Extreme weather is becoming more common, with potentially devastating effects on local communities. Droughts, heavy rainfall, dangerous storms, and other weather-related shocks are happening more often, lasting longer, and causing more damage than ever as a result of climate change. These events destroy food sources, disrupt economies, and damage property. 

Cash transfers are most helpful when they come before, rather than after, an emergency. Cash transfers or emergency loans sent in anticipation of a major weather event can help communities recover faster, reducing the likelihood that families will go hungry. From Bangladesh to Niger, giving families cash when they were forecast to experience extreme weather, such as floods or droughts, helped them better afford food and, in some cases, improved their mental health and well-being. In Niger, when researchers compared the benefits of cash transfers before, during, and after a drought, they found that the families who received cash the earliest fared the best, underscoring the importance of early action.

Accurate weather forecasts and effective early warning systems are essential to predicting crises and responding quickly. The only way to implement a truly anticipatory cash transfer program is to be able to predict with accuracy when and where weather emergencies will happen. Artificial intelligence and machine learning may improve forecasts and help governments anticipate weather emergencies in the future.

Early findings are promising, but more research is needed to understand long-term impacts. More pilot programs and rigorous evaluations will help policymakers design programs that support families in both the short- and long-term. For example, it’s important to understand the trade-offs between sending money to the smaller number of families most impacted by a weather event (which means waiting until after the emergency to see who is most in need) versus sending money to more families who might be impacted in advance (which allows for earlier action, but may require smaller transfers if budgets are limited). 

Anticipatory cash transfers may be a cost-effective approach to disaster response, although cost-effectiveness data is limited. Providing anticipatory support can increase the impact of each dollar spent  and reduce the likelihood of economic downturns in the wake of a disaster.

When designing anticipatory cash transfers, policymakers should prioritize forecast accuracy and timing. Effective programs rely on forecasts. Without an accurate understanding of the likelihood of an extreme weather event, programs can’t deliver aid to the families who will need it most. Building rapid delivery systems is also key, given evidence that sending cash later reduces its impact.

If it is not possible to send money before a weather emergency, acting as quickly as possible after a disaster makes a difference. Moving quickly, even if the money will arrive after a weather emergency, makes a difference for families. In Nepal, families who received cash support as soon as possible after a flood (most within two days) were able to afford more food and experienced better mental health than families who received cash 1-2 months after the flood.