Financing social protection : core financing options and the need to increase synergies with green, climate, humanitarian and alternative funding frameworks for a more climate resilient future

The working paper analyzes the diverse financing options and fiscal strategies necessary to expand social protection in Asia and the Pacific, underscoring the critical importance of social protection amidst climate challenges. It examines the gaps in current social protection spending, where the region's average expenditure of 8.2% of GDP falls significantly below the global benchmark. The paper presents an array of financing mechanisms, including social security contributions, innovative tax reforms, reallocation of fossil fuel subsidies, and green and social bonds, alongside newer frameworks like multilateral climate funds and the newly established Loss and Damage Fund. It further highlights the synergy between social and climate resilience, advocating for robust social protection frameworks that can buffer against climate-induced displacement, support mitigation and adaptation efforts, and address emerging health risks. The paper is organized into sections on core funding sources, innovative and targeted fiscal policies and green, climate and complementary funding sources, with a comprehensive evaluation of each approach. By promoting cross-sectoral cooperation and exploring synergies between social protection and climate action, the paper argues that nations can create sustainable social protection models and build resilience against future climate and other type of shocks.

Social Outlook 2024

Social protection schemes provide cash or in-kind support for people facing life cycle contingencies, such as having children, getting sick, acquiring a disability, losing a job or growing older. Social protection is also an important tool to protect people from covariate shocks, such as natural disasters, economic crises and pandemics. Lack of social protection exposes everyone to financial uncertainty and contributes to increasing within- and across-country inequalities.

Social protection and climate change in Asia and the Pacific

Social protection plays an important role in supporting climate change adaptation and mitigation efforts, particularly in the Asia Pacific region where many remain without adequate coverage. Sustainably expanding social protection is essential, with a focus on vulnerable groups, including informal workers, migrants, people with disabilities, and marginalized communities. To be effective, social protection systems must be rights-based, comprehensive, provide adequate benefits and uphold principles like universality and solidarity. Benefits will also have to take into account the heightened risks from climate change. Governments should explore synergies with disaster risk finance and Paris aligned investments like green bonds and climate funds. Climate-sensitive design, fiscal repurposing, and inclusion in national climate strategies are vital steps in crafting comprehensive, equitable social protection systems that address climate vulnerabilities and promote sustainable development. Gender-specific challenges must also be addressed to ensure effective climate adaptation and mitigation.

How to design child benefits

This is the tenth in a series of primers developed to support policymakers and practitioners in Asia and the Pacific in their efforts to strengthen social protection. The primer highlights the role of child benefits to support families and the implications of different design features that impact on this. 
 
The first primer in this series explores why social protection is needed; the second explains how to design inclusive and robust social protection systems and focuses on tax-financed income security; the third focuses on its effective implementation; the fourth discusses options for financing; the fifth highlights key concepts and schemes required for disability-inclusive social protection; the sixth illustrates how the design of social protection systems can either exacerbate or mitigate the disadvantage women; the seventh highlights key design elements in developing an inclusive and comprehensive old age pension system; the eighth outlines key strategies to ensure the right to maternity leave and maternity cash benefits; and the ninth clarifies understanding around universality in social protection, what it entails and how it can be operationalised.

Understanding universal social protection

This is the ninth in a series of primers developed to support policymakers and practitioners in Asia and the Pacific in their efforts to strengthen social protection. The primer clarifies understanding around universality in social protection, what it entails and how it can be operationalised. The first primer in this series explores why social protection is needed; the second explains how to design inclusive and robust social protection systems and focuses on tax-financed income security; the third focuses on its effective implementation; the fourth discusses options for financing; the fifth highlights key concepts and schemes required for disability-inclusive social protection; the sixth illustrates how the design of social protection systems can either exacerbate or mitigate the disadvantage women; the seventh highlights key design elements in developing an inclusive and comprehensive old age pension system; and the eighth outlines key strategies to ensure the right to maternity leave and maternity cash benefits.

How to design paid maternity and paternity leave policies

This is the eighth in a series of primers developed to support policymakers and practitioners in Asia and the Pacific in their efforts to strengthen social protection. The primer presents key design features to ensure the right to maternity leave and maternity cash benefits. It also addresses the need for additional care leave schemes and benefits.

The first primer in this series explores why social protection is needed; the second explains how to design inclusive and robust social protection systems and focuses on tax-financed income security; the third focuses on its effective implementation; the fourth discusses options for financing; the fifth highlights key concepts and schemes required for disability-inclusive social protection; the sixth illustrates how the design of social protection systems can either exacerbate or mitigate the disadvantage women; and the seventh highlights key design elements in developing an inclusive and comprehensive old age pension system.

The workforce we need : social outlook for Asia and the Pacific

Asia and the Pacific’s success in achieving the United Nations 2030 Agenda for Sustainable Development depends on a healthy, protected and productive workforce. People of working age make up two thirds of the region’s population and more than half of the global labour force. We depend on them to power the economic growth, competitiveness and sustainable development needed to accelerate the region’s progress towards all 17 Sustainable Development Goals. Our workforce generates the tax revenues needed to pay for essential public goods and services and ensures the well-being of dependent family members. Yet the working-age population of Asia and the Pacific is under pressure, denied the decent work opportunities it needs to fulfil its potential.

Regional actions to support the implementation of the Action Plan to Strengthen Regional Cooperation on Social Protection in Asia and the Pacific

The Action Plan to Strengthen Regional Cooperation on Social Protection in Asia and the Pacific was endorsed by the Committee on Social Development at its sixth session, held on 20 and 21 October 2020, and the Economic and Social Commission for Asia and the Pacific (ESCAP) affirmed its importance in its resolutions 77/1 and 78/1. With its overall purpose being to extend social protection to all, the Action Plan serves as a shared vision, strategy and platform for members and associate members of ESCAP to promote partnerships, peer learning and the sharing of good practices. At the national level, Governments are called upon, in the framework of the Action Plan, to establish an intermediate target for social protection coverage by 2025 and to then measure progress towards achieving universal coverage by 2030. In order to achieve this objective, 12 measures to be taken at the national level have been laid out. At the regional level, the ESCAP secretariat should, in the framework of the Action Plan, develop a regional platform to facilitate peer learning and the sharing of good practices. It should also consolidate national experiences on the implementation of the Action Plan into periodic progress reports and provide technical advice and capacity-building upon request. The present document contains information on measures that have already been taken or that are being taken at the regional level to support the accelerated implementation of the Action Plan. In this regard, the Committee is invited to take note of the measures contained in the present document, to share information on the actions taken at the national level in line with the Action Plan and its 12 measures and to propose how action could be further accelerated at the national level.

The impact of ageing on accessibility, affordability and availability of healthcare services in Asia and the Pacific

The Agenda 2030 for Sustainable Development (United Nations, 2015) is a call for “[a] world with equitable and universal access to… health care and social protection, where physical, mental and social well-being are assured”. While some challenges to the meeting of this goal are difficult to predict, and outwith the scope of modelling, a key potential driver of this is the changing age profile of populations. This paper summarises the likely challenges to the delivery of this goal arising from changes in the age structure of countries in Asia and the Pacific. It then seeks to model the extent to which future healthcare expenditures (HCEs) may vary according to changes in the observable determinants of HCEs. While modelling is subject to significant uncertainty, we provide scenario estimates of future healthcare expenditures according to variation in the age profile of populations, the extent to which future ageing may be healthier, future gross domestic product (GDP), changes in the age profile of per-capita spending, and population preferences for spending on healthcare. Our central estimates are that HCEs as a proportion of GDP are likely to increase from around 5.3% to 9.7% by 2060, rising to 13.2% if assumptions regarding future healthy ageing do not hold. For high income countries in the region, this is likely to peak and level off at around 11% of GDP, while for medium income countries this is projected to reach 9.6% by 2060.