Photo credits: Ralf Ruehmeier/InsuResilience Secretariat
Co-Chair of the InsuResilience Global Partnership & Parliamentary State Secretary to the Federal Minister for Economic Cooperation and Development, Germany.
Natural hazards and climate shocks can end human lives, destroy livelihoods and cause economic damage. Often they destroy the resources that are necessary for development. So far, there are only a few countries that have a comprehensive strategy for managing climate and disaster risks: for the most part, instead of a coordinated approach, the individual institutions all have their own measures. That is why the climate and disaster risk community is advocating Comprehensive Climate and Disaster Risk Management.
Why do we need comprehensive approaches in Climate and Disaster Risk Management and what are the implications of effective implementation when it comes to protecting communities and countries from the aftermath of disasters?
Dr Maria Flachsbarth: When it comes to building and strengthening the resilience of poor and vulnerable communities, Comprehensive Climate and Disaster Risk Management is of key importance. In order to minimise the impacts of disasters, we must first of all move from an ex-post to a forward-looking or an ex-ante approach. This is important, for example, when it comes to planning and protecting public goods such as critical infrastructure. If the risks are known, then infrastructure can be built in areas where the disaster risk is lower or existing structures can be strengthened. Moreover, if a disaster occurs, risk transfer mechanisms such as insurance help to safeguard the investments that have been made and rebuild the infrastructure.
A Comprehensive Risk Management strategy must take all aspects into account: from early warning systems and preventive measures, to contingency plans and reconstruction measures that increase resilience towards the next shock. Four components must be closely linked together in one strategy: 1. Prevention, 2. Preparedness, 3. Response and 4. Recovery.
Equally important is that all participating actors work closely together. In order to be able to implement effective and sustainable measures on the ground, it is vitally important that the people affected are involved and that there is proper coordination among the individual ministries and institutions. Climate risks affect more than just one sector. That is why a multi-sector approach is needed. This applies at every stage, from finance ministries planning financial resources for prevention and reconstruction measures, to planning and building ministries drawing up standardised requirements and codes for buildings at risk from natural disasters, to health ministries providing vaccinations and sanitation support. Public-private partnerships can increase the efficiency of Climate and Disaster Risk Management, e.g. through the exchange of experience on effective risk transfer mechanisms and through joint projects on risk evaluation that enable measures to be prioritised.
The only way to effectively identify, tackle and ultimately reduce all risks is by employing a joint, whole-of-government approach. That is the only way that those who are the most vulnerable can be protected and climate-proof development trajectories can be followed. This applies not only to the local and national level, but also to the global implementation of the international agendas for dealing with these risks: the Sustainable Development Goals, the Paris Agreement and the Sendai Framework for Disaster Risk Reduction must be implemented in concert with one another. With the InsuResilience Global Partnership, we are striving to achieve more convergence between these various strands, bringing together a community for financing and insuring against climate and disaster risks.
The gaps in protection within our societies have been made even worse by COVID-19. For example, the pandemic is making the global vulnerability of social protection systems glaringly obvious. In order for communities to be able to respond better to future shocks of a similar dimension, substantial systemic changes will be necessary.
What role can a comprehensive risk management system play in overcoming pandemics?
Dr Maria Flachsbarth: Vulnerable countries are indeed especially vulnerable to multiple shocks. Inequality and poverty can be further exacerbated by such shocks. It is important that all health risks are taken into account and included in a comprehensive risk management system. As a result of dealing with non-health risks, resilience towards health-related shocks is also increased. That way, vulnerable communities can also be prepared to deal with compound risks.
In recent months the small island states in the Pacific and countries in Asia and East Africa not only had to deal with tropical cyclones, typhoons, droughts and invasions of locusts, they were also confronted with the COVID-19 pandemic. Countries that are already fighting other disasters are often overwhelmed by a pandemic, given that their health systems are not always up to par. Another problem that these countries have is that their contingency funds are depleted. This puts them in a situation where they are no longer financially able to deal with external shocks.
That is why setting up a comprehensive risk management system that takes all sources of risks for vulnerable people into account – including health shocks, conflicts, climate shocks, etc. – is so important. Such systems should consider how health risks may overlap with other risks like hurricanes or droughts, resulting in compounded shocks. Furthermore, it should be possible with that kind of comprehensive risk management system to make country-specific predictions, collect data and carry out risk modelling. In order to be able to respond comprehensively to future crises, previously agreed financial solutions should be established.
Given the additional socio-economic burden that COVID-19 has brought, the German government has taken steps to make it possible for African states to continue to be insured against drought this year. The Federal Ministry for Economic Cooperation and Development is paying the 2020 premiums – amounting to about 19 million euros – for African Risk Capacity (ARC) member states. The ARC is a specialised agency of the African Union. It was initiated by the African countries in order to improve their disaster and risk management and thus increase resilience to climate and disaster risks. Thanks to our support for insurance premiums, up to 20 million poor people in Africa who are particularly vulnerable to crises will be able to have reliable insurance against damage due to drought during the upcoming agricultural season. It is important that countries learn from the current crisis and include financing instruments for new risks in a comprehensive management system.
The vision of the InsuResilience Global Partnership is to protect the lives and livelihoods of poor and vulnerable people from the impacts of climate shocks and disasters by developing climate and disaster risk finance and insurance solutions.
How can the Partnership support the expansion of comprehensive climate and disaster risk management?
Dr Maria Flachsbarth: As a global, multi-actor partnership, the InsuResilience Global Partnership brings together stakeholders with different experiences and facilitates regular exchange of knowledge and mutual learning. The members of the Partnership exchange knowledge and information about best practices and identify existing gaps. This means that the Partnership has considerable influence over the dissemination of strategies and approaches, including for example the idea of comprehensive climate and disaster risk management. Furthermore, the Partnership coordinates implementation efforts and introduces the topic of climate risk financing into broader climate and resilience policy agendas.
New financing and insurance solutions for climate and disaster risks are jointly developed in order to do justice to the growing needs in developing countries. The only way to achieve a comprehensive strategy for managing climate risks is through consistent, cross-sectoral cooperation. In the working groups and the annual Partnership forums the members decide on a joint agenda and joint standards, for example with regard to using integrated approaches or nature-based solutions.
The activities within the Partnership are transparent and accessible and bring people together so that urgently needed, tailored solutions can be developed. The comprehensive global network of the Partnership facilitates access to and the implementation of innovative approaches worldwide. The members, who come from every sector and level, share their knowledge and experience with one another, thereby helping to widen the reach of the topic of climate and disaster risk management. The only way to recognise and reduce the multidimensional risks and realise our joint, sustainable vision of development in tune with the 2030 Agenda and the Paris Agreement is by working together.
This interview was conducted by the InsuResilience Secretariat