Unlocking climate finance for social protection: an analysis of the Green Climate Fund

ABSTRACT

Social protection has gained increasing attention in global climate policy due to its potential to contribute to low-carbon, just and climate-resilient development. Unlocking climate finance for social protection is critical to realize this potential. Multilateral climate funds established under the United Nations Framework Convention on Climate Change (UNFCCC) can play a particularly important role by financing social sectors where private investments are not attractive. Yet, there is a distinct policy and research gap in understanding the potential and limitations of the UNFCCC financial mechanisms to support social protection in low- and middle-income countries. Taking as a case study the Green Climate Fund (GCF), which is the largest multilateral fund under the financial mechanism of the UNFCCC, we seek to address this gap. First, the study introduces a framework for analysis of the ways climate finance engages with social protection by looking into a comprehensive set of formal social services and transfers provided by the state to individuals, households, and on a collective basis. Second, the study identifies a continuum of entry points for integrating social protection into the GCF’s project portfolio and offers a holistic perspective by capturing climate change mitigation, adaptation and loss and damage. We find that social protection can be instrumental in the design and implementation of GCF projects. In addition, our analysis reveals that the GCF has the potential to support projects that create enabling conditions for integrating climate change considerations into national social protection systems, and that aim at piloting or establishing long-term social protection mechanisms with climate change objectives.

Key policy insights

• Social protection policy frameworks, infrastructure, instruments, and knowledge have supported the design and implementation of mitigation and adaptation projects funded by the GCF.

• The strongest linkages between social protection and climate finance in the GCF’s project portfolio relate to climate services with a growing focus on shock-responsive social protection.

• Rural livelihood projects were the most common in the project portfolio though several projects demonstrated the potential for the GCF to support housing-related social protection in urban contexts.

• The study did not identify any mitigation-only projects that invest in adapting social protection systems, yet several projects demonstrate entry points towards that end.

KEYWORDS:

• Adaptation
• climate fund
• just transition
• loss and damage
• mitigation
• resilience

1. Introduction

Social protection policies and mechanisms are central to achieving the 2030 Sustainable Development Agenda and ensuring a just transition towards environmental sustainability and climate resilience (Malerba, 2021). The term broadly refers to systems and their elements (e.g. policies, delivery mechanisms, institutions) aimed at reducing multidimensional poverty, inequality, and socio-economic vulnerability (ILO, 2017; Loewe & Schüring, 2021). Safeguarding sustained financial flows and identifying additional sources of finance are fundamental for the functioning and strengthening of social protection systems in a changing climate. Traditionally, international support for social protection initiatives in low- and middle-income countries (LMICs) has been primarily in the form of humanitarian aid and official development assistance (ODA). The latter remains insufficient given the current social protection financing gap of an estimated USD 41.9 billion for the year 2020 for just low-income countries (Durán-Valverde et al., 2020) – a figure, which does not capture the additional costs emerging from the future impacts of climate change on social protection systems.

Multilateral climate funds established under the United Nations Framework Convention on Climate Change (UNFCCC) have distinct advantages for providing climate finance, including specialization in climate change, and investment in social sectors in which the public sector plays a leading role and private investments are not attractive, although some funds, particularly the GCF, also aim to mobilize private sector finance to support these goals, with varying success (Kalinowski 2023; Stoll et al., 2021). They are particularly critical for Least Developed Countries (LDCs) and Small Island Developing States (SIDS), which often lack access to other sources of climate finance (Kuhl, 2021). Though independently these funds will not be able to address the significant financing gap for social protection, through their catalytic role (Kasdan et al., 2021) they may unlock additional sources of finance. Essentially, these funds are instrumental in the implementation of the UNFCCC and the Paris Agreement. The latter emphasizes and recognizes the need to implement adaptation and mitigation ‘in the context of sustainable development and efforts to eradicate poverty’ (UNFCCC, 2015). Social protection can address vulnerabilities including reducing income poverty and social inequality (though there is less evidence for the latter) and contribute to human development (Costella et al., 2023; Rana et al., 2022), which points to the relevance of social protection for achieving dual climate and development objectives.

Social protection has gained increasing attention under the UN climate change regime, as evidenced by the inclusion of this policy area in several decision texts agreed upon at the 28th session of the Conference of the Parties (COP28) to the UNFCCC in December 2023. The decision on the operationalization of the new loss and damage funding arrangements, including a fund, calls for increased ‘support for adaptive social protection mechanisms’ by multilateral development banks and other organizations (UNFCCC, 2023a, p. 17). Social protection was also addressed in the Just Transition Work Programme, with the text acknowledging its potential ‘to mitigate potential impacts associated with the transition’ and to facilitate the transition of ‘the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities’ (UNFCCC, 2023b, p. 2). In addition, in the UAE Framework for Global Climate Resilience, countries are urged to reduce ‘the adverse effects of climate change on poverty eradication and livelihoods, in particular by promoting the use of adaptive social protection measures’ by 2030 (UNFCCC, 2023c, p. 2). This outcome raises the significance of the UN climate funds for supporting social protection in the future because the Green Climate Fund (GCF) and the Global Environment Facility (GEF) (as managing entity for the Special Climate Change Fund (SCCF) and the Least Developed Countries Fund (LDCF)) were explicitly requested to consider the framework and support Parties in achieving the global goal on adaptation (UNFCCC, 2023d, 2023e).

An important question, therefore, is to what extent existing UN climate funds could support investment in social protection. However, there is a lack of attention in both academic literature and policy discourses on the potential and limitations of the UNFCCC financial mechanisms to support social protection interventions, as the latter are conventionally considered matters of humanitarian and development assistance. While there has been an increasing academic interest in the synergies between social protection and climate action, an in-depth analysis of the role of the UNFCCC financial mechanism in funding social protection is needed. In particular, this research contributes new insights on two key issues. First, the study introduces a framework for analysis of the ways climate finance engages with social protection. Second, it provides an empirical examination of social protection interventions financed through the GCF, including climate change mitigation, adaptation, and loss and damage to illustrate the value of the framework.

The analysis looks into a comprehensive set of social services and transfers provided (or coordinated) by the state to individuals, households, and on a collective basis. These include social assistance including non-contributory social transfers (cash transfers, family allowances, subsidies, and fee waivers), housing support, social services and public employment programmes; social insurance; labour market interventions (e.g. unemployment benefits, active labour market policies, regulations for safe working conditions, skills development); and state services provided on a collective basis (e.g. policies and legislation, and research and development) (Carter et al., 2019; Loewe & Schüring, 2021; OECD, 2019).

The paper is organized as follows. We first develop an analytical framework to explore the alignment of social protection with climate finance based on a review of the literature (Section 2). We then detail the methodological approach (Section 3) and explore the ways projects funded by the UN climate funds engage with social protection by applying the framework to the GCF as a case study (Sections 4 and 5). Finally, we outline key conclusions and discuss emerging issues for research and policy (Section 6).

2. Theoretical foundations and analytical framework

Several emerging concepts have established linkages between social protection and climate action. The Adaptive Social Protection framework conceptualized by Davies et al. (2008) establishes four core social protection functions that link social protection, climate change adaptation and disaster risk reduction. These functions are (1) protective – ex-post coping strategy in response to the impact of climate shock, (2) preventive – ex-ante coping mechanism to mitigate risk; (3) promotive – ex-ante interventions that support resilience by strengthening adaptive capacities; and (4) transformative – measures that can transform social relations and reduce structural vulnerabilities (e.g. social inequality). More recently, others have examined social protection in the contexts of response to climate shocks and anticipatory action (Costella et al., 2017; Oxford Policy Management, 2015; Ulrichs et al., 2019), climate change adaptation and resilience (Agrawal et al., 2019; Kundo et al., 2021; Kuriakose et al., 2013; Sengupta & Costella, 2023; Tenzing, 2020), loss and damage (Aleksandrova & Costella, 2021; Huber & Murray, 2023), and wider climate action (mitigation, adaptation and resilience) (Aleksandrova, 2020; Costella et al., 2023; Malerba, 2021; Nenning et al., 2023). Overall, there is consensus in the literature that social protection systems with integrated climate considerations have the potential to reduce climate vulnerability and contribute to low-carbon and climate-resilient development (Costella et al., 2023; Malerba, 2021; Rana et al., 2022), but less clarity on the extent to which climate finance can support these goals.

Based on the literature, we define four main channels towards that end. First, social protection systems can enable climate projects because they offer an institutional and policy environment that can support the design and implementation of project activities. Social protection policy frameworks can be used to identify national priorities for climate responses. Disasters and climate-related shocks are often mentioned in national social protection strategies (Cookson et al., 2024). Social (or beneficiary) registries are important components of national social protection infrastructure that can enable climate projects because they provide information about economically and socially marginalized individuals and households. In some countries, social registries are linked to other information systems such as humanitarian and disaster risk management systems (Chirchir, 2021). Social registries have also enabled major subsidy reforms in the energy sector (e.g. in Indonesia) to better target the most vulnerable (Beaton et al., 2017). The institutional knowledge and capacities gained from the implementation of poverty reduction measures can also enable climate projects. Since national climate strategies incorporate poverty eradication objectives (UNFCCC, 2023f), synergies with past or present social protection programmes at the project level could leverage this expertise and co-benefits.

Second, social protection systems are top-down mechanisms for channelling support to vulnerable populations, and therefore, existing schemes could serve as instruments to implement project activities. Various studies have highlighted the interlinkages between social protection programmes and key development sectors addressed by climate projects, including positive impacts on coping with climate hazards, health, food security, energy access, multidimensional poverty and wellbeing, and investment and accumulation of productive assets (e.g. Abay et al., 2022; Agrawal et al., 2019; Bastagli et al., 2019; Borga & D’Ambrosio, 2021; Fitrinitia & Matsuyuki, 2022, 2023; Malerba, 2021, 2023; Shigute et al., 2019; Tadesse & Zeleke, 2022; Ulrichs et al., 2019). In disaster contexts, the presence of adequate social protection coverage and institutional capacities have allowed existing programmes to be used to channel additional support to registered beneficiaries or to temporarily add disaster-affected groups to an existing programme, which have also been associated with lower transaction costs (Cherrier, 2021). Social protection has also been used to compensate for the negative impacts of climate interventions (Costella et al., 2023; Dercon, 2014; Malerba, 2021), which points to the relevance of social protection for addressing the risks of maladaptation associated with climate projects.

Third, climate finance can have a pivotal role in supporting projects aimed at strengthening social protection systems. Enhanced knowledge and institutional, policy and legal frameworks with clear climate goals are key enablers of climate-resilient development (IPCC, 2022). Institutional transformation of social protection programmes and systems is necessary for the effective integration of social and environmental objectives (Béné et al., 2018; Norton et al., 2020). Entry points include climate-informed planning through the provision of climate services and establishing linkages with early warning systems; an improved institutional, policy and regulatory environment through the integration of climate risk considerations in sectors relevant to social protection; promotion of institutional coordination; and enhanced knowledge and finance (Aleksandrova, 2020; Aleksandrova & Costella, 2021; Kuriakose et al., 2013; Sengupta & Costella, 2023; Tenzing, 2020).

Fourth, climate finance can support projects that establish innovative social protection mechanisms by transforming existing social protection programmes or instruments or designing pilot initiatives that generate knowledge for scaling up and replication. Empirical evidence on developing and implementing effective climate-responsive social protection interventions in LMICs remains limited (Arena et al., 2023; Costella et al., 2023), but various opportunities for innovation exist. Some social protection instruments have been integrated into climate change adaptation interventions through modifications of existing programmes or the introduction of new ones (Bowen et al., 2020; Kundo et al., 2021). Climate-induced human mobility is a particular area where social protection, such as employment in public works schemes, skills development, and provision of social housing, could facilitate voluntary migration, manage distress migration, and support trapped populations (Schwan & Yu, 2018; Silchenko & Murray, 2023). Social protection programmes have also been linked to reduced CO₂ emissions, environmental protection and restoration (e.g. Hirvonen et al., 2022; Malerba, 2020; Norton et al., 2020; Woolf et al., 2018), and management of the potential negative impacts on job markets associated with economic and structural low-carbon transformations (ILO, 2021; Malerba, 2021; Malerba & Wiebe, 2021).

The above-discussed linkages illustrate a continuum of entry points for engaging climate finance with social protection, which we use as an analytical framework for this study (Figure 1). On the left-hand side of this continuum are projects in which social protection is an enabler and tool for the implementation of funded climate actions. As the continuum progresses, social protection is more fully integrated into climate finance frameworks, in particular by unlocking climate finance for adapting social protection systems to climate change.

Figure 1. Continuum of ways climate finance engages with social protection. Source: Authors.

Multilateral climate funds have different strategic and funding frameworks. Nevertheless, the main funds under the UNFCCC share common features including: investing in projects with clear climate objectives that address the needs of the most vulnerable communities; contributing to the implementation of national climate strategies and plans in alignment with national sustainable development and poverty reduction strategies; strengthening early warning and climate information systems, institutions, capacities and knowledge to enable climate action; and catalysing innovation (Table 1). These provide a basis for exploring linkages with social protection.

Table 1. Thematic coverage, size and selected strategic priorities of the main financial mechanisms of the UNFCCC.

Fund	Thematic coverage	Strategic priorities (selected examples with relevance to social protection)	Overall funding
GEF Trust Fund, LDCF and SCCF (managed by the GEF)	Mitigation (GEF Trust Fund); Adaptation (LDCF); adaptation and technology transfer (SCCF)	The GEF-8 (2022–2026) climate mitigation strategy aims to promote innovation and support enabling policies for mitigation options with systemic impacts. The GEF-8 strategy for the LDCF and SCCF seeks to address systemic barriers to adaptation through transformation including strengthened policy coherence, governance, and knowledge. Improved institutional capacities for the design and implementation of integrated adaptation projects as well as early warning and climate information systems are distinct themes in the strategy.	GEF-8 (GEF Trust Fund): USD 852 million LDCF: USD 1.8 billion SCCF: USD 356 million
Adaptation Fund	Adaptation	The medium-term strategy of the Adaptation Fund (2023–2027) envisages support to programmes with strong potential for innovation and projects that generate evidence for successful innovation. A guiding principle of the Fund is to support country-driven projects based on national sustainable development and poverty reduction strategies.	Over USD 1 billion
GCF	Mitigation, adaptation	The Strategic plan for the GCF (2024–2027) prioritizes, among other activities, funding with a focus on just transitions to achieve economic and non-economic co-benefits, climate information and early warning systems, and activities relevant to averting, minimizing and addressing loss and damage including testing novel instruments. Country ownership, contribution to the creation of an enabling environment, sustainable development potential, and impact on the most vulnerable people and communities are prominent elements within the investment framework of the GCF.	USD 13.5 billion (committed)

Source: Authors (based on a review of Adaptation Fund (2022); GEF (2022); GEF (2024); GEF (n.d.); UNFCCC (2006); GCF (2020); GCF (2023); GCF (2024)).

3. Methods

3.1. Case study

The research used the GCF as a case study to apply the proposed framework. The GCF is an operating entity of the Financial Mechanism of the UNFCCC. Operational since 2015, the fund has two project funding modalities – Simplified Approval Process (SAP) projects and full funding proposals (FP). The SAP offers a simpler and faster application procedure for micro- and small-size projects of up to USD 25 million of GCF funding. Full project proposals range in size from USD 5 to 378 million. The GCF funding for approved projects reached USD 13.5 billion (8.5 billion grant equivalent) in December 2023, including 54% for adaptation and 46% for mitigation (in grant equivalent terms), of which USD 4 billion has been disbursed to date (GCF, 2024). The GCF can be accessed by public or private international, regional, and national accredited entities. It supports mitigation, adaptation and cross-cutting (including both mitigation and adaptation objectives) projects across eight results areas: (1) health, food and water security, (2) livelihoods of people and communities, (3) infrastructure and built environment, (4) ecosystems and ecosystem services, (5) energy generation and access, (6) transport, (7) buildings, cities, industries and appliances, (8) forests and land use. Proposals are evaluated based on six investment criteria: (a) impact potential, (b) paradigm shift potential, (c) sustainable development potential, (d) needs of the recipient, (e) country ownership, and (f) efficiency and effectiveness. In addition, finance for loss and damage is channelled through projects with the potential to reduce loss of lives and assets due to climate extremes through climate services, early warning systems, community-based disaster risk reduction, food security, infrastructure, and ecosystem-based approaches (UNFCCC, 2022).

This study focuses on the GCF for several reasons. First, the GCF plays a particularly important role in the climate finance landscape because of its mandate to support climate mitigation and adaptation in LMICs and its position as the largest multilateral fund under the UNFCCC (Garschagen & Doshi, 2022). Second, as indicated in the updated 2024–2027 Strategic Plan, the GCF will likely be essential for implementing the work programme on just transitions (GCF, 2023). Third, the GCF is considered a potential provider of finance for loss and damage ‘to the extent consistent with the existing investment, results framework and funding windows and structures’ (UNFCCC, 2020, p. 14) and most activities related to averting, minimizing and addressing loss and damage have been financed through the GCF’s adaptation window (Kempa et al., 2021). The Updated Strategic Plan identifies commitments in the fields of integrated risk management and parametric insurance, strengthened focus on locally led adaptation, climate information and early warning systems, and enhanced catalytic impact (GCF, 2023), all of which have relevance for social protection and which could uniquely position the GCF as a leader on the integration of climate change and social protection.

3.2. Project selection and content analysis

We examined the project portfolio of the GCF using a three-stage content analysis. First, we identified projects approved between 2015 and December 2023, including both SAP projects and full funding proposals for a total of 243 projects (Table 2). We then screened the proposals for relevant keywords using ATLAS.ti software (version 9.1.4.0). The keywords were determined based on common terms for social protection used in academic and policy literature like ‘social security’, ‘safety net’, ‘social assistance’, ‘public works’, ‘employment guarantee’, ‘labour policy’, and ‘social housing’ (see Section 1 and Supplemental material, Table A.1 for the full list). Subsidies (indirect social transfers used to lower costs for the poorest households) and micro-insurance are often considered social protection instruments due to their complementary role in extending the risk coverage of state social protection support (Loewe & Schüring, 2021). These were considered only when explicitly linked to national social protection programmes since this study focuses on formal social protection provided or coordinated by the state, e.g. provision of subsidies for access to micro-insurance through a state social protection mechanism.

Table 2. Sample selection.

Methodological step	Number of projects
Total projects screened for keywords	243
Total projects with detected one or more keywords	155
Total projects with detected keyword(s) considered not relevant	122
Projects excluded due to insufficient information to determine relevance	7
Total projects considered relevant to the study, out of which:	26
Social protection as a tool and enabler of climate projects	16
Projects that invest in adapting social protection systems to climate change	10

Source: Authors.

In total, 155 approved projects contained one or more keywords. As a second step, we reviewed the sections with identified keyword(s), and in some cases, full documents were manually screened to determine the relevance of the project. Building upon the analytical framework of the study (Figure 1), we used a set of criteria to identify projects with social protection elements, e.g. social registries used to identify project beneficiaries, and enhanced institutional capacities defined as project activity (see Supplemental material, Table B.2.). In particular, projects were considered relevant if they met at least one of the criteria. In total, 122 projects out of the 155 were considered not relevant despite containing a keyword. In most cases, keyword(s) appeared in the background information or in the names of institutions. In other cases, terms like ‘social protection’ and ‘safety net’ were used in ways that did not reflect social protection systems, e.g. in some proposals these terms referred to the conservation of natural resources (as a safety net), community savings groups (as an informal safety net), income diversification (as social protection), food banks for emergency situations, or microfinance (as social protection). Thirty-two of the excluded 122 projects contained key word(s) mainly when referencing institutions (e.g. Ministry of Public Works). Seven other projects contained elements that suggested a link to social protection in the context of climate services, social housing, disaster risk reduction and relocation, and subsidy schemes for uptake of green technology but contained insufficient information to determine relevance. In these cases, references to social protection-related activities were vague or framed as ‘may’, ‘could’ or ‘e.g.’ and not explicitly set as a project objective, activity or outcome. Finally, while several projects aimed at strengthening the capacities of public works ministries to climate-proof public works projects for green and grey infrastructure, these were considered relevant only when there was an explicit link to a formal social protection mechanism such as a public employment scheme.

The third step involved a detailed review and analysis of the identified 26 relevant projects. Sixteen projects positioned on the left-hand side of the continuum were explored to define the role of social protection in enabling and facilitating adaptation and mitigation activities. In addition, an in-depth examination of 10 projects that pointed to investment in social protection (i.e. those positioned on the right-hand side of the continuum) was conducted to identify areas of strength and innovation in climate-related social protection and early models that could be expanded, as well as the potential role of the GCF in supporting the transformation of social protection systems towards resilience. It is important to note that some projects included components representing different categories on the continuum, e.g. they used social registries as enablers and social protection as an instrument to implement project activities. In such cases, we coded them in the category furthest along the continuum with the objective of identifying projects that established stronger synergies between climate finance and social protection (i.e. in the prior example, the project was coded as using social protection as an instrument). Detailed descriptions of the data, methodology and identified projects are provided in the Supplemental Material.

3.3. Limitations

The results should be interpreted with caution due to several challenges and limitations. First, the study used approved project proposals as a data source. It is possible that social protection elements evolved with the implementation of projects or featured in early versions of project proposals and, for various reasons, not in the final designs of approved projects. Secondly, we acknowledge that other terms like ‘subsidy’, ‘cash for work’ and ‘cash transfer’ could also indicate a link to social protection. However, these terms were commonly used in the proposals in different contexts, e.g. agricultural subsidies for farmers, subsidies for suppliers to enable affordability of energy-efficient stoves, or cash transfers for project activities. Our assumption was that if such instruments were linked to national social protection mechanisms and met the requirements for relevance for the research this would be captured by one or more of the keywords, particularly given the GCF investment criteria of country ownership, which asks proposals to speak to the linkages to national programmes and policies. Thirdly, it was difficult to determine the relevance of some projects as described above and detailed in the Supplemental Material. In addition, the software could not always read tables in the PDF files. Lastly, social protection programmes with non-English names were not always detected, and thus it is possible that the analysis under-reports potentially relevant results.

4. Results

4.1. Social protection as a tool and enabler of climate projects

Sixteen projects referred to social protection as a tool and/or enabler of climate projects only (Table 3). The earliest project dated back to 2015 (FP012, Senegal). Most projects in this category were micro (up to 10 million USD), small (up to 50 million USD) or medium (up to 250 million USD) size adaptation projects accessed through international organizations, although FP012 was through a nationally accredited entity.

Table 3. Summary of results.

Category (number of projects)	Description
Social protection as enabler (12)	Social registries supported the identification of project beneficiaries targeting: food security and hydro-meteorological weather warning services in rural areas (FP026, Madagascar; FP067, Tajikistan – adaptation); access to energy-efficient technology in rural areas (SAP014, Armenia; cross-cutting); and access to adaptation grants in the context of water sector resilience (FP062, Barbados; cross-cutting) National policy frameworks with social protection objectives were used to align projects with national priorities (FP003, Senegal; FP026, Madagascar; FP109, Timor-Leste; FP206, Bangladesh – adaptation) Project activities built upon or created synergies with past/present social protection programmes in relation to productive safety net and adaptive social protection approaches in rural areas with a focus on climate services, food security and natural resource management (FP058, Ethiopia; FP069, Bangladesh; FP074, Burkina Faso – adaptation; FP136, Ethiopia; cross-cutting)
Social protection as instrument (4)	Public work schemes were used to implement disaster risk reduction measures (FP068, Georgia; SAP026, Bangladesh – adaptation) A climate-responsive water tariff to tackle reduced freshwater availability that takes into consideration potential negative price effect on the poor was piloted (FP059, Grenada; adaptation) Targeted subsidies/grants under existing social support schemes were used to promote energy efficiency in the social housing sector (FP010, Armenia; mitigation)
Projects that strengthen social protection systems (7)	Project activities aimed to integrate climate risk into agriculture and rural development programmes (such as productive safety net programmes) with social protection components (FP49, Senegal; SAP007, Zimbabwe; and SAP002, Kyrgyzstan – adaptation; FP201, The Philippines – cross-cutting). Public works schemes and social transfers were used in some projects as tools to implement project activities, which engaged the most vulnerable labour-active people (risks of excluding labour-inactive and constrained people were reflected in some of the proposals). One of the projects makes explicit reference to loss and damage in relation to potential for learning (FP049) Project activities aimed to link social protection with climate services and early warning systems (SAP010, the Philippines; FP215, Multi-country project: Cambodia, Indonesia, Lao PDR, Pakistan, Papua New Guinea, Timor-Leste, Vanuatu – adaptation). Through FP215, the GCF enabled the Community Resilience Financing Partnership Facility (established by ADB) to provide finance for the development of climate risk-informed social protection systems in target countries through individual projects with a focus on capacity building (e.g. developing adaptive and shock-responsive social protection systems; provision of technical equipment; and training). Funds may be used to design innovative schemes or to expand existing programmes in the future Project activities aimed at enhancing the institutional and regulatory environment for improved access of low-income households to green and resilient social and affordable housing (FP077, Mongolia; cross-cutting). The proposal highlighted the potential for knowledge and learning including novel policies, instruments and regulations to overcome systemic barriers to social and low-cost housing
Projects that establish innovative social protection mechanism (3)	Project activities aimed at supporting community-based adaptation action through the design of locally defined shock-responsive social protection mechanism (FP184, Vanuatu; adaptation). Activities further sought to generate evidence on the effectiveness of cash transfer mechanisms for responding to climate-related hazards Project activities aimed at developing a social protection instrument linked to environmental protection and restoration initiatives (FP062, Paraguay; FP158, Botswana – cross-cutting): FP062 introduced an additional conditional transfer scheme under the national social protection programme (Tekoporã), to incentivise behavioural change (ecosystem stewardship through reforestation and forest conservation). FP158 aimed to transform an existing public works programme (Botswana Ipelegeng Programme) to support rangelands restoration, improve livestock management and promote ecosystem-based adaptation including through investment in social protection services provided on a collective basis (policies and regulations), a new job creation programme (public works) and skills development. The transformed Ipelegeng job creation programme was expected to help tackle high unemployment and costs of reactive drought relief that persist in the project sites

Source: Authors.

The review revealed that existing social protection institutional and policy structures have supported the design and implementation of 12 adaptation, 3 cross-cutting and 1 mitigation project. Social registries have been used to identify beneficiaries in the energy, water, food security and climate services sectors, and have focused mostly on rural areas. National policy frameworks with social protection objectives have enabled several projects targeting ecosystem restoration and disaster risk reduction. We also found attention to institutional coordination and learning from social protection initiatives in the design of some projects, as well as projects that created synergies with (described as complementary, in convergence with, or in synergy with) or built upon experience from existing or completed social protection programmes. These projects were related to productive safety net and adaptive social protection approaches in rural areas with a focus on climate services, food security and natural resource management. One example was FP136 in Ethiopia. Project activities were described as building upon the results of completed programmes and covering communities graduating and transitioning from support under the Sustainable Land Management Programme and the Productive Safety Net Programme.

Three projects used existing social protection programmes as an instrument for the implementation of mitigation (access to energy-efficient technology in the urban social housing sector) and adaptation (public works for disaster risk reduction) activities within the duration of the project. In addition, we found evidence of ways that social protection could be used as a tool to address the risk of maladaptation associated with projects, although it was not framed as such in the reviewed project documents. A good example was the small-size adaptation project FP059 in Grenada, which addressed risks to the water sector. The project proposed piloting a climate-responsive water tariff to tackle reduced freshwater availability and assessing the effectiveness of a social safety net for the poor to cover water connection fees and monthly water bills. This programme drew on an existing social protection mechanism and ensured that the most vulnerable groups were protected from the potential negative effects of project interventions.

4.2. Investment in adapting social protection systems to climate change

Ten projects contained activities that pointed to investment in adapting social protection systems to climate change, with the earliest approved in 2017 (FP049, Senegal). The projects in this category addressed a wide range of physical climate risks including climate extremes (e.g. tropical storms, floods, landslides, storm surges, droughts) and slow-onset gradual changes (e.g. increasing temperatures, glacier retreat, land degradation and desertification, sea level rise, and salinization). Six were adaptation projects (related to building resilient livelihoods and food security, enhancing early warning systems and disaster risk reduction) and four were cross-cutting projects supporting social housing in urban areas, promotion of climate-resilient agricultural systems, and rangeland restoration and forest protection. All of them contributed to the ‘increased resilience of people and communities’ result area of the GCF investment framework, and more than half of them to ‘health, food and water security’ (Figure 2). Most projects (except for FP062, FP077, FP158) invested directly in climate services for social protection such as developing local risk and vulnerability assessments and early warning protocols, and building technical capacities of local authorities.

Figure 2. Result areas of GCF projects that invest in adapting social protection systems. Source: Authors.

All 10 projects except one (SAP010) were from internationally accredited entities. The World Food Programme (WFP) had the largest number of projects, specifically three micro-size adaptation projects that promoted productive safety net approaches to social protection. The Asian Development Bank (ADB) has received funding for the only two large-size projects (above 250 million USD), which targeted social housing (FP077, Mongolia) and the development of climate risk-informed social protection systems in multiple countries to enable adaptive and shock-responsive approaches (FP215). Most projects were located across Asia-Pacific with only three in Africa and one in Latin America. A limited number of projects targeted a least developed country or SIDS. In addition, all projects received public sector financing.

Interventions related to strengthening social protection systems included five adaptations and two cross-cutting projects. Most of them (six projects) invested in climate services, improved institutional capacities and coordination mechanisms, and knowledge transfer for adapting productive safety net programmes (WFP-led projects that integrated disaster risk reduction and climate change adaptation into development programmes in rural regions), enabling shock-responsive social protection, and promoting climate-resilient agriculture. Among these, a large-size multi-country project (FP215) invested in strengthening financial capacities for adapting social protection systems across countries in Asia and the Pacific region. More specifically, GCF finance was used to develop climate risk-informed social protection systems in target countries through an existing regional investment fund. The fund supported capacity building with prospects to also finance the design of pilot social protection schemes. Since the approved project proposal referred to the development and strengthening of national policy and regulatory frameworks on adaptive and shock-responsive social protection, this project was not placed further along the continuum though it shows great potential to catalyse innovation. The last project in this category was the cross-cutting project FP077 (Mongolia), which differed from the others as it invested in the urban social housing sector and addressed climate-induced rural-to-urban migration triggered by climate-related disasters and reduced productivity in rural areas due to climate change.

Three projects went beyond creating enabling conditions by supporting the design or piloting of new schemes under existing social protection programmes including shock-responsive social protection scheme in Vanuatu (FP184), public employment for rangeland restoration in Botswana (FP158), and environmental conditional cash transfers in Paraguay (FP062). These articulated the potential of the projects to create knowledge and exemplify how social protection schemes can deliver dual environmental and development objectives. Notably, the social protection components in all three projects were co-financed by a foreign government organization (FP184) and national public organizations including social protection programmes (FP062, FP158). For example, FP184 (Vanuatu) explicitly noted that ‘the activity exclusively focused on designing and establishing the system and will not include cash payments as that is out of the scope of this project’ (p36, FP184). Likewise, the multi-country project FP215 placed in the previous category, which could potentially support innovative social protection mechanisms through country projects in the future, contained such remarks. These point to strong country ownership and catalytic potential but also suggest the limits of GCF support to social protection.

5. Discussion: role of the GCF in investing in social protection

5.1. Strengths of the GCF and opportunities

Our analysis showed that in contexts with established national social protection mechanisms, the GCF can provide funding for adapting social protection systems that can catalyse public sector finance from both national and international sources. In contexts with limited social protection coverage and high dependence on international support, GCF funding could be used to climate-proof donor-supported programmes, implement pilot schemes, or strengthen institutional capacities, which in turn would create the enabling conditions for establishing climate-resilient social protection systems in the future. Given that ODA has been shown to frequently overestimate the climate relevance of its investments (Zagema et al., 2023), this role of adapting social protection systems of dedicated climate finance remains critical. Importantly, the strongest linkages between social protection and climate finance under the GCF have been established in relation to climate services. Several of the reviewed projects also had a strong focus on local-level approaches to developing shock-responsive social protection. These findings signify the relevance of the GCF to build the capacities of local institutions for responding to loss and damage.

Rural livelihood projects were the most common in the portfolio, suggesting that this is an area in which the integration of social protection and climate finance is more advanced. Nevertheless, several projects demonstrated the potential for the GCF to support housing-related social protection in urban contexts. Urban adaptation is an under-addressed but critically important area for climate finance, and innovations are needed in this space (Forino et al., 2023). Housing-related social protection offers an opportunity for significant innovation in climate finance and could expand climate finance into sectors in which it has had comparatively less influence. Recent estimates suggest that, globally, 20% of the population (1.6 billion people) reside in inadequate housing, primarily in slums and informal settlements (UN Habitat, 2020). The housing sector in LMICs is challenged by growing urbanization, a deficit of affordable formal housing, and limited access to housing finance (Donovan & McHardy, 2016; Parby et al., 2015). Government provision of social (public) or low-cost housing, as well as support for low-carbon climate-resilient housing, are important social protection mechanisms, especially in rapidly growing urban centres. Examples include grants or subsidies to individuals for retrofitting existing housing stock (e.g. energy efficiency, water-stress resilience upgrades) (e.g. Lamb et al., 2020) or housing support for relocation from risk-prone areas. More broadly, there is a need to make social protection, and especially social assistance, more appropriate for cities, as many programmes in low-income countries were originally conceived for rural areas (Cuesta et al., 2020; Devereux & Cuesta, 2021), and the GCF could help pilot such efforts.

Notably, we did not identify any mitigation-only projects that invest in adapting social protection systems, despite the identification of several cross-cutting projects (i.e. positioned on the right-hand side of the continuum). Notwithstanding, several projects demonstrate entry points towards that end. The exit strategy of the mitigation project FP010 (Armenia) points to the potential for institutionalization of the grant support scheme under the national social security programme for expanding the social support coverage for energy efficiency measures. Three of the cross-cutting projects in our sample revealed opportunities to incorporate social protection into the design of green social housing and environmental protection through job creation and skills development. A paradigm shift can also be achieved through systemic responses in resource-intensive economic sectors, related labour markets and social protection systems. Active labour market policies are particularly underdeveloped in many poorer countries and system changes are needed (Nino Zarazua & Torm, 2022). It must be acknowledged, however, that achieving mitigation benefits may overly burden social protection programmes (Norton et al., 2020). Therefore, strategic GCF country programming is needed to better position social protection within the broader national mitigation priorities and address potential trade-offs.

5.2. Challenges and limitations

A significant challenge for GCF projects, particularly adaptation projects, has been to effectively articulate the climate rationale and ensure that proposals adequately fulfil the GCF’s requirements to distinguish between a climate change and development project (Bertilsson, 2022; Kuhl et al., 2023) as well as limited evidence for the effectiveness of proposed adaptive responses (GCF, 2022). These challenges resonate in the social protection sector. Because social protection programmes are cornerstones of national development and poverty alleviation strategies, it may be challenging to make a convincing case that investments in social protection are not ‘development’ and instead are clearly connected to climate change. An additional challenge is that the GCF has been found to support certain types of transformation more than others, particularly those that use market logics, techno-managerial solutions, and economic efficiency (Kuhl et al., 2023; Kuhl & Shinn, 2022), especially as mobilizing private finance is a strategic priority for the GCF (Kalinowski 2023). Therefore, it is not necessarily clear whether social protection programmes align with these logics due to their emphasis on public support and social vulnerability. However, as new themes such as just transitions, the global goal on adaptation, and loss and damage become more firmly established within the purview of UNFCCC, the GCF and other multilateral climate funds will need to be responsive to these trends. It is, therefore, increasingly possible that current rationales will need to be modified in future strategic plans, and a more sophisticated understanding of the role of social protection programmes in reducing vulnerability, as well as adapting and mitigating climate change, may be needed.

6. Conclusion

The continuum we presented in this article provides a useful framework for thinking about the numerous opportunities for climate finance to engage with social protection. As evidenced through this analysis, synergies with social protection exist across a wide range of sectors and are relevant to numerous climate adaptation, mitigation, and loss and damage contexts. Systematic integration of climate risk considerations into national social protection policies and mechanisms in LMICs is needed to reduce climate vulnerability and support mitigation; however, more evidence is needed as to how to do this most effectively (Costella et al., 2023). The study further points to the limitations of current efforts to integrate social protection in the GCF. Despite some examples further along the continuum, relatively few projects fully encapsulate the potential for climate finance to support social protection. Given the GCF’s mandate to support country-driven proposals, these pose a challenge. Articulation by the GCF of the value of such approaches may help applicants identify the opportunities that integrating social protection and climate change offers. Readiness funding through the GCF country programming, designed to provide grants and technical support for strengthening national institutional capacities and enabling access to GCF funding, may help countries overcome these barriers and develop integrated social protection interventions.

Sustained and long-term social protection support has greater potential to enhance resilience compared to short-term support (Kundo et al., 2022; Premand & Stoeffler, 2022). Moreover, most social protection-related interventions targeting climate change mitigation policies require economy-wide structural transformations over a long time. Therefore, funding through the GCF should be aligned with other sources of finance to ensure coordination and coherence between various, currently fragmented funding mechanisms for social protection and climate action. At the global level, the most important social protection financial mechanism is the Global Accelerator on Jobs and Social Protection for a Just Transition (launched in late 2021), which aims to help countries create 400 million decent jobs and to extend social protection coverage to 4 billion people. Likewise, it is vital to explore synergies between the GCF and diverse national, regional, and global climate finance modalities. Ongoing efforts of the GCF to strengthen complementarity and coherence with the Adaptation Fund and the GEF – an operational priority in the Updated Strategic Plan, provide a window of opportunity to that end. Entry points include working with the Adaptation Fund to scale up successful pilot or small-scale social protection interventions, and joint country programming with the GEF, where projects targeting climate change mitigation, environmental degradation and social protection could be particularly synergistic. Importantly, our findings suggest that the GCF is well suited to provide finance for strengthening social protection institutional and technical capacities, and for catalysing innovation and knowledge in response to climate shocks, but not to fund national social protection budgets. Therefore, the GCF can complement existing mechanisms that deliver social protection funds, by supporting countries to adapt their social protection systems in order to enable effective allocation of loss and damage funds in the future.

Acknowledgements

We thank the anonymous reviewers for their helpful comments on a previous version of this manuscript. Mariya Aleksandrova: Conceptualization; literature review; data collection and analysis; writing original draft and revised manuscript. Laura Kuhl: Conceptualization; literature review; writing, review and editing. Daniele Malerba: Conceptualization; literature review; writing and review.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research has been possible thanks to the financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ) through the project ‘Climate-resilient and nature-compatible sustainable development through socially just transformation’ (Klimalog III).