Bonding CCA and DRR: recommendations for strengthening institutional coordination and capacities

Abstract

“Our house is on fire”, climate activist Greta Thunberg declared to the participants of the World Economic Forum in Davos in January 2020. In 2019, our house was indeed on fire. Large-scale forest fires in Australia, the Amazon, and the Arctic showed how short-term actions of disaster risk reduction and relief need to be considered along with long-term measures of climate change adaptation. Climate-induced extreme weather events are currently increasing and intensifying, thereby leading to new forms of disaster risk. In order to sustainably extinguish this metaphorical fire, separated strategies are no longer enough. Responding to short term climate risks without considering the long-term climate trends, and vice-versa, is no longer an acceptable course of action, as it separates (knowledge and financial) resources that should belong together. However, integrated approaches to DRR and CCA can provide opportunities for building resilience. By collecting the hands-on experience from twenty-eight CCA and DRR experts across Europe, this guidance addresses the challenges and positive results from such integrated approaches in order to synthesise actionable policy advice for institutional actors across various governance levels.We provide twenty recommendations in five areas: 1) safeguarding sound governance, 2) ensuring effective financing, 3) seizing opportunities for cooperation, 4) sharing new forms of communication, and 5) enhancing knowledge management.Each recommendation (for details, see Annex 7.2) was developed with the aim to:•Formulate a precise advice of what needs to happen.•Introduce the relevance and limitations of the chosen approach.•Showcase a possible way forward to apply such approach.•Explain which institutions are addressed and how they can benefit.•Provide an example of how the recommendation can work in practice.Area 1: Safeguarding sound governanceChallenge: Separated decision-making processes and knowledge communities with different languages reduce the possibility of quickly joining resources in extreme events preparedness, when extreme events occur, and to plan for the long term when no emergency assistance is being deployed.Recommendation: Implementation of a comprehensive Climate Risk Management (CRM) approach with broad stakeholder involvement at and across different risk governance levels.New ways of including “local reasons for concern” into national policy-making are needed to implement target-oriented and ambitious adaptation and risk reduction solutions. Consequently, national governments should establish a national climate-risk council, to foster putting of CRM into action (see 4.1.1).Challenge: Separated user and stakeholder engagement processes and taxonomies applied by knowledge and policy communities creates difficulties in establishing proper research and practice communication channels, even if the target agents are common.Recommendation: Engage stakeholders at different scales that have an interest in both the decision-making process and outcomes.Robust decision-making that increases resilience to climate risks is embedded within social, economic and cultural landscapes. It is critical to engage all concerned actors in order to recognise the needs of all. Community resilience projects are good examples (see 4.1.2).Challenge: By focusing mainly on public policy and decision-making CCA and DRR communities often neglect private actors that can provide substantial contributions in case of disasters and planning for the long term.Recommendation: Develop a stronger focus on self-safeguards or individual prevention and preparedness.Successful societal implementation of adaptation to climate change and risk management requires substantial contributions by private actors. Here, public administrations lead in coordinating and paving the way. This means a need for new formats for cross-sectoral collaboration which require a strong mandate and considerable national support (see 4.1.3).Challenge: By failing to capture local knowledge in the preparedness and planning phases many CCA and DRR strategies miss out on valuable data, lessons and experiences that can enhance climate action.Recommendation: Implement integrated, participatory designed strategies and plans at the municipal level that deal with climate-induced disasters.This process relies on mobilising local knowledge and ownership, but also on sound climate data. The local scale requires an enabling environment at national level that explicitly addresses aspects of the authority of local governments to plan for and carry out essential integrated actions (see 4.1.4).Area 2: Ensuring effective financingChallenge: New funding and insuring methods are needed to address climate risks and adaptation not previously covered by classical risk sharing schemes.Recommendation: Create Sovereign Climate Insurance Funds with application of index-based insurance and Distributed Ledger Technology.Yield-based approaches to the insurance of climate-related risks (especially in agriculture) have many drawbacks such as fraud detection and risk modelling. Index-based solutions are a better option and should be worked towards. Sovereign Climate Insurance Funds can cover climate-related risks and provide financial protection and support to affected regions and small farmers (see 4.2.1).Challenge: New risk transference methods are needed to address climate risks and adaptation not previously covered by classical market-based financial debt instruments.Recommendation: Develop risk transfer and data collection via a European Risk Transfer Mechanism.EU-institutions need to provide a funding framework, highlighting international priorities in aligning CCA and DRR funding. A Distributed-Ledger-Technology-based platform with the main aim of transferring risk from Sovereign Insurance Funds to the financial market, collecting, processing and storing climate-related data, is warranted. This includes new mechanisms of debt financing, such as climate insurance and risk transfer (see 4.2.2).Challenge: Current market and policy terminologies are not fit-for-purpose for upcoming transaction of financial assets associated with climate action.Recommendation: Implement an EU Green Taxonomy with CCA and DRR components.An EU taxonomy of green projects with a combination of CCA and DDR indicators and metrics can be useful to support national initiatives in mainstreaming protection against climate change and disasters and improving the effectiveness of climate finance. The incorporation of such indicators into the EU Green Bond Standard identifies climate-proof projects and green financial instruments (see 4.2.3).Challenge: Current forecasting methods focus on what the weather ‘will be’ rather than what the weather ‘will cause’ leaving room for improvements in early warning systems and preparedness mechanisms.Recommendation: Pursue forecast-based financing to anticipate disasters and reduce human suffering and losses.Although there are funds for long-term DRR as well as for emergency response, funds for anticipatory action are still lacking. The integration of physical parameters and anticipatory weather information into applied action to reduce disaster risk, offers an opportunity for impact-oriented, forecast-based financing (see 4.2.4).Challenge: Existing financial and debt financing mechanisms in the area of CCA and DRR are still not up-to-speed with climate funding needs at local-to-national scales.Recommendation: Elaborate self-financing and crisis financing mechanisms with application of Distributed Ledger Technologies.There is a disparity between DRR and CCA finance on different levels, especially regarding the improved management of climate-related risks and resilience of the financial system to non-financial threats. National Distributed-Ledger-Technology-based platforms for accumulation of savings and climate-related crisis financing can facilitate this process (see 4.2.5).Area 3: Seizing opportunities for cooperationChallenge: Cross-country governance mechanisms for climate and disaster risk management are lacking or do not share common practices.Recommendation: Develop a strong transnational and interregional collaboration between CCA and DRR with a joint focus on current and future risks.Climate and disaster risks often become politically charged and rife with conflicts. Mainstreaming of CCA and DRR into existing or new transnational and interregional working groups on risks or geographic areas of mutual concern is a promising way to prevent such tensions from rising (see 4.3.1).Challenge: Effective communication and collaboration across CCA and DRR knowledge communities is hindered by separated taxonomies and networking mechanisms between groups of actors.Recommendation: Use Social Network Analysis for stocktaking of stakeholders and to enhance interactions.Often, particularly for cross-sectoral interaction formats, there is limited information on the reasons why actors have certain roles in their network or interact in certain ways, which can highlight obstacles to effective collaboration. Social Network Analysis helps to identify relevant stakeholders for such formats, learning about them, their network and its properties, and making use of this information to strengthen their interactions and encourage aligned resilience solutions (see 4.3.2).Challenge: Joint emergency and preparedness exercises that include both communities are lacking, which reduces learning opportunities.Recommendation: Organise joint emergency exercises to strengthen collaboration on various levels.There are many models to prepare action for climate-induced disaster risks, but the actual event may differ significantly from the modelled version. Joint emergency exercises help to explore climate risks, exchange knowledge and jointly prepare for weather anomalies. In addition, national governments need to test their early warning systems and joint disaster prevention models in reality, p