THINKING IMPACT BEFORE INSTRUMENTS IN HUMANITARIAN DISASTER RISK FINANCING
11 November 2019
A new series of technical discussion papers by the Start Network, the Red Cross Red Crescent Climate Centre and the International Federation of Red Cross and Red Crescent Societies explores how evolving disaster risk financing (DRF) approaches could be a game changer in acting earlier, quicker and more effectively to predictable humanitarian crises. The papers are attempting to redefine how DRF meets humanitarian objectives. Building on the practical experience of the Start Network and IFRC the papers call for a move from the traditional DRF sovereign approach to a more human-impact driven approach to risk financing, identifying the financial and operational needs from the ground up; an ‘impact before instruments approach. Each paper explores the need for such a renewed approach whilst identifying some of the technical challenges and posing solutions to make disaster risk financing work most effectively in the humanitarian context. The aim is to ignite dialogue and build collaboration around key technical challenges whilst highlighting some key solutions to unlock the potential of DRF for humanitarian action.
The traditional model of disaster risk financing is a system focused on monitoring risk or indicators to release financing after the impact of a crisis has already been felt. To respond to the ambitions of the Grand Bargain and Sendai framework and align with multi-stakeholder strategies, DRF needs to become more strategic, collaborative and scaled. Taking a renewed look at the approach, the paper calls for a localised humanitarian approach to DRF focused on identifying needs from the ground up. Highlighting the challenges and proposing enablers of the new design approach, Impact Before Instruments pushes DRF to bring about significant change in the humanitarian system.
Also in this series:
This paper considers questions and issues which need to be considered when designing such disaster risk financing analytics and localised decision-making tools that can respond to the complexities of humanitarian crisss.
The paper considers how planning can take place in a coordinated, collaborative way across governments and humanitarian actors to help fill gaps and analytics needed to initiate implementation.
This paper discusses the need to mainstream transparency, participation and accountability through a localised approach into disaster risk financing systems. Clear opportunities for accountability and participation are present in a pre-planned and positioned DRF approach, where ahead of time communities and people at risk can review the framework, question it and hold it to account to deliver what is promised.
To create the environment for humanitarian disaster risk financing to be effective, essential investment is required in disaster preparedness. Resources and capacity to implement contingency plans need to be available and ready to deliver at the point of trigger for pre-emptive humanitarian financing. Essentially a DRF system with strong institutional preparedness is integral to humanitarian disaster risk financing.
This paper explores the types of questions that humanitarian agencies need to ask themselves as they weigh up the risks and benefits of investing in, and combining, different instruments, be they flexible funds, pooled rule-based trigger funds, insurance or other financial services.