Increasing resilience is essential to secure future investment from climate change
This article is contributed by Jovin Hurry, who is reporting from Paris.
A climate resilient society and economy is essential to secure hard-won development gains and to ensure that future investment is not lost to climate change. A resilient society and economy suffers little and recovers more quickly from natural disasters.
Sadly, extreme climate already impacts hundreds of millions of people every year, undermining or destroying their livelihoods, their homes and their environment. The Rockefeller Foundation estimates that over the last 30 years, $1 out of every $3 spent on development has been lost as a result of such recurring crises, a total loss of $3.8 trillion worldwide.
The high-level discussion at COP21 in Paris on resilience covered the full spread of peoples’ needs as they face increasing climate impacts. It underlined the fact that building effective resilience cannot be achieved in a disconnected fashion, for example, giving people early warning of extreme climate events may save their lives, but there is no additional economic benefit if they cannot get insurance in the first place.
To contribute in building this resilient society around the world, a coalition has been launched to develop early warning systems for more than 50 least developed countries and small island developing states by 2020.
The Climate Risks and Early Warning Systems (CREWS) initiative is to mobilize US$100 million over that period to fill gaps in existing bilateral and multilateral cooperation programs. A trust fund hosted by the Global Facility for Disaster Reduction and Recovery will support this objective. Annick Girardin, French Minister of State for Development and Francophony said: “Prevention is always the less expensive solution. CREWS is about saving lives”.
The G7 Initiative on Climate Risk Insurance aims to increase access to direct or indirect insurance coverage against the impacts of climate change for up to 400 million of the most vulnerable people in developing countries by 2020.
According to recent estimates, only about 100 million people in developing countries and emerging economies are currently covered by climate risk insurance.
Also known as “InsuResilience”, the initiative was adopted at the G7 Summit early this year and is to be implemented in close partnership between the G7 states, developing countries and emerging economies.
The G7 recognizes that significant funding will be necessary and can leverage several billion USD of risk from the private insurance and re-insurance industry.
The G7 InsuResilience Initiative is to work with existing regional risk management and insurance pools, such as the African Risk Capacity and the Caribbean Catastrophe Risk Insurance Facility (CCRIF), to provide access to insurance services for 400 million people over the next five years in the most vulnerable countries.
With an initial commitment of €150 million from Germany, the G7 InsuResilience is committing finance to set up the initiative and to start the first phase of implementation. The initiative will also support the development of early warning systems in the most vulnerable countries.
In Africa, the Sahel is the ecoclimatic and biogeographic zone of transition in Africa between the Sahara Desert to the north and the Sudanian Savanna to the south. It is a belt up to 1,000 km wide that spans the 5,400 km in Africa from the Atlantic Ocean to the Red Sea.
The Great Green Wall for the Sahara and Sahel Initiative is a major African-led initiative with the bold ambition to restore the productivity and vitality of the Sahel region, whilst tackling the Continent’s most urgent development challenges. The initiative seeks to improve climate resilience for local communities in the region, and to increase food security for 20 million people faced with starvation in the Sahel. The World Bank will allocate investments amounting to USD 2.2 billion for the Great Green Wall and Lake Chad.
Furthermore, the Global Resilience Partnership (GRP) is increasing its ability to invest in innovative resilience measures in the next five years by mobilizing additional funding, and inviting others to join the partnership. With an initial commitment of US$ 150 million, the GRP’s goal is to build resilience in Southeast Asia and other regions, prioritizing cross-sector collaboration and innovation that enables vulnerable communities to better manage and adapt to climate change.
For its part, the European Union has said it will contribute €125 million to finance emergency actions in countries affected by the extreme weather phenomenon ‘El Niño’. The support will contribute to the joint effort of bringing life-saving emergency assistance and increasing resilience in the affected countries.
It will combine humanitarian and development assistance to address immediate needs of nutrition, water and sanitation, health and shelter. It will provide support to health structures, provision of food and safe drinking water, supplementary food for pregnant women and children. It will also help build resilience in the most exposed countries by enhancing disaster preparedness, early response mechanisms, and supporting long-term development solutions.
The private sector also has an important role to play, for example, the Global Adaptation and Resilience Investment Working Group, launched by Siguler Guff & Co., will mobilize private sector investment in climate adaptation and resilience.
The Working Group is evaluating the potential for a $1 billion investment vehicle that could invest in both developed and developing countries around climate adaptation and resilience. ING has committed to allocate at least 20% of the proceeds from the issuance of a five-year €500 million and three-year US$800 million green bond to fund new projects, including for resilience.
Last and not least, a new initiative has been launched to build climate resilience in the world’s most vulnerable countries by UN Secretary-General Ban Ki-moon and 13 members within the UN system. The “A2R” (anticipate, absorb, reshape) initiative is to strengthen the ability of countries to anticipate hazards, absorb shocks, and reshape development to reduce climate risks.
The new initiative is to address the needs of the nearly 634 million people, or one tenth of the global population, who live in risk-prone coastal areas just a few meters above existing sea levels, as well as those living in areas at risk from droughts and floods. It brings together private sector organizations, governments, UN agencies, research institutions and other stakeholders to scale up transformative solutions. It focuses on Small Island Developing States, Least Developed Countries, and African countries.
“The initiative is a multi-stakeholder partnership that focuses on accelerating climate resilience before 2020 for the most vulnerable by strengthening three elements: First, the capacity to better anticipate and act on climate hazards through early warning and early action; second, the capacity to absorb shocks by increasing insurance and social protection coverage; third, the capacity to adapt development to reduce risks at the national and international levels,” he said.
“It is time to move from risk to resilience”, said UN Secretary-General Ban Ki-moon.
And he could not be more right.