3 Innovative Ways to Help Countries Hit by Climate Disasters, Beyond a Loss and Damage Fund

Sending Aid Before the Disasters Hit
In response to these growing needs, the disaster management community is getting creative about how it helps countries finance disaster risk reduction and response.

Traditionally, humanitarian funding arrives after a disaster happens, when photos and videos of the horrible event encourage governments to contribute financial support and a needs assessment has been completed.

However, with today’s technology, it’s possible to forecast many climate-related disasters before they happen, and there is no reason for the humanitarian system to wait to respond until after the disaster happens.

A global network of aid groups and researchers I work with has been developing anticipatory action systems designed to make funding available to countries when an extreme event is forecast but before the disaster hits.

This can allow countries to provide cash for people to use for evacuation when a flood is forecast, open extra medical services when a heat wave is expected, or distribute drought-tolerant seeds when a drought is forecast, for example.

Insurance That Pays Out Early to Avoid Harm
Groups are also developing novel forms of insurance that can provide predictable finance for these changing catastrophes.

Traditional insurance can be expensive and slow to assess individual claims. One solution is “index insurance” that pays out based on drought information without needing to wait to assess the actual losses.

African nations created an anticipatory drought insurance product that can pay out when the drought starts happening, without waiting for the end of the season to come and the crops to fail. This could, in theory, allow farmers to replant with a drought-resilient crop in time to avoid a failed harvest.

Without insurance, disaster-affected people usually bear the costs of disaster. Therefore, experts recommend insurance as a critical part of an overall strategy for climate change adaptation.

Boosting Social Protection Systems
Another promising area of innovation is the design of social services that can scale up when needed for extreme weather events.

These are called climate-smart social protection systems. For example, existing programs that provide food for low-income families can be scaled up during and after a drought to ensure that people have sufficient and nutritious food during the climate shock.

This requires government coordination among the variety of social services offered, and it offers promise to support vulnerable communities in the face of the rising number of extreme weather events.

Future of the Loss and Damage Fund
To complement these innovative disaster risk finance mechanisms, aid from other countries is crucial, and the Loss and Damage Fund is a key part of that.

There are still many areas of debate around the U.N.’s Loss and Damage Fund and what counts as true financial support. There have been discussions over whether investing in a country’s resilience to future disasters counts, whether existing financial systems should be used to channel finance to countries in need, and what damages are truly beyond the limits to adaptation and qualify.

The new Loss and Damage Fund is only of a part of a mosaic of initiatives that is seeking to address climate disasters.

These novel mechanisms to finance disaster risk are exciting, but they ultimately need to be created in conjunction with investments in adaptation and resilience so that extreme weather events cause less damage when they happen. Communities will need to plant different crops, build flood drainage systems and live in adaptive buildings. Managing climate risk requires a variety of innovative solutions before, during and after disaster events.

Erin Coughlan de Perez is Professor of Climate Risk Management, Tufts University. This article is published courtesy of The Conversation.