Integrating green finance in humanitarian action for energy access and shelter and settlements interventions

Displaced populations often endure harsh living conditions, lack access to adequate shelter and clean energy and are exposed to protection risks. While the number of displaced populations and humanitarian needs increase globally with nearly 120 million displaced in 2023 (UNHCR, Global trends report), funding particularly in protracted crises is often limited compromising standards. According to the State of the Humanitarian Energy report (GPA, 2022), a staggering 94% of displaced people in camps do not have access to electricity, and 81% rely on firewood and charcoal for cooking, leading to severe health risks and environmental degradation. The linkages between displacement and environment are twofold. On the one hand, climate induced disasters drive displacement. Environmental displacement accounts for 46% of new internal displacements in 2023 (IDMC, 2024). On the other hand, in many contexts, the reliance on firewood for cooking and heating or the need of construction materials to host displaced populations has led to severe deforestation, soil erosion, floods and landslides, threatening their safety and well-being, as well as the biodiversity and ecosystems.

The lack of sustainable financing models creates challenges for humanitarian partners in ensuring long-term support, ultimately jeopardizing the resilience and self-reliance of displaced communities. Despite the potential of carbon credits and other mechanisms to
subsidize improved cookstoves, agroforestry projects and other “green interventions”, issues of market integrity and equitable benefit distribution remain. Current financing mechanisms often overlook the unique challenges of displacement settings, widening the funding gap.

IOM, supported by Innovation Norway(IN), is working through two projects in Mozambique and Bangladesh on integrating carbon finance and leveraging sustainable financing mechanisms to ensure the continuity and scalability of the provision of cleaner cooking solutions and investments in environmental restoration and other green interventions for shelter and settlements. By leveraging alternative financing monetizing positive environmental and social impacts from greening operations and assistance, the projects aim at ensuring improved living conditions, safe access to humanitarian services and protection of the growing displaced populations while preserving the environment.

The event will allow IOM to share the progress made in the two IN funded initiatives focusing on green finance for shelter and settlements and energy access. The event will bring together humanitarian actors, private sector partners and other relevant stakeholders to discuss the unique challenges and opportunities for integrating displacement settings into carbon markets and other sustainable financing mechanisms globally.