A $2.30-a-day basic income trial is trying to save the Amazon rainforest

• A pioneering project in Peru is giving $2.30 a day to people in Indigenous communities.
• Reducing poverty removes a lot of the incentives for deforestation, the organizers told BI.

Groups backing a basic-income trial in Peru are hoping that unconditional payments to Indigenous communities will help preserve the Amazon rainforest.

Since November, 188 people living in three Amazonian reserves in central Peru have received cash transfers equivalent to 8.6 Peruvian Soles, or about $2.30, a day.

The project — developed by climate action NGO Cool Earth in conjunction with female-led Indigenous groups — is due to run for two years, with payments totaling about $310,000.

The idea is that providing a guaranteed income will remove some of the incentives to become involved in activities that destroy the rainforest.

Poverty in these communities is one of the main drivers of deforestation in the region, Isabel Felandro, Cool Earth's head of programs, told Business Insider.

"Those communities face a lot of challenges in terms of threats like illegal deforestation that goes on around the territories, drug cartels, illegal mining," Felandro said.

They can end up "selling the forest, or engaging in other activities that are not very sustainable because they have this financial worry," she said.

Communities are often faced with agonizing decisions, Felandro added.

"If you don't have the money to send your kid to a hospital, what do you do?

Basic income — for the rainforest

$2.30 a day wouldn't go far in the US or Europe.

But in these communities, it can have a huge impact, Felandro said. With the income, "a whole family can eat for a day," she said.

She added that people have been using the money to complement their diets, or have clubbed together to hire a van to take their kids the long distances to school.

Numerous basic-income trials have proliferated worldwide, but most are focused on social and economic outcomes.

In the US, cities like Los Angeles, Chicago, Denver, and Atlanta have offered participants direct cash payments, no strings attached.

But Cool Earth believes theirs is among the first to aim at a positive environmental impact.

The NGO has run numerous cash transfer projects over the last 17 years, sending money to communities in the Amazon, New Guinea, and Congo rainforests, who band together to decide how to spend it.

But this latest pilot — where every person over the age of 18 receives money independently — is seen as an even more direct way to get money working for the rainforest.

The impact and efficacy of basic-income programs are still being investigated, and Johan Oldekop, an academic specializing in the environment and development at the UK's University of Manchester, sounded a note of caution when commenting on this project to The Guardian.

Oldekop praised the goal of supporting Indigenous communities, who are leaders in preserving rainforests. But, he added, there is "little and mixed evidence on the environmental effects of cash transfers around the world."

Some data shows that these programs can actually lead to deforestation because families can use the cash to expand their agricultural businesses, and chop down trees to do so, he said.

Felandro told BI that this is a fair concern, but added that here "the scale is very minor."

Families often only have small plots of land that they use primarily to feed themselves. "We're not talking about large-scale production of cacao or coffee," she said.

Communities that participated in Cool Earth's prior cash transfer projects saw up to 46% less deforestation compared to similar neighboring communities, Felandro added.

Correction: August 28, 2024 — An earlier version of this story incorrectly described the project. It provides basic income to a select group of participants; it is not a universal-basic-income program.