Did COP26 mark the beginning of the end for the disaster begging bowl?

by Sophie Evans, Associate Director - Advisory

In the month that has passed since leaders met in Glasgow, there has been a lot of discussion on the successes and failures of this year’s COP – without doubt the most important dialogue on climate to date. The make-or-break summit had all the key ingredients you would look for in a recipe for change: the jeopardy laid out so clearly in the damning IPCC report, the pressure from devastating impacts already felt across the globe and the call for accountability as the world looks to leaders for decisive action.

But in the end, the agreements were somewhat half-baked, with leaders and policy makers now under pressure to not only make good on the promises made in national determined contributions, but plan how to go further and faster. The summit may have only just finished, but the race to make sure COP27 in Egypt delivers more action and ambition has started at speed.

With humanitarian needs now at a record high, I have been reflecting from my corner of the disaster risk financing world on what the outcomes of COP26 mean for our agenda and those living at the sharp end of climate risk. How can we take those key ingredients for change and put an end the begging bowl system we use to pay for disasters?

Transform the jeopardy of the climate crisis into scaled ambition to respond to risk

While reducing global emissions was the centrepiece of the discussions, how the world pays for the impacts of climate change was also firmly on the table, and a priority for the climate vulnerable countries. Alongside others in the Crisis Lookout coalition, the Centre has been calling for world leaders to address the problems associated with the discretionary nature of the global crisis financing system used to support countries in the event of climate-related (and other) disasters. The announcements by the US, UK and German governments to provide countries with faster and more predictable financing options to address climate vulnerability are a welcome step in the right direction. We also saw unprecedented engagement form a range of actors who have not traditionally sat within the climate space, including humanitarian to private sector, stepping up the to the challenge with credible action.

One thing is clear, climate is change is locked into our future and for those on the frontline, its devastating effects are already being felt. What these communities need is a system for financing disasters that reflects the severity and scale the of jeopardy they face.

Our research shows that only 2.3% of funding for recent, predictable disasters, was arranged in advance. Even tripling that would still mean that the crisis financing system is primarily organised around post-disaster funding mechanisms, rather than pre-agreed funding based on a systematic understanding of the risk countries face. There is growing consensus that it will become indefensible to continue treating disasters like surprises. That needs to be reflected in the other 98% of the budget line. 

Apply pressure to act on risk based on vulnerability

As well as increasing the volume of disaster risk financing, money must go where it is needed most. We know that people in the poorest countries are more likely to die in a disaster that those in richer nations, and up to six times more likely to be injured, lose their homes and require emergency assistance. Crises exacerbate poverty and threaten development gains. For that reason, crisis prevention and preparedness are an essential part of reducing global poverty. Likewise, targeting the most vulnerable (often the poorest) is a founding principal of humanitarian action, and the basis of most international aid.

However, at COP26 we heard repeatedly that money to help prepare for and respond to climate change is not reaching the most vulnerable countries. This is not unique to climate finance- the covid-19 pandemic has taught us that in an international system where discretion is the fundamental driver of allocation, money and resources do not prioritise the poorest countries. This approach will continue to undermine global resilience efforts and threaten the success of the sustainable development goals.

When aligned to tackling poverty, disaster risk finance provides the blueprint for a rules-based system that can challenge this inequity and protect hard won development gains. That is why it is crucial that the money announced by the UK, German and US Governments at COP should prioritise providing affordable solutions to disaster risk for lower-income countries, rather than just relying on tried and tested recipients and channels.

Start an era of accountability

After an absent year as the world battelled against covid-19, it felt like all eyes were on COP26. World leaders needed to perfect a double act, to deliver the financial commitments needed to meet their obligations under the Paris Agreement on the global stage, while simultaneously providing for the economic recovery from the pandemic at home. For many, this was a difficult balance to strike. The conference concluded amidst varying degrees of disappointment at the level of ambition set, along with frustration at the process by which such decisions were reached.

It is clear, whatever the crises at home, climate change is, and will continue to be the issue of our time. Leaders will have to come to COP27 ready to be held accountable to solutions that truly meet this moment

A risk-based approach to paying for disasters can inject more accountability towards at risk communities, along with tax-payers at home. By choosing to arrange finance before the chaos and confusion of a disaster ensues, we can improve value for money, save lives, and support more inclusive decision-making at the local level.

Having plans and finance in place for crises that can be triggered for release the moment trouble arises can save lives by getting support where it needs to go faster, and in a more reliable and dignified way. Getting ahead of a disaster can avert it turning into a crisis, with the potential to cost government less, enabling them and the international system to protect more people with the same resources.

Done well, disaster risk finance recognises that understanding risk, planning, and preparedness for crises is always most effective when it is locally owned and driven. Furthermore public-private-people partnerships build greater resilience and protection from disasters. If built on a foundation of inclusive governance, good disaster risk finance offers the breadth and depth of actors from local to global, civil society to private sector to support leaders in developing accountable and inclusive solutions to climate finance.

What next?

We’ve seen a demand for pre-arranged finance and a more risk-based decision-making process come from the highest levels of the system, and the continued investments at COP26 demonstrate confidence in the approach. But we need to go further in reflection of what’s at stake here – the lives of millions of people, entire communities, and decades of progress.  

The destabilising force of climate change, the compounding impacts of covid-19, and increasing in conflict mean that needs will continue to outstrip funds available. This is only set to get worse. It has never been more important to admit that that the old way of doing things simply will not stand the test of time.

The G7, including the EU, provides $5 out of every $6 of all official development assistance globally. That’s why the Crisis Lookout coalition is calling for world leaders to agree to a new global agreement for crisis protection to identify priority risks, help people adapt, make sure they have the funds they need when it matters most, and stop disasters from devastating lives.

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Opinion: We must ditch the ‘begging bowl’ approach to crisis finance