Making Migration Work for Climate Adaptation: Classifying Remittances as Climate Finance

This paper argues that climate-vulnerable populations should be given preferential access to labour migration programmes by countries of destination; and that this could be incentivised by classifying some remittances, in narrow circumstances, as mobilised private climate finance. Labour migration can provide climate-vulnerable households with access to large new financial flows with potentially transformative effects for household adaptation. No other development intervention matches the impacts of international labour migration. Despite this, few countries of destination have attempted to target labour migration opportunities to climate-vulnerable communities able to derive the greatest benefit. To overcome the relative inconvenience of doing so for countries of destination, we propose a new tangible incentive. Migration programmes meeting narrow criteria (verifiably and transparently selecting for climate vulnerability) could be ODA-eligible and meet OECD standards for mobilising private climate finance. After deductions of migrants’ participation and opportunity costs, remittances generated could be considered mobilised private climate finance for adaptation. Current flows of mobilised private finance for adaptation are intolerably low, and high-income countries have declared their desire to mobilise more as a matter of priority. Targeted migration programmes can offer an efficient way of doing so: the leverage ratio of project costs to remittances is likely favourable compared to other examples of mobilised private finance. Targeted migration programmes could mobilise significant finance (potentially hundreds of millions of dollars), contributing to meeting underfunded and growing climate adaptation needs at the most local level. The quality of this financing is higher than many alternative options: funding flows directly to climate-vulnerable households, in amounts unmatched by alternative interventions. Several positive secondary effects are also identified.