82648 v2 Building Resilience Integrating Climate and Disaster Risk into Development The World Bank Group Experience Integrating Climate and Disaster Risk into Development The World Bank Group Experience To access the executive summaries in other languages, please visit worldbank.org/climatechange © 2013 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is joint product of World Bank and GFDRR staff. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Fo r ewor d v Foreword Weather-related events hurt rich and poor countries alike. They developed over decades, are already helping nations prepare for a can slam the brakes on economic growth and cripple markets. But more changeable world. how we fare after disaster strikes depends very much on where in However, let us not fool ourselves that doing this will be easy. the world we live, and how. The more vulnerable and less prepared Resilience is effective, but it often requires a higher initial investment. our nations, communities and households are, the more we suffer. Our experience shows it costs up to 50 percent more to design and If we live in coastal or water scarce areas, on steep slopes, the more build safer buildings and infrastructure after a disaster. State-of-the-art we are at risk. If our house is made of sturdy materials, the less we weather warning systems require new technology and highly trained are likely to be affected. However, if we are poor or we live in a poor staff. Relocating people from unsafe areas is expensive and can bring country, the more likely we are to lose our lives. cultural and social disruptions, which can create new risks. We know As the global climate continues to change, developing countries that communities with strong social bonds are more resilient when face mounting losses from severe floods, droughts and storms. By disaster strikes as neighbors are the first responders and can help 2030, there could be 325 million people trapped in poverty and each other in the process of reconstruction. vulnerable to weather-related events in sub-Saharan Africa and South At the World Bank Group, we believe that climate-related disasters Asia. Large coastal cities, many of them in growing, middle-income can be reduced and investment costs curtailed. But this requires us nations, could face combined annual losses of US$1 trillion from to work across disciplines with different partners to make climate such events by mid-century. and disaster resilience part of our day-to-day development work. This report shows why building climate resilience is critical for the The good news is, many of these interventions make sense for World Bank Group’s goals to end extreme poverty and build shared development and they help all of us—developing and developed prosperity—and why it should be front and center of the development nations alike—prepare for a warmer and more unpredictable world. agenda. Unless we help vulnerable and poor nations, regions and cities We know what to do. Our job now is to ramp up efforts to get prepare and adapt to current and future climate and disaster risks, we ahead of disasters to save lives and protect livelihoods. We need to could see decades of development progress rolled back. By focusing on get beyond disasters and help countries and communities build the Bank’s experience in climate and disaster resilient development, resilience in the face of a rapidly warming world. we hope that this report will also contribute to international discus- sions related to understanding loss and damage from climate change. This report calls for the international development community to work across disciplines and sectors to build long-term resilience, reduce risk and avoid climbing future costs. It emphasizes the neces- Rachel Kyte sity of building and empowering institutions for the sustained effort Vice President needed for making development climate and disaster resilient. And Sustainable Development Network by highlighting best practices, it shows how financial instruments The World Bank Group and intervention programs, along with disaster preparedness expertise November, 2013 vi B uil d in g R e sil ie n c e | I n teg rating C li m ate a n d Di saste r Ris k in to Dev e lo p m e n t Executive Summary This report presents the World Bank’s experience in climate and closer collaboration between the climate resilience and disaster risk disaster resilient development, and contends that such develop- management communities, and the incorporation of climate and ment is essential to eliminating extreme poverty and achieving disaster resilience into broader development processes. Selected shared prosperity by 2030. The report recognizes, however, that case studies are used throughout this report to illustrate promising such development requires additional start-up costs, which pay off approaches, lessons learned and remaining challenges. in the long run if done correctly. Given this, the report argues for Figure A: Global disaster losses from 1980–2012 (US$billion) 400 350 300 250 200 150 100 50 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Overall losses (in 2012 values) The bars indicate annual disaster losses. The line indicates the trend. Source: © 2013 Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatSERVICE (as of January 2013) E x ec u t i v e S u mma ry vii The report aims to contribute to the loss and damage discus- (e.g., flash floods) and sea storms (IPCC 2013). For example, land sions under the United Nations Framework Convention on Climate areas affected by heat waves are expected to double by 2020 (World Change, and is targeted at development practitioners and national Bank 2013a). policy makers who face the challenge of addressing a potential Attributing causality of disasters to climate change remains increase in disasters caused by gradual changes in climatic means intrinsically difficult due to the uncertainties, and complex and and extremes. dynamic interactions between development patterns, the environ- From 1980 to 2012, disaster-related losses amounted to US$3,800 ment and the climate (all of which contribute to disaster risk). While billion worldwide (Figure A). Some 87% of these reported disasters attribution of specific weather events to climate change is highly (18,200 events), 74% of losses (US$2,800 billion) and 61% of challenging, attributing disasters (the resulting impact) to a specific lives lost (1.4 million in total) were caused by weather extremes driver—climate, development or environmental change—is even (Munich Re 2013). more difficult, given the complexity of these interactions (Figure B). Development patterns, particularly population growth in high- Weather-related disasters affect both developed and developing risk areas and environmental degradation, continue to be the most countries, with particularly high disaster impacts in rapidly growing important drivers of disaster risk (IPCC 2012). However, since the middle-income countries, due to growing asset values in at-risk areas. 1960s, human-induced climate change has been increasingly con- The largest coastal cities, for example, could experience combined tributing to extreme events in the form of rising temperatures (such losses of US$1 trillion by mid-century (Hallegatte et al. 2013). as warmer spells and heat waves), changing precipitation patterns Figure B: The role of natural hazards, exposure and vulnerability in disaster risk Poverty and environmental degradation Vulnerability Vulnerability Disaster Disaster Risk Risk Natural Hazard Exposure Natural Hazard Exposure Climate Poorly planned Change development Disaster risk is determined by the occurrence of a natural hazard (e.g., a cyclone), which may impact exposed populations and assets (e.g., houses located in the cyclone path). Vulnerability is the characteristic of the population or asset making it particularly susceptible to damaging effects (e.g., fragility of housing construction). Poorly planned development, poverty, environmental degradation and climate change are all drivers that can increase the magnitude of this interaction, leading to larger disasters. Source: Adapted from IPCC, 2012. viii B uil d in g R e sil ie n c e | I n teg rating C li m ate a n d Di saste r Ris k in to Dev e lo p m e n t However, low-income and lower middle-income countries have The common goal should be climate and disaster the least capacity to cope and, in general, suffer the highest human resilient development, while recognizing that it toll, accounting for 85% of all disaster fatalities (Munich Re 2010). comes at a cost Building climate resilience is essential to the Risk reduction and better preparedness to deal with climate and disaster impacts can substantially decrease the cost of disasters. global goals of ending extreme poverty and From India to Bangladesh to Madagascar, early warning systems, promoting shared prosperity better preparedness and improved safety codes have proven to be cost effective, save human lives, and protect public and private While many uncertainties persist, one thing is clear: climate- investments. Climate and disaster resilient development, therefore, related impacts will continue to grow due to both development and makes sense both from a poverty alleviation, as well as from an climate drivers (IPCC 2013), and impacts will be felt most acutely by economic, perspective. the poor. Unless measures are taken to reduce risks, climate change Yet despite its cost effectiveness over the long term, climate is likely to undermine poverty goals and exacerbate inequality for and disaster resilient development can require substantial start-up decades to come. costs. Safer structures require design changes that typically cost 10 Climate change will have the greatest impact on the poorest to 50% more to build—and even more if transport or water net- and most marginalized populations, who commonly live in the works need to be relocated (GFDRR 2010). In addition, improved highest-risk areas (for example, 72% of the African urban population hydro-meteorological systems require new technology and training, live in informal settlements). They are also the ones with the least risk assessments may require geospatial, scientific and engineering ability to recover from recurrent, low-intensity events, which can information often at high resolution, and even after risk reduction have crippling and cumulative effects on livelihoods. The impacts plans have been implemented, disasters can cause residual costs, of climate change on poverty are expected to be regressive and making it imperative to reinforce coping strategies. differential, affecting most significantly the urban poor (net food This report maintains that both developed and developing consumers) and highly vulnerable countries in sub-Saharan Africa countries have a common interest in promoting climate and disas- and South Asia, where the number of exposed poor may reach 325 ter resilient development. While interventions are needed that million by 2030 (Shepherd et al. 2013). Many of these countries already make sense under sustainable development, they are now are also those with the least capacity to prepare for, and absorb, the more urgent than ever due to climate change. As such, climate and effects of climate events. disaster resilience should form an integral part of national strategies Climate change is already exacerbating inequality; at the subna- and development assistance, particularly in the most vulnerable and tional level, impacts tend to be most severe in already impoverished least developed countries. areas. As climate effects can undermine hard-earned development Given the close interactions between climate change and local gains, potentially trapping the most vulnerable into poverty, their drivers of vulnerability, it is important to ultimately strengthen all impacts need to be minimized by reducing the magnitude of the aspects of climate and disaster resilient development, including hazard (which requires a global solution, namely reducing greenhouse coordinating institutions, risk identification and reduction, prepared- gas emissions), diminishing exposure (by protecting and/or assisting ness, financial and social protection, and resilient reconstruction. the poor to live in safer areas) or decreasing the vulnerability of the Addressing only selected aspects of this framework risks leaving poor to climate shocks. Social protection programs are an important others exposed, and even creating perverse incentives, such as what part of such a strategy, but must be complemented by policies that happens when funding is allocated primarily to disaster response, directly help the poor become more resilient. leaving proactive risk management underfunded. E x ec u t i v e S u mma ry ix Much is already known regarding how to build In climate and disaster resilient development, the process of resilience to weather-related disasters, but strengthening risk management—through better information, timely financing, contingency funds, and enabling policies and planning— better integration between climate resilience can sometimes be more important than the actual achievement of approaches and disaster risk management discrete activities (such as building a protection dyke). Often, the is required activities—and in some cases the actual disaster—serve as a forum to catalyze better climate and disaster resilience decisions. The presence Although the approaches used for climate resilience and disas- of uncertainties also requires a robust feedback system to determine ter risk management originated from different disciplines, the two which approaches succeed, which ones fail and why. The paucity of communities of practice are increasingly converging. Much of this short-term results, together with slow initial disbursements, may at convergence is happening on the ground; yet institutional resistance first deter some donors accustomed to more conventional and risk towards integration at national and international levels continues. To averse investments; however, it is important that they recognize prevent fragmentation of scarce local capacity and global resources, that this is how climate and disaster resilient development works. the two disciplines must be progressively harmonized into a com- An increasing number of countries, such as Colombia, the Philip- mon agenda. pines, India, Mexico and Samoa, have piloted climate and disaster The World Bank and many other development partners have resilient planning, and evidence shows this has helped them curb accumulated a wealth of global expertise in climate and disaster climate-related impacts. These countries’ experiences are documented resilient development. Good practices are emerging in both pro- in case studies in this report. cesses, such as institutional frameworks and iterative feedback, as Despite progress made, many challenges remain. Long-term well as instruments and tools, including climate and disaster risk projections of climate and development scenarios continue to be assessment, risk reduction, strengthened preparedness, social and highly uncertain, which is often cited as a cause for policy inaction. A financial protection, and resilient reconstruction. Many of these robust, iterative decision-making framework is a potential course of are described through case studies in this report. action, but data for informed decision making continue to be limited, In order to deal with climate and development uncertainties, as are opportunities for engagement with countries at key develop- national stakeholders need sustained and flexible programs, which ment planning stages (for example, when national development require clear institutional frameworks and predictable, long-term plans are being prepared). The most important challenges, however, financing (over at least a decade). The fact that climate affects most continue to be institutional. The international community should sectors introduces an added complexity in many countries where lead by example by further promoting approaches that progressively governance systems are structured along sectoral lines. Emerging link climate and disaster resilience to broader development paths, experience suggests that to be effective, institutional coordination and funding them appropriately. across various ministries should be set at the highest possible level.