Submitted by Munich Climate Insurance Initiative, Anticipation Hub
27 May 2022

Workshop report: anticipatory humanitarian action meets disaster risk finance

Climate change is no longer a distant threat. Extreme weather and climate events, such as storms, heat waves, droughts, floods and wildfires, have become more frequent and intense.  Finding ways to support people to cope with the consequences of climate change and build their resilience to extreme events is a topic that unites the climate, development and humanitarian communities.

In recent decades, a number of disaster risk financing instruments have been generated across these different communities; forecast-based financing and insurance instruments are examples of these. But these various instruments are not yet linked or integrated, and siloed approaches to their use prevail. This leads to untapped potential and the loss of potential synergies. With the climate now changing at an alarming rate, there is a need to accelerate action, work across silos, identify the challenges – and, most importantly, find ways to overcome these challenges.

This year offers several opportunities to rethink the way we prepare for and address the impacts of climate change. In January 2022, Germany assumed the G7 presidency and declared climate change to be one of the main priorities of its programme. Among other ambitions, Germany seeks to strengthen anticipatory action approaches and the global climate and disaster risk financing architecture to minimize, reduce and avert the loss and damage caused by climate change. In February, the Intergovernmental Panel on Climate Change (IPCC) published its AR6 WG II report, which not only declared that the impacts of climate change are dangerous and widespread but also offered cross-cutting solutions. And in November this year, at the 27th Conference of the Parties to the Framework Convention on Climate Change (COP27) in Egypt, climate change adaptation, as well as loss and damage, will be key topics during the negotiations.

In March 2022, the Munich Climate Insurance Initiative (MCII) and the Anticipation Hub convened a workshop for stakeholders from the humanitarian, climate and development communities. This event explored opportunities for closer collaboration across silos to strengthen the disaster risk financing architecture. Central questions included: What could the division of labour look like? Which instruments, collaborations and partnerships are needed? What are the obstacles that need to be overcome? Which ‘impulses’ need to be set at national and international levels?

The workshop began by highlighting the consequences of the climate crisis at global and local levels Prof. Maarten van Aalst, director, Red Cross Red Crescent Climate Centre, unpacked the key findings and implications of the IPCC AR6 WG II report, of which he was a lead author. He highlighted that even effective adaptation cannot prevent all climate-related losses and damages, pointing out that when it comes to early action, every decision matters. Sara Ahmed, V20 Secretariat, pointed out the mismatch between needs and available resources in the Vulnerable Twenty countries. Then, Dr Mohammed Asha, Kenya Red Cross Society, highlighted the limits of adaptation in what the Kenya Red Cross Society is doing in response. The key message was clear: we need to accelerate action and join forces to avoid mounting losses.

In subsequent breakout sessions, the participants discussed challenges and solutions to break down silos between the humanitarian, development and climate communities, and explored challenges and opportunities for closer collaboration to strengthen the disaster risk financing architecture. One message that came out of the discussions was that there is great potential to collaborate – but still little incentive to actually do so. Donors have a major role to play here: they should set stronger incentives, for example by aligning and easing access to the global funding facilities such as the Global Risk Insurance Facility and the Green Climate Fund, and by demanding  synergies at the programme and project level. To support the building of synergies, donors could also promote risk assessments and feasibility studies to inform in-country programmes and projects, and encourage cross-sectoral, multi-stakeholder partnerships, where appropriate. 

Another key message was that linking anticipatory action and disaster risk financing will require greater coordination and collaboration between existing political and technical champions, especially at the country level. Despite a multitude of actors and technical fora, and first attempts to build cross-sectoral bridges, there is still a scarcity of understanding about who is doing what and where, not to mention a lack of joint in-country workstreams, even when there are similar objectives and challenges. Stakeholder analyses, joint risk analyses and joint advocacy could be the starting points for joint anticipatory action-disaster risk financing programmes at the country level. The participants highlighted that such efforts must be driven by countries themselves. They should also put people at the centre of the process: local actors and communities – including women and minority groups – should inform the design of such programmes from the very beginning, to ensure that the instruments developed are appropriate and will make a difference at scale.

During the concluding panel, the speakers shared their reflections on the workshop’s outcomes against the background of policy year 2022. Matthias Amling (German Federal Foreign Office, GFFO) and Josefine Greber (German Federal Ministry for Economic Cooperation and Development, BMZ) noted their appreciation of the inputs at the workshop, then highlighted the work of the GFFO and the BMZ to address climate-related risks. Mr Amling shared the presidency’s plan to strengthen anticipatory action and Ms Greber the ambition to develop a ‘Global shield against climate risks’.

Next, Andrea Steinke (Centre for Humanitarian Action) highlighted the continued need to strengthen local structures. Laura Schäfer (Germanwatch) noted the need to reform the global architecture for climate financing so that it can serve local structures. She pointed out that climate risk financing and anticipatory action contribute to the ‘avert’ and ‘minimize’ principles of loss and damage in the Paris Agreement. She also emphasized the need for a comprehensive climate risk management framework, underpinned by funding through a loss and damage financing facility.

The lively debate ended with a call to map out collaboratively the different disaster risk financing and anticipatory action initiatives; you can see our first attempt here, and readers are invited to contribute their own ideas.