Giving Money To The Very Poor Benefits The Environment As Well


Stephen Luntz

Stephen has a science degree with a major in physics, an arts degree with majors in English Literature and History and Philosophy of Science and a Graduate Diploma in Science Communication.

Freelance Writer


Kalimantan, the Indonesian part of Borneo has one of the world's largest, and most endangered, rainforests. Financial transfers to its many poor people substantially reduced the rate of deforestation.Gemilang Ar-rasyid 

The path to saving endangered rainforests may be surprisingly simple – give money to people living nearby. The idea of paying people to protect ecosystems near where they live is widespread, but a new study reports a substantial environmental benefit even when the funds come without strings attached.

Pre-pandemic Indonesia had experienced 18 years of strong economic growth. However, this newfound wealth has been unevenly spread, with more remote islands left behind. To address this, Indonesia established the Keluarga Harapan Program, which gives money to poor households, many in rural areas.


Keluarga Harapan was not designed to address Indonesia's rampant rainforest destruction, but Professor Paul Ferraro of Johns Hopkins University and Dr Rhita Simorangkir of the National University of Singapore decided to see if it had any consequences. After all, the greatest concentration of poverty is in areas that have the highest conservation value and the fastest deforestation.

Helpfully for social scientists, Keluarga Harapan was phased in gradually so some villages received financial support before others. This makes it far more likely the program actually caused any effects that match its arrival in time, rather than just being a coincidence of timing.

The pair collected data on payments to more than a quarter of a million households in 7,468 villages in forested areas and compared this with nearby deforestation. They found the payments reduced deforestation by 30 percent, and even more in previously undamaged areas. Moreover, the longer a village benefited from the program, and the greater the proportion of villagers who received payments, the greater the fall in deforestation.

"Two of the great global challenges of the 21st century are to reduce poverty and slow deforestation. Unfortunately, the solutions to those challenges are often perceived as conflicting with each other – progress on one front means retreat on the other," Ferraro said in a statement, whose research is published in Science Advances. "Our study is the first of its kind to suggest that cash transfers to the impoverished can have a positive effect on forest conservation.”


Moreover, Ferraro and Simorangkir observe the payments are so modest the program represents cost-effective greenhouse mitigation, even without considering the benefits for biodiversity and poverty reduction.

Development aid has abundant examples of projects that work spectacularly well in one cultural environment but prove ineffective or actually harmful when implemented more widely. Indeed, one study found a similar program in Mexico led to more deforestation, not less. Consequently, it can't be assumed the environmental benefits from Keluarga Harapan would be seen everywhere forests are under threat. However, with most previous studies of the relationship between poverty-fighting and environmental outcomes being badly designed to detect effects like this, the paper offers hope we may be able to get double or triple the value out of efforts to build a better world.