultaneously consider and address in a manner that helps targeted populations climate and poverty constraints and their navigate the climate and poverty risks and do interactions. Within the CREI framework, not contribute to maladaptation. Given the programs may showcase varying degrees of early stage of CREI, only a few of the reviewed climate and poverty alignment. They can programs comprehensively incorporate all three either be climate-aware, climate-linked, or principles. climate-purposed. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 17 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs • Climate-aware programs: These pastoral women and youth out of extreme programs acknowledge climate risks and poverty while restoring degraded forests and their impact on poor and vulnerable pasture in the drylands through ecosystems’ communities but do not comprehensively restoration, provision of cash grants, savings integrate climate and poverty promotion, skills training, and mentoring for considerations into their objectives, climate-resilient businesses. These initiatives components, or activities. aim to advance climate resilience and support transitions to alternative livelihoods in the • Climate-linked programs: These face of climate challenges. programs integrate climate and poverty considerations in specific components Policy integration or activities. However, climate change is not a primary objective and is not fully EI programs that aim to be climate-resilient aligned with project outcomes. need to connect to national policies and programs with longer-term climate • Climate-purposed programs: Programs objectives. Programs that are one-off, time- in this category exhibit the highest level or project-bounded, and/or disconnected of climate-poverty alignment. They from larger climate and environmental comprehensively assess and address the national strategies are less likely to achieve intersection of climate and poverty by transformative change at scale than programs explicitly incorporating climate objectives that are integrated with national policies and into their activities, components, and programs. outcomes. The Rural Livelihoods in Lagging Regions The overarching aim will be for programs to Project in Jordan closely aligns with both be climate-purposed. We are beginning to national and regional climate change see a host of nongovernmental organization action plans. It enhances the resilience of (NGO) programs moving in this direction, the agriculture sector by implementing in some cases building on government-led water-efficient technologies and climate- programs. For instance, Concern Worldwide’s smart practices throughout the agri-food program in Malawi, ‘Enabling Sustainable value chain, incorporating the objectives Graduation out of Poverty for the Extreme of Jordan’s climate change adaptation plan. Poor in Malawi’, addresses the intersection of The program also contributes to the climate climate and poverty by providing coaching in change action plan for the Middle East and climate-smart agriculture, home gardening, North Africa, which seeks to advance climate and food budgeting, alongside community change adaptation and reduce greenhouse gas engagement, conservation agriculture, and emissions within the agriculture and land use agroforestry. Additionally, BRAC’s Ultra- sectors. Poor Graduation Programme and BRAC’s Disaster Risk Management Programme are Cross-cutting technical collaboration collaborating to strengthen the resilience of climate-induced migrants in Bangladesh Successful government-led climate-resilient EI through climate-resilient sanitation systems, programs require strong partnerships across climate-adaptive livelihood training, and sectors, levels of government, and different health support. Lastly, The BOMA Project’s stakeholders including NGOs, civil society, Green REAP (Rural Entrepreneur Access and the private sector. They require social, Program) in Kenya and Ethiopia aims to lift environmental, and climate-related actors to The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 18 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs collaborate technically. At both the national • Food and ecological systems: and local levels, integrating marginalized Interventions within this program groups, community organizations, NGOs, and area support the sustainable, long- the private sector across a range of sectors term adaptation of climate-sensitive is important. Cooperating and co-learning food systems in agriculture, fisheries, across organizations and sectors will help and forestry while helping preserve speed the integration of climate resilience and and restore the natural resources and EI objectives and help ensure that outcomes ecosystem services on which such are sustained. livelihoods depend. The Landscape Restoration and Resilience • Green jobs and green transition: Project in Burundi is a government-led Interventions within this program area program that integrates the expertise help households and communities move of multiple international cooperation out of extractive or climate-sensitive agencies and NGOs, including FAO, sectors into greener sectors. United Nations Development Programme (UNDP), Gesellschaft für Internationale The program areas and their outcomes Zusammenarbeit (GIZ), and Bioversity overlap, and programs can contribute to more International. It promotes cross-sectoral than one. They are a useful way to identify the collaboration by governmental agencies primary focus of a program or component in and research institutions to restore land relation to climate resilience objectives. productivity in degraded landscapes and contribute to resilient livelihoods and food OUTCOMES security. The project also aims to strengthen cross-sectoral collaboration by ministries of Application of the principles and a focus water, environment, agriculture, and land and on one or more of the program areas can include national-, provincial-, and local-level contribute to the following outcomes: institutions in implementation. At the local level, the project mobilizes grassroots-level • Reducing climate vulnerability and groups and integrates NGOs, the private avoiding maladaptation sector, and farmers organizations. • Reducing disaster risk and improving shock preparedness PROGRAM AREAS • Improving livelihoods and transforming jobs CREI includes three key program areas: • Projecting and restoring natural resources and ecosystems • Adaptive safety nets: Safety nets help • Reducing or capturing greenhouse gas households prepare for, cope with, and emissions adapt to climate shocks and disasters, increasing their resilience to both. This The extent to which climate-resilient program area combines cash transfers and EI programs contribute to the different underlying delivery systems that can make outcomes will depend on their goals and them more responsive to shocks, manage design. Not all EI programs can contribute disaster risks, and adapt to climate to all outcomes, and not all do so to the same change. extent. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 19 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs At its most basic, the climate-and-poverty- away from extractive industries toward more alignment principle aims to ensure that climate-sensitive livelihoods. A focus on food programs at least avoid maladaptive outcomes and ecological systems can contribute to the and that vulnerability is not increased in restoration and sustainable management of the context of climate change. When they natural resources, promotion of climate-smart are climate-purposed, EI programs can technologies, and restoration and protection purposefully reduce climate vulnerability of ecosystems while contributing to reduce or and help make choices that lead to positive capture emissions. adaptation in the context of climate change. Finally, the principles, program areas, By focusing in specific program areas, EI and their outcomes overlap given the programs can achieve different climate multidimensional nature of EI programs and resilience outcomes. EI programs that focus the interconnected dynamics of climate and on adaptive safety nets have the potential to poverty risks. For example, EI programs that contribute to increasing shock preparedness focus on providing an adaptive safety net may and reducing disaster risks by enhancing also involve components that encourage a households’ awareness and capacity to deal transition to green jobs. Similarly, programs with shocks and reducing physical risks in that target inclusion into green jobs could their environment. EI programs focused also involve natural resources or ecosystem on green jobs can facilitate livelihoods and restoration practices. jobs transformation by helping people move Spotlight 2 Addressing poverty and the impacts of climate change in the Republic of Congo through a ‘climate-purposed’ project The Republic of Congo is one of the world’s poorest countries. In 2021, 52 percent of its population was living on less than US$2.15 a day. Torrential rains, floods, and landslides have devastating effects on the country’s agriculture and ecosystems—and the impacts of climate change are disproportionately falling on the poorer and more vulnerable segments of society, most of whom depend on agricultural activities and ecosystem services. To address both poverty and the effects of climate change, in 2023, the World Bank approved the US$82 million Climate-Resilient and Inclusive Livelihoods Project (ProClimat Congo), an economic inclusion intervention that adopts the principles of the CREI framework: • Climate-poverty alignment: ProClimat aims to strengthen landscape management and promote sustainable livelihood activities in vulnerable communities. Long-term goals include increased agricultural productivity, improved protection of biodiversity and natural capital, strengthened climate resilience of people and landscapes, and increased diversification of rural economy and livelihoods. The project adopts a landscape approach2 that harmonizes economic development needs and conservation while building climate resilience in vulnerable communities. The project is also gender sensitive, addressing barriers that prevent women from participating in broader livelihood activities. • Policy integration: ProClimat draws on the government-endorsed Climate Smart Agriculture Investment Plan (CSAIP) and considers the 2023 Resilience Plan on the Food Crisis. The project also aligns with the upcoming national ecotourism strategy under the Congolese Agency for Wildlife and Protected Area’s leadership. Engaging communities in decision-making and planning through bottom-up and top-down approaches is a vital aspect of the project. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 20 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Spotlight 2, continued • Cross-cutting technical collaboration: ProClimat fosters cross-cutting technical collaboration by complementing other development initiatives country such as the Sustainable Land Use Program and the Adapt’Action Facility of the Agence Française de Développement (AFD) and the World Food Programme’s efforts to build adaptive capacity to climate change through community-based early warning systems. ProClimate collaborates with several government-led programs, including the Lisungi Safety Nets System Project, to enhance socioeconomic analysis at the household level to better target vulnerable communities. Moreover, the program relies on grant funding and technical support from the World Bank to facilitate knowledge sharing; enhance analytical capacity; and strengthen coordination across geographic zones, sector entities, and development partners. ProClimat aligns with the CREI framework’s food and ecological systems program area, aiming to provide diversified climate-resilient economic activities in sustainable agriculture, community forestry, non-timber forest products, and ecotourism. To inform EI activities, it assesses the vulnerability of different groups to climate change, their use of sustainable and resilient agricultural practices, management of natural capital, and barriers to women’s economic empowerment. Community groups (particularly women’s groups) receive training on sustainable practices, life skills, and business development, along with grants to implement climate-resilient livelihood investments. They receive support from extension services, and access to financial services, cooperatives, and digital technology. By adopting a comprehensive landscape approach, it simultaneously addresses economic development, natural resource management, and conservation. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 21 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs A Snapshot of the Climate- Resilient Economic Inclusion financed by the World Bank Economic inclusion programs, including those financed by the World Bank, are already contributing to CRD.3 According to an internal World Bank portfolio review conducted in 2023, 62 percent of World Bank-financed projects supporting government-led economic inclusion programs (184 programs) address challenges at the intersection of the climate-poverty nexus, even if many do not have climate-specific objectives. Most of these programs focus on responding roughly one-third operating in urban areas. to shocks, improving resource management, Geographically, 57 percent of the programs and strengthening agri-food value chains. are in Sub-Saharan Africa, 13 percent in Latin Accounting for overlaps in some programs, America and the Caribbean, and 10 percent in most of them operate in rural areas, with South Asia (figure 4). Figure 4 World Bank-supported climate-related economic inclusion programs and climate vulnerability, by country Source: University of Notre Dame 2023. Note: The climate data measure a country’s level of vulnerability and readiness to adapt. The darker the color, the more vulnerable to and less prepared for climate impacts a country is. Blue dots show the locations of World Bank-financed CREI projects. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 22 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs This review identified 15 World Bank-financed to income support, training, and public projects that adhere the most to the principles works, and incorporate innovations of the CREI framework (see the appendix to pursue climate-resilient outcomes, for a description of the projects). All these depending on the program area. Programs projects include components that contribute tweak existing EI components and add to climate resilience in at least one of the three new components to address specific program areas. The CREI programs reviewed constraints and align poverty and climate have some common features that make them objectives. climate resilient: • The programs exhibit policy integration • The programs reviewed exhibit strong and leverage cross-cutting technical climate-poverty alignment and are either collaboration with key stakeholders climate-linked or climate-purposed. at the national and local levels. The They assess the climate-poverty nexus, programs reviewed link national policies identify the binding constraints, and to advance long-term climate objectives. translate them into climate outcomes. Most of these EI programs include an Government-led EI programs in Central institutional development and capacity- Asia, Chad, Ethiopia, the Republic of building component to improve planning, Congo, Costa Rica, and Haiti performed management, and monitoring of climate a comprehensive assessment of this outcomes. For instance, the Lowlands nexus that allowed them to develop Livelihood Resilience Project in Ethiopia appropriate CREI interventions. For integrates national policy, contributing instance, the Resilient Landscapes and to Ethiopia’s Climate-Resilient Green Livelihoods Project II in Ethiopia found Economy Strategy by strengthening that land degradation and soil erosion the livelihood resilience of pastoral and were exacerbating climate shocks and agro-pastoral communities. It promotes threatening poverty reduction and cross-sectoral collaboration at the national food security. The program sought to and local levels by leveraging partnerships (a) improve climate resilience, land with research institutions, universities, the productivity, and carbon storage and (b) private sector, and NGOs. increase access to diversified livelihood activities. WORLD BANK PROJECT EXAMPLES BY CREI PROGRAM AREAS • The programs often include climate criteria with poverty measures in their CREI programs typically center around one targeting of participants. The climate primary program area, which helps define criteria vary with the program area. its design features, including objectives, For instance, criteria such as the level outcomes, components, and activities. The of land degradation and soil erosion or following analysis of selected programs the potential for integrated landscape illustrates the various types of activities restoration are frequently incorporated associated with each program area. in EI programs focused on food and ecological systems. EI programs that focus Adaptive Safety Nets on adaptative safety nets usually include vulnerability to climate-related disasters as Adaptive safety net programs build resilience a criterion. by helping poor and vulnerable households prepare for, adapt to, and cope with climate- • The programs often adapt their core EI related shocks. These programs bring together program components, mainly related social protection, disaster risk management, The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 23 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs and climate change adaptation to build income, and as psychosocial well-being. The household resilience to both extreme and project’s productive interventions—such slow-onset climate events (Bowen et al. 2020). as the creation of self-help groups, basic Typical EI programs in this area could entrepreneurship and life skills training, and include bundles of interventions that the provision of business capital—helped combine regular income support, income boost productive investments and diversify transfers related to specific shocks, public off-farm income-generating activities, works programs with a focus on disaster risk increasing households’ resilience to climate reduction, access to climate risk information shocks. (including early warning systems), and access to disaster insurance. They can be combined The Productive Safety Net for Socioeconomic with interventions that help build a savings Opportunities Project (SNSOP) in South and asset base (skills training, livelihoods Sudan is contributing to disaster risk diversification, and financial services). reduction and shock preparedness through labor-intensive public works (LIPW) and In 2014, the World Bank launched the Sahel direct cash transfers. LIPW activities focus Adaptive Social Protection Program (SASPP) on creating community assets that reduce with the aim of increasing adaptive social the risk of natural disasters such as flooding. protection in six countries in the Sahel Subprojects may include investments in (Burkina Faso, Chad, Mali, Mauritania, the building of flood protection structures, Niger, and Senegal). In Niger, the Adaptive such as flood control dikes; the cleaning of Safety Net Project 2 was launched in the sediment from waterways; the planting of context of severe droughts, heat waves, low trees; the terracing of degraded lands; and institutional capacity, and heavy reliance on the building of water-harvesting structures. rain-fed agriculture, resulting in chronic food The project provides unconditional cash insecurity. The project aimed to strengthen transfers to the very poor and vulnerable the resilience of the poor and vulnerable households that are unable to engage in LIPW. in areas affected by climate shocks by Recipients of these monthly payments include providing regular monthly cash transfers, refugees and host community households complementary shock-response cash transfers, without able-bodied adult members. The and accompanying EI measures designed to project is implemented by the Ministry of build resilience to climate change. The project Agriculture and Food Security (MAFS), with adopted the CREI framework principles of collaboration by the Ministry of Gender, policy integration and technical collaboration Child, and Social Welfare (MGCSW) and the by incorporating technical and operational United Nations Office for Project Services support to strengthen national institutional (UNOPS). This collaboration reinforces capacity in the area of early warning; the the linkages between food security and capacity to rapidly scale up in times of shocks social protection and aims to enhance and crisis; and national mechanisms for policy dialogue on climate adaptation and crisis prevention, preparedness, and response mitigation. planning that support coordination between humanitarian and development actors. The Social Support for Resilient Livelihoods Project (SSRLP) in Malawi fosters resilience An impact evaluation of the project provides to climate shocks by providing resilient evidence that it increased household livelihood support, climate-smart public consumption and decreased food insecurity works, and emergency cash transfers. (Bossuroy et al. 2022). The benefit-cost ratios In preparation for climate shocks, the of the EI interventions were high, with strong project promotes diversified livelihood impacts on consumption, food security, opportunities for both on-farm and off- The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 24 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs farm income-generation activities through enhanced value chains in climate-dependent building household-level assets, enhancing sectors, such as climate-smart agriculture risk management, and facilitating a shift and agroforestry, or ecosystem-oriented to more productive activities. The basic public works programs that focus on natural livelihood support includes building capital and resources. Interventions that capacity in business management, financial help people build better livelihoods more literacy, disaster risk management, savings generally and increase human capital can mobilization, and transformative or mind- help beneficiaries diversify their income set change trainings. Prioritizing women sources while improving their food and and youth, the project also provides selected surrounding ecosystems. These interventions beneficiaries enhanced livelihood support include training, livelihood diversification, including linkage to financial institutions, business capital and financial services, access group value chain grants, and market linkages. to climate risk information relevant for The climate-smart public works component economic activity, and access to (cleaner) focuses on land and water conservation and energy sources. Interventions can also support rehabilitation and maintenance of small broader policy development in shifting infrastructure. Activities include forest toward more sustainable value chains that restoration; land resources conservation; and consider protecting natural capital. rehabilitation of water supply, drainage, and small access roads. Finally, along with regular The Local Development and Adaptation cash transfers, the project is designing and Project in Chad addresses the challenges testing a mechanism to channel emergency posed by population growth, livestock cash transfers under extreme climate shocks and farming expansion, and inadequate for those who are not regular beneficiaries management, which are exerting pressure of the program and/or increase benefits to on natural resources, accelerating land regular program beneficiaries. degradation, and putting livelihoods at risk. The project adopted an integrated Food and Ecological Systems approach to promote the restoration and sustainable management of natural resources CREI programs that focus on food and and introduce climate-smart technologies. ecological systems reduce the vulnerability It supports the establishment of integrated and exposure of climate-dependent agricultural production sites where livelihoods, especially from gradual producers adopt climate-smart agriculture environmental changes. These programs technologies to promote diversified, resilient, promote practices that preserve and restore and sustainable livelihoods. Activities natural resources and ecosystem services, include training, demonstration plots, and rather than degrade them, and actions the provision of improved seeds and tree that deliver more secure and sustainable plantations adapted to local conditions and livelihoods. The transformation of natural climate variability. land into agricultural areas is a significant driver of climate change. Food and ecological The Landscape Restoration and Resilience systems programs play an important role Project in Burundi shows how CREI in promoting improved natural resource programs can preserve and restore food and management and incentivizing the shift ecological systems while diversifying climate- toward diversified non-agricultural dependent livelihoods. The vast majority of employment opportunities. Burundians lack the ability to withstand the effects of climate change such as droughts, Typical interventions include technical floods, and landslides, all of which already and financial support for sustainable and affect them. This project adopts a community- The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 25 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs driven landscape approach to restore land to food sovereignty. As part of the program, productivity in degraded landscapes. It around 1,270 rural producer organizations will mobilizes local people to construct terraces form productive alliances to facilitate their on degraded hillsides and increase vegetation participation in value chains with commercial cover to prevent soil erosion and improve soil partners and access to technical assistance moisture. The project also trains groups of providers to achieve improved, more poor farmers to adopt alternative livelihoods, equitable access to markets, technologies, including in ecotourism, honey production, and organizational skills. The project and fruit cultivation. The project has a will significantly improve the productive strong gender-inclusive focus. In Burundi, capacity and market access of rural producer land registration has been key for increasing organizations, training, and knowledge women’s empowerment. Over 70 percent of transfer. the 100,000 land certificates issued by the project went to women. Legal ownership Green Jobs and the Green Transition of land has allowed women to obtain more equitable access to project activities, such CREI programs that focus on green jobs as training in climate-smart agriculture and the green transition can play a crucial techniques like terracing, the use of improved role in assisting households to cope with seeds, and nature-based solutions that the impacts of the transition away from respond to flooding. Land titles have also extractive or climate-sensitive sectors. helped women secure loans for income- Typical interventions in this area include generating activities. training, coaching, mentoring, and other forms of skills development; access to wage Food and ecological system programs also employment in green (or climate-neutral) play an important role in addressing chronic jobs, including job search and placement; food insecurity. In Haiti, the Emergency access to financial services and business Resilient Agriculture for Food Security capital; access to cleaner energy and Project (PARSA) targets people facing some technologies for cooking and transportation; of the worst levels of food insecurity in the and compensation to households hurt by the world. The agriculture sector continues to shift away from carbon-intensive industries. face climatic shocks, including drought, low Policy development on green jobs, the Just rainfall, and watershed degradation. The Transition, women’s access to green labor project emphasizes climate- and nutrition- opportunities, and clean energy are also smart agricultural production, encouraging important. farmers to adopt sustainable practices and providing improved irrigation, drainage, and Only a handful of reviewed programs focus soil conservation services. It will generate on green jobs and the green transition. The 4.5 million person-workdays through labor- Sustainable Fisheries Development Project intensive participatory community work to in Costa Rica is building the capacity for the strengthen rural productive infrastructure design and potential implementation of an that increases resilience to climate shocks. EI strategy for low-income and vulnerable fishing communities. It aims to support the Another project that addresses chronic food most vulnerable fishery workers and their insecurity is the Innovation for Resilient families who are forced to limit their fishing Food Systems (Rural Alliances–PAR III) efforts or who decide to transition to a Project in Bolivia. This project aligns with different economic activity. The project, led national policy framework outlined in by the Costa Rican Fishing and Aquaculture Bolivia’s Economic and Social Development Institute (INCOPESCA), intends to ensure Plan (PDES 2021–2025) with a commitment that the transition to sustainable fisheries The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 26 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs management considers the short- and approved, the project will reinforce resilient medium-term socioeconomic impact on livelihoods and enhance the incomes of vulnerable populations. Toward that end, it farmers, small entrepreneurs, and vulnerable is profiling vulnerable fishing communities members of communities in areas prone and characterizing local economic activity, to climate-induced mudflows, with a focus to connect people to job opportunities on women and youth. EI activities include and service packages. The project links business training, support for business plan communities with existing government development, and market linkages to produce programs and seeks to build INCOPESCA’s climate-smart and natural resource-based capacity to identify the need for new products using locally available and leftover programs, connect with existing programs, raw material. and ensure the timely provision of services to vulnerable fishing communities. The Kyrgyz Republic’s Resilient Landscape Restoration Project aims to reduce pressure on forests, pastures, and agricultural lands. It is part of the World Bank’s Central Asia Resilient Landscape Restoration (RESILAND CA+) Program, established in 2019 to provide countries in Central Asia with a regional framework to increase the resilience of regional landscapes and people through landscape restoration. Once The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 27 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs The Way Forward: Recommendations for Policymakers and Practitioners Economic inclusion programs are strategically positioned to address the intricate relationship between poverty and climate challenges (the climate-poverty nexus). By aligning policies, fostering cross-sectoral collaboration, and integrating climate and poverty objectives, EI programs can play a pivotal role in achieving climate resilience and poverty alleviation. The CREI framework provides a set of This integration is essential for effectively principles and program areas that illustrate advancing climate resilience and poverty how economic inclusion programs can alleviation. contribute to CRD. However, to drive a transformative shift toward climate-resilient • Collaboration: Support collaboration economic inclusion, program operational among relevant departments, partners, adjustments are essential, supported by a and ministries, such as social protection, robust innovation and learning agenda, with agriculture, and environment, to facilitate scale-up made possible through sustainable effective CREI integration at both policy financing. To realize the full potential of these and program levels. Forge partnerships programs for CRD, several issues are critical with NGOs and private entities, especially for policymakers and practitioners to consider. those with the capacity to address climate and poverty challenges. • Focus on climate-poverty nexus: Prioritize programs and interventions that directly • Inclusive planning: Ensure the target the climate-poverty nexus. These participation of marginalized and climate- programs should integrate into national vulnerable groups in the design, planning, climate and environmental policies and and implementation of CREI initiatives. strategies while fostering cross-sectoral This approach fosters program ownership collaboration. and long-term sustainability. • Strategic integration: Incorporate CREI • Evaluative learning agenda: Establish principles and program areas strategically an evaluative learning agenda to gain a within program objectives, design deeper understanding of the impact of features, and outcome measurements. climate-resilient EI. Investigate specific The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 28 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs responses and activities that effectively for CREI programs. These mechanisms achieve climate objectives within EI can generate funds that support climate programs. Explore strategies for integrating resilience and poverty alleviation. climate and poverty objectives in various contexts, such as urban areas, and • Concessional finance expansion: Recognize for specific vulnerable groups such as the importance of concessional finance women and internally displaced persons. in supporting CREI initiatives. Prioritize Develop robust criteria for evaluating grant financing and debt instruments program success, including indicators for linked to climate and nature outcomes, poverty reduction, climate resilience, and particularly for countries already burdened sustainable development. with high levels of debt. • Innovative financing mechanisms: Explore innovative financing mechanisms, such as tourism levies, carbon taxes, and carbon credits, as potential funding sources The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 29 Introduction The Paradigm Pathways to Climate-Resilient Recommendations Appendix Shift to Climate-Resilient Economic for Policymakers Climate-Resilient Economic Inclusion and Practitioners Development Inclusion Programs Appendix The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 30 Appendix Selected World Bank Climate-Resilient Economic Inclusion Programs The examples in this note are based on the analysis of the World Bank portfolio conducted by PEI in 2023. It identified 295 EI programs, of which 184 (62 percent) responded to climate-related challenges. A total of 15 programs were identified as climate-purposed, strongly aligning to the CREI framework. These programs address the nexus of climate and poverty by incorporating CREI principles and program areas that promote climate-resilient outcomes. Programs were selected to ensure representation across various contexts and operational features and to include different regions, World Bank Global Practices, potential cross-sectoral collaborations, and the three program areas (adaptive safety nets, food and ecological systems, and green jobs and the green transition). Table A1 lists the selected projects. Table A1 Selected World Bank-financed Projects Global Project Cross-GP Program Area/Project Country Region Practice Code Collaboration (GP) Adaptive Safety Nets Republic of Congo Lisungi Emergency Congo, Rep. Sub-Saharan P174178 SPJ EDU HNP COVID-19 Response Project Africa Social Support for Resilient Livelihoods Malawi Sub-Saharan P169198 SPJ FCI Project (SSRLP) Africa Niger Sub-Saharan P166602 SPJ FCI Niger Adaptive Safety Net Project 2 Africa Productive Safety Net for South Sudan Sub-Saharan P177663 SPJ FCV Socioeconomic Opportunities Project Africa Food and Ecological Systems Innovation for Resilient Food Systems Bolivia Latin America P175672 AGF WAT (Alianzas Rurales-PAR III) Project and the Caribbean Landscape Restoration and Resilience Burundi Sub-Saharan P160613 ENB AGF URL Project Africa Chad Local Development and Chad Sub-Saharan P171611 ENB WAT Adaptation Project Africa Climate-Resilient and Inclusive Congo, Rep. Sub-Saharan P177786 ENB AGF SSI Livelihoods Project (ProClimat Congo) Africa Ethiopia Resilient Landscapes and Ethiopia Sub-Saharan P174385 ENB AGF CLC EAE Livelihoods Project II Africa The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 31 Table A1, continued Global Project Cross-GP Program Area/Project Country Region Practice Code Collaboration (GP) Lowlands Livelihood Resilience Project Ethiopia Sub-Saharan P164336 AGF ENB SPJ WAT Africa Emergency Resilient Agriculture for Haiti Latin America P177072 AGF AGF Food Security Project and the Caribbean Jordan Rural Livelihoods in Lagging Jordan Middle East P167946 AGF FCI SSI WAT Regions Project and North Africa Green Jobs and Green Transition RESILAND CA+ Program: Kyrgyz Central Asia Europe and P177407 ENB AGF SPJ URL Republic Resilient Landscape Central Asia WAT Restoration Project Costa Rica Sustainable Fisheries Costa Rica Latin America P168475 ENB FCI SPJ TDD Development Project and the Caribbean Urban Productive Safety Net and Jobs Ethiopia Sub-Saharan P169943 SPJ GEN JOB POV Project Africa URS Note: AGF = Agriculture and Food; CLC = Climate Change; EDU = Education; EAE = Energy and Extractives; ENB = Environment and Natural Resources and Blue Economy; FCI = Finance, Competitiveness, and Innovation; FCV = Fragility, Conflict, and Violence; GEN = Gender; HNP = Health, Nutrition, and Popu- lation; POV = Poverty; SPJ = Social Protection and Jobs; SSI = Social Sustainability and Inclusion; TDD = Transport; URL = Urban Resilience and Land; WAT = Water. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 32 Notes The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 33 Notes 1. PEI’s framework draws on the IPCC’s framework for CRD and the World Bank’s GRID framework, both of which target human systems transition through development interventions that combine poverty objectives with climate adaptation and mitigation objectives. Both are premised on development approaches that enhance justice and inclusivity to help ensure that development programs are successful and the potential for climate-resilient outcomes is enhanced. 2. Landscape approaches recognize the interdependence of human and natural systems and create sustainable landscapes that promote prosperity. They require a variety of stakeholders at different levels to work together to increase synergies between different, and often competing, sector-focused goals, such as avoiding agricultural encroachment on protected areas. 3. This section primarily reviews the experience of World Bank-financed projects, based on internal portfolio data, whereas the forthcoming State of Economic Inclusion report will provide a global landscape, including those programs led by NGOs. 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Washington, DC. World Bank. 2023b. Emergency Resilient Agriculture for Food Security Project (P177072). Project Appraisal Document. Washington, DC. World Bank Group. 2021. World Bank Group Climate Change Action Plan 2021–2025: Supporting Green, Resilient, and Inclusive Development. Washington, DC. http://hdl. handle.net/10986/35799. The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion 39 The Partnership for Economic Inclusion (PEI) is a global partnership with a mission to support the adoption of national economic inclusion programs that increase the earnings and assets of extremely poor and vulnerable households. PEI brings together global stakeholders to catalyze country-level innovation, advance innovation and learning, and share global knowledge. PEI is hosted by the Social Protection and Jobs Global Practice of the World Bank. In Practice The Partnership for Economic Inclusion | In Practice | Pathways to Climate-Resilient Economic Inclusion