Summary: This year, GiveDirectly and the Scottish Government Climate Justice Fund sent $750 no strings attached to over 2,600 families in Malawi’s Nsanje District displaced by 2023’s Cyclone Freddy, helping them rebuild their lives and demonstrating how direct cash can address climate loss & damage globally.
Developing countries suffer $400 billion a year in climate loss & damage; direct cash is a solution
As climate change worsens, countries that contribute the least to global emissions are suffering the most. “Loss & damage” refers to the negative impacts that occur despite efforts to reduce emissions and adapt to the changing climate. This includes economic losses like damaged infrastructure or lost homes and non-economic losses like death, displacement, and destruction of social and cultural heritage.
Climate loss & damage costs developing countries $400 billion a year and could rise to $1 trillion a year by 2050. The largest polluters are beginning to recognise their moral responsibility for these losses, most notably through the establishment of a UN Fund for Loss & Damage at COP28. The next challenge is ensuring the most affected communities receive direct support tailored to their recovery needs.
A new direct cash program from GiveDirectly, the Scottish Government, and the Government of Malawi shows how large, unconditional cash transfers provide a localised and adaptable response to climate loss & damage.
We delivered $750 to over 2,600 Cyclone Freddy survivors
In March 2023, Cyclone Freddy dropped six months’ worth of rainfall in six days in Malawi’s densely populated southern region, triggering floods and mudslides that displaced 659,000 people, destroyed 440,000 acres of farmland, and led to the loss of 1.4 million livestock. This low-lying area, prone to flooding, is frequently affected by extreme weather, prompting the Government of Malawi to declare some land uninhabitable and move over 23,500 families to safer locations.
In support of this government initiative, GiveDirectly and Scotland’s Climate Justice Fund, provided $750 as direct unconditional cash transfers through mobile money to over 2,600 families from the 50 villages hardest hit in Malawi’s Nsanje District. These families, living in temporary displacement camps could use the cash to relocate and rebuild their lives and livelihoods. The project aims to demonstrate how direct cash works as a solution for loss & damage and promote climate justice on a global scale.
Direct cash empowers families and communities
Cash transfers acknowledge the breadth and complexity of climate-linked loss and damage, giving families the freedom to rebuild their lives in ways that are most meaningful to them and empowering communities to develop their own solutions for recovery.
This is why we enrolled entire displaced communities rather than only some individual families, the norm for other emergency relief aid programs. Enrolling every family from a displaced village helps support community cohesion and structures, which are vital for mental well-being and social connections as they rebuild their lives.
“When we called for parent meetings before the cash transfers, they wouldn’t attend, because they couldn’t afford the school items for their children. Now they attend and provide their children with food, uniforms, clothes, instruments, notebooks, and pens. This has helped improve their concentration and performance in class and reduced absenteeism rates. During our first days here, at least 15 to 20 students would be absent in a day, but now only 3 to 4 students miss classes.” – Taibu Yuwa, Makhanga Secondary School, Manthenga Village
Families chose to spend on both immediate needs and long-term recovery
- 96% of families reported spending on productive assets (e.g., fertilizer, education, livestock, a new home or business). The number of families with livestock doubled from 522 to 1,178.
- The average weekly income increased by 31%, from MWK 5,459 ($3.15) to MWK 7,153 ($4.15).
- Individuals reporting going hungry so others in their family could eat decreased from 75% before cash to 46% after.
The cash transfers benefited more than just the recipients, creating jobs for neighbors who sold materials or offered building services. In other contexts, researchers have quantified GiveDirectly’s economic multiplier as 2.5x, meaning that every $1 of cash we deliver generated $2.50 in additional spending or income for the larger economy.
“There was quite a huge amount of trading taking place. Other people were benefiting, as [recipients] were able to buy from them, thereby stimulating local economic development.” – Moses Chimphepo, Director of the Department for Disaster Management Affairs
We overcame obstacles to target and enroll displaced families
We had to pivot from enrolling formal displacement camps to informal relocation sites. We’d intended to enroll families living in displacement camps, but by the time we launched, the government had decommissioned the camps and families had started to relocate. So we pivoted to enrolling displaced communities that had relocated together to new sites.
We then ensured our program wouldn’t create conflict between relocated families and their host community. Families already living in an area receiving displaced families—known as “host communities”—may believe they own the land being used by these new families, so demand compensation. To avoid worsening such conflicts, we only enrolled areas where relocated families had documented approvals from the government and local leaders to use the land, coordinating with them to sensitive host communities ahead of the program starting.
We also had to help 1 in 6 families get national IDs to enroll in mobile money. 460 families did not have any members with the national ID required for setting up a mobile money account, so we worked with Malawi’s National Registration Bureau (NRB) to register and distribute IDs for these communities. This delayed us by 3-months, as the NRB had ID printing capacity constraints and families were often not on site for enrollment efforts as they traveled to and from their old properties for farming.
Even with these challenges, we were still able to deliver ~80% of our budget as transfers. Few other types of aid put $4 out of every $5 directly in the hands of recipients, and we’d expect to reach even higher efficiency for larger-scale programmes.
We’re calling for more loss & damage funds to be given directly as cash
To donors, governments, and practitioners, these Malawi results should demonstrate that large-scale, unconditional cash transfers to communities hardest hit by climate change effectively empower their recovery.
We believe a significant portion of loss & damage financing should be delivered as direct cash transfers. We aim to make this a central discussion at the upcoming COP29 in Azerbaijan.
Concurrently, we’re interviewing recipients to collect their perspectives on what worked well and what could be improved. We will incorporate these into principles and a practical case study to help others to replicate and scale this approach in response to other climate disasters around the world.
Press & Media on Malawi’s Loss & Damage program
- BBC: Scotland gives climate loss & damage funds directly to Malawians
- Guardian: From Scotland to Malawi: climate survivors are rebuilding with world first loss and damage fund
- Time: The Obvious Solution to Loss-and-Damage Fund Distribution
- Essay: Cash Transfers & Locally-Led Action to Address Loss & Damage