Part of: Reducing climate change disaster risk
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We need a seismic shift in thinking on cash to tackle disaster risk

by Jan Kellett and Charlene Watson | Overseas Development Institute
Wednesday, 18 March 2015 10:13 GMT

U.S. one dollar bills blow near the Andalusian capital of Seville in this photo illustration taken on November 16, 2014. REUTERS/Marcelo Del Pozo

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

An assessment of disaster risk now needs to be part of every big investment

In Sendai, the Disaster Risk Reduction (DRR) community is the first to take centre-stage in 2015 – a year of summits that will shape finance for development for at least the next decade and a half.

The new Post-2015 Framework is a crucial opportunity to send a strong signal to this community that it is time to shift from a narrow focus on risk to long-term development progress.

Helen Clark, the head of the U.N. Development Programme, recently tweetedIf it isn’t risk informed, it isn’t sustainable development’ and – of course – she is right (UNDP also have a neat little video here).  

Disasters disproportionately affect the poorest and most marginalised communities. They exacerbate vulnerabilities and social inequalities, destroy livelihoods and harm well-being. Placing what can be a massive financial burden on the state, disasters undermine both development and economic growth.

3 CRUCIAL POINTS

So, the question is, if sustainable development must be disaster resilient, what does this mean for financing DRR?

1. We must stop making huge financial investments that create and lock in risk, while seeking to reduce risk with narrow DRR projects

It is critical that, for example, the estimated $6 trillion a year that will be invested in infrastructure – vital for competitive economies everywhere – is disaster resilient. Be it public or private, concessional or non-concessional finance, national or international, it must all be disaster resilient to seriously reduce the growing costs of disasters both in lives lost and financial loss.

 2. We must focus on investment before disasters strike and on long-term, sustainable approaches to DRR.

 Short-term project-based finance has been the norm, with the bulk of funding going to disaster response and to an extent preparedness, rather than the resilience of people and property. While focused projects will continue to serve an important role – particularly in the poorest countries – dedicated assistance must support overall risk management and work to integrate ‘risk’ throughout development spending.

 3. We need to change the perception that DRR spending is only worthwhile if disaster strikes.

The integration of disaster risk reduction into development spending is not about asking for more money per se, it’s about smarter investment to deliver broader benefits. There is increasing evidence that DRR boosts innovation and economic activity, regardless of disaster events. The discourse, therefore, needs to shift towards the additional benefits of risk-informed investment, rather than solely focusing on preventing losses.

The U.N. World Conference on Disaster Risk Reduction (WCDRR) was never going to be a pledging event. However, the outcome text must deliver a strong message that all financial flows should be disaster resilient.

Practically speaking, this means ensuring that all investments are risk-informed. This is the message that needs to be taken forward in this year’s discussions on Financing for Development, the Sustainable Development Goals and under the new agreement for the U.N. Framework Convention on Climate Change, and through to the World Humanitarian Summit in 2016.

The final message to negotiators at Sendai is this: sustainable development means risk-informed development, and risk-informed development means a whole new approach; this demands a change not only in policy but also in financing.

Charlene Watson, is an Overseas Development Institute senior research advisor, and Jan Kellett is disaster and climate partnerships advisor at UNDP.

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