| The Surprisingly Important Role Global Remittances Play in Climate Change Adaptation

The Surprisingly Important Role Global Remittances Play in Climate Change Adaptation

How remittances fight climate change

The economic power of remittances is widely known. 

Every time payments are sent abroad, families are protected and communities are strengthened. 

The global community witnessed this throughout the COVID-19 pandemic, where remittances stayed strong — despite pessimistic projections — and remained a lifeline for families, friends, and loved ones around the world. 

And yet, that’s only part of a truly triumphant story. Beyond their widely-heralded economic virtues, remittances are also playing an increasingly large role in climate change adaptation. 

Though it is likely a new term for most people, “climate change adaptation” is an increasingly relevant expression that encompasses the global efforts to combat extreme weather, both actual and anticipated. 

According to the United Nations Framework Convention on Climate Change, adaptation is a comprehensive reference to “adjustments in ecological, social, or economic systems in response to climate change.” 

As such, it features the development of new processes and practices designed to protect communities around the world. 

Such strategies are unique to specific regions. 

For example, farming communities with heavy agricultural production are increasingly threatened by unpredictable rainfall patterns and record periods of drought. To combat these damaging periods (and the economic effects of reduced crop yields), such communities are dependent on adaptation strategies. 

In other words, they’re reliant on remittances.

Access to Essential Technology

For farming communities, enhanced irrigation technologies and safer housing have become essential, life-saving tools. But if they’re unable to receive financial support — whether due to extreme weather or simply due to neglect — such communities cannot adapt as needed. 

Remittances are crucial to not only supporting the economic progress of these regions but to protecting their health and wellbeing year-round. 

Though these discoveries are now gaining widespread recognition, they’ve been well documented for many years. 

In 2017, researchers from KNOMAD studied the positive effects of remittances in Upper Assam, India — the northeastern region that often deals with significant flooding. 

(Note: KNOMAD stands for the Global Knowledge Partnership on Migration and Development, and their findings have long been instrumental in the advancement of climate change adaptation.)

In their 2017 research, the KNOMAD team compared households in Upper Assam that received remittances against those that did not. 

Their findings were both revealing and alarming. 

Across the board, families that received remittances were far more likely to have insurance, to have communication devices (i.e. phones, cable, and internet), and to have essential tools like boats, rafts, and raised plinths for their houses — all essential for their safety and prosperity. 

The KNOMAD research also found that remittance-recipient households in Upper Assam were a driving force for community activity, “a proxy for social cohesion and access of a household to village institutions. Over time, the participation of remittances-recipient households in collective action on flood relief, recovery, and preparedness increases.”

In other words, remittances are a driving force in climate change adaptation on an intimate and local level.

Remittances Are Stronger Than Foreign Direct Aid

Climate change has been at the heart of the global conversation for many years. 

Governments have signed accords, emissions goals have been established, and countless initiatives have been launched across both the public and private sectors. 

While “climate finance” remains an ongoing international mission, individual remittances are proving to be even more influential than most government-led initiatives. 

In fact, in 2021 alone, remittance flows to low and middle-income countries reached nearly $590 billion — a 7.3% increase over 2020. 

While an impressive number to be sure, its implications are more astounding. 

According to the World Bank, “Remittances now stand more than threefold above official development assistance and, excluding China, more than 50% higher than foreign direct investment (FDI).”

In other words, loved ones have often been more generous with their support than the combined charity of many global governments. After all, remittance flows account for nearly 6% of the gross domestic product (GDP) for low-income countries. 

And in countries like Honduras and El Salvador, remittances account for over 20% of their GDP

It’s no wonder, then, that migration is heralded as a leading method to fight climate change.

According to the International Organization for Migration, a subsidiary agency within the United Nations, 

“A common adaptation strategy in response to these environmental stressors has been for households to send some members a way to find alternative livelihoods and income…[remittances] strengthen their long-term adaptive capacity if they are invested in health services or education, or in increasing agricultural production.” 

Ultimately, remittances provide communities with the financial freedom to build better, safer, and more profitable lives. 

And while providing short-term benefits, remittances ultimately create a bulwark against the rising tide of climate change. In doing so, they provide a measure of hope for the global community at large. 


At UniTeller, we’re honored to serve on the frontlines of international remittance flows, and we are thrilled to continue advancing our role in developing a better and more sustainable future.  
Click here to learn more about P2P remittance brand, uLink.