It seems that fighting poverty isn’t a one-way ticket. In some parts of the world, such as Indonesia, moderate constant cash transfers to poor households returned the favor: a deforestation reduction of about 30%.
The conclusion belongs to a first-of-its-kind study dedicated to answering a decades-old question: what would be the impact of conditional cash transfer (CCT) programs on the environment. “Resolving this debate is important because lots of poor people are found in the same areas where we find the most endangered ecosystems, like the rainforest,” said Paul Ferraro, an author of the study from Johns Hopkins University.
Still, there are countries, such as Mexico, where the CCT program led to a growth of environmental damage. lower poverty means increased beef consumption. Increased beef consumption means an increased need for pastures, which led to deforestation.
What is a conditional cash transfer program?
CCTs are governmental or charity programs that transfer money to poor people under certain conditions. Usually, the conditions are for the people’s best interests, just like money is. Enlisting children into public schools, getting regular health check-ups, or receiving vaccinations. CCTs’ goals are breaking the cycle of poverty and the feminization of poverty.
Each country has a different program. Meaning people have to meet different criteria to become eligible for the program.
Indonesia has two CCTs, both established in 2007. One is a household CCT program, and the second is a community-based CCT program. Both of them are fighting to reduce poverty, maternal and child mortality, and to enhance basic education.
In Mexico, the anti-poverty program belongs to the Mexican government. Created in 1997, the program was one of the first large-scale CCTs. Their goals are education improvement, health, and nutrition of children.
How come CCT in Indonesia led to decreased deforestation?
Unintentionally. According to Ferraro, “environmentalists assume that if you give money to poor people around the rainforest, you give them greater needs or the means with which to further degrade the forest.”
To understand whether this assumption is right or wrong, Ferraro and his team decided to look closely at one of the countries “that is a high priority for environmental protection: Indonesia.” Indonesia has the third-largest tropical forest area in the world.
10% of the population of Indonesia live under the poverty line. This generated an overwhelming 20% of the world’s entire deforestation between 2000 and 2012. As a result, Indonesia became guilty of being one of the world’s largest emitters of greenhouse gases.
However, since 2008, as a direct result of the CCT program, deforestation began being reduced. Eventually, the drop went to almost 30%, the study concluded. 260.000 households, in 7500 villages from forested areas, received transfers that covered 15 to 20 % of their consumption.
The impact on the environment was “surprising given that the cash transfers were not contingent on reducing deforestation and there were many possible economic paths through which the cash might have had deleterious effects on the forests,” Ferraro said.
What about Mexico and the growth in environmental damage due to the CCT program?
Ferraro’s study has its limits. Being the first-of-its-kind, it can’t be considered exhaustive. Further studies and/or meta-analysis might prove Indonesia to be an exception. Or, maybe Mexico is the exception. The only sure thing is that further studies are necessary.
Several other countries that struggle with poverty and the fight of it through CCTs are: Argentina, Bangladesh, Brazil, Cambodia, Chile, Colombia, Egypt, Guatemala, Honduras, Jamaica, Nicaragua, Panama, Peru, Philippines, Morocco, Turkey, South Africa, and the US.
Since CCTs aren’t structured to be environment friendly, further results can’t be predicted. But if there is a chance for the fight against poverty to join forces with the fight for preserving the environment, then the research is worthy.