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FEATURE: Financing resilience – Global to local actions can work in step to help the poorest

Mairi Dupar reports on a pressing issue for delegates at the 22nd Conference of the Parties to the UNFCCC (COP22) in Marrakech, Morocco last week: how to raise more finance to support the world’s poorest people adapt to the effects of climate change.

Global measures for climate resilience

Stephane Hallegatte is on a mission to get national and international policy-makers to recognise the true impact of climate-related disasters on the world’s poorest people – and do something about it. “Natural disasters affect wellbeing more than traditional estimates suggest,” he pointed out – speaking at COP22 in Marrakech this week. Traditional accounting looks at the economic value of people’s losses, so of course “dollar amounts only look at anyone who has something to lose in the first place.” By this measure, countries like the USA and Japan, which have exposed and highly valued assets, are near the top of world rankings for losses from hurricanes, floods and other natural disasters.

But is this a fair way to measure the true human cost of disasters?

According to Dr Hallegatte, a far more sophisticated measure is needed. In his recently released World Bank report “Unbreakable”, he and his fellow authors try to put disasters into real human terms. “We model losses according to wellbeing, not just assets,” he added.

His team calculates how ‘asset losses’ – such as homes swept away, crops inundated and spoiled – affect people’s income, and how their consumption suffers as a result. Households may lose access to the basics of human survival: food, water, shelter.  Other aspects of their wellbeing could be dented, too: their ability to earn income from diverse sources, their ability to borrow and save, as well as the distribution of income among households.

The “Unbreakable” study suggests that by taking this broader view of what people have to lose from disasters, different countries could be ranked for their resilience and national governments, donors, and other actors could be motivated to invest further in strengthening resilience. (On the world map, resilience levels for Germany showed 76 percent; for Malawi, 60 percent.)

As for recommended policy measures, “Insurance is very fashionable but the transaction costs are too high if there are only a few small assets to be covered. So we have been looking at potential of social protection” to brace societies against the increasing number of natural disasters that are expected in a changing climate, Dr Hallegatte said.

Local partnerships for climate resilience

At the other end of the scale, the COP22 event heard Fiona Percy of CARE International describe how village savings and loans associations in Niger have transformed local people’s ability to bounce back from climate shocks.

“Savings and loans associations have been pivotal responding to needs of communities and addressing the lack of financial services in the community”, she said. In this dry and increasingly drought-stricken part of Africa, the BRACED programme has been training and providing material support for villagers to grow their incomes. Villagers are figuring out how to add value to farm products, set up enterprises and find new markets for their goods. For example, villagers grow neem and peanut, and can learn how to process the valuable oils of these crops on the farm. They are also beginning to store produce on their farms, so that they can sell it over time at a higher price rather than flooding the market at once and driving down prices for their goods. The BRACED programme has also worked with local people to diversify into activities such as soap-making and knitting “which are not climate sensitive”, Ms Percy said.

As well as giving village savings and loans association members the ability to diversify their incomes, gain new skills and reduce their vulnerability to climate shocks and stresses, the programme has made women more confident in their communities and has improved gender relations.

Small and large scale action for resilience works in harmony

Although the neem oil-makers of Niger and the national social protection systems promoted in “Unbreakable” seem worlds apart, they can and should reinforce each other – said Dr Hallegatte. “What is really important is to create synergies among these different systems,” he said. “These informal systems make communities more robust to bigger shocks – the better the small community systems are, the better the larger scale social protection systems will be.”

So far, so good: the experts saw a way for public-financed policies and programmes to work together in step. But what about investment from the private sector, which will be needed from the micro to the macro level to ensure societies are climate-resilient? Read part two of this blog to see what insights Bangladeshi and Jamaican businesses can bring to company leaders everywhere.

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