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Financial inclusion may limit sustainable development under economic globalization and climate change

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Version 1 2021-05-19, 08:42
journal contribution
posted on 2024-06-06, 08:23 authored by A Li, L Gao, S Chen, J Zhao, S Ujiyad, J Huang, X Han, Brett BryanBrett Bryan
Abstract Financial inclusion is a key policy for achieving the UN Sustainable Development Goals worldwide. However, emerging evidence has challenged the universal effectiveness of this policy. Combining a cross-sectional socio-economic and ecological survey with regional macro-economic and climatic data, we undertook an integrated causal analysis of the impact of financial inclusion policy on the Inner Mongolian herder social-ecological system. Exposure to economic globalization and climate change threatened herder livelihoods via increased feed costs and reduced livestock sales prices. Financial inclusion loans were beneficial for herders with large grassland plot size who used their traditional ecological knowledge to adapt via seasonal herd mobility. However, most herders were sedentary, constrained by small plot size, and used financial inclusion loans to reserve livestock and maintain high stocking densities. This strategy exposed them to inflated feed costs, increased their debt, and led to widespread grassland degradation. The results illustrate the limitations of financial inclusion policy in achieving sustainable development when people are trapped in poverty, subject to novel social-ecological contexts, and their ability to adapt is compromised. Transformative adaptations based on community cooperation, traditional knowledge and institutions, complementary public policies, and technological innovation are crucial to support financial inclusion policy and enhance sustainable development.

History

Journal

Environmental Research Letters

Volume

16

Article number

ARTN 054049

Pagination

1 - 13

Location

Bristol, Eng.

Open access

  • Yes

ISSN

1748-9318

eISSN

1748-9326

Language

English

Publication classification

C Journal article, C1 Refereed article in a scholarly journal

Issue

5

Publisher

IOP Publishing Ltd