By Jonathan Fowler
Addis Ababa, 16 July 2015 – The global importance of disaster risk reduction has received fresh international recognition, etched into a deal agreed today at the Third International Conference on Financing for Development.
The Addis Ababa Action Agenda aims to overhaul global finance practices and generate investments for tackling a range of economic, social and environmental challenges. It is replete with references to the need to fold risk reduction into development and financial policies, as climate change and rapid urbanization drive up the number of people and assets in danger from hazards such as floods and earthquakes.
Margareta Wahlström, Special Representative of the UN Secretary-General for Disaster Risk Reduction, told the conference that the deal in the Ethiopian capital “will have far-reaching consequences that will be measured in lives saved, losses averted and risks reduced.”
“We need to act now. Global average annual loss from disasters is estimated to increase from US$260 billion in 2015 to US$414 billion by 2030,” Ms. Wahlström said, noting that the blows were particularly severe for developing countries.
“If disaster risks are not reduced then future losses will impact on growth and development. When capital flows into hazard-prone areas, it leads to significant increases in the exposure of economic assets. If these trends continue, sustainability is compromised,” she added.
“Disasters and their risks are preventable. Financing for development plays a key role,” she said.
The Addis Ababa Action Agenda details the array of challenges faced, from weaknesses in the international financial and economic system exposed by the 2008 crisis, to the way shocks from financial and economic crises, conflict, disasters and epidemics spread like wildfire in an interconnected world.
It also cites how environmental degradation and climate change threaten to undermine past successes and future prospects.
The four-day talks came four months after the World Conference on Disaster Risk Reduction in the Japanese city of Sendai, the first in a series of international meetings tied to the post-2015 sustainable development agenda. Next is a summit on the Sustainable Development Goals in New York in September, and the international climate change talks on Paris in December.
“Coherence and mutually supportive strategies where disaster risk reduction intersects with finance, development and climate change decisions are critical to the success of the post-2015 agenda,” said Ms. Wahlström.
The Sendai Framework for Disaster Risk Reduction, a 15-year agreement adopted in March, aims to drive better governance and understanding of disaster risk, greater investment in resilience and enhanced preparedness for effective response, recovery, rehabilitation and reconstruction.
It hinges on seven global targets including substantial reductions in disaster mortality, numbers of people affected, economic losses and damage to critical infrastructure from man-made and natural hazards.
The Addis Ababa accord is clear about the Sendai Framework’s importance.
“By 2020, we will increase the number of cities and human settlements adopting and implementing integrated policies and plans towards inclusion, resource efficiency, mitigation and adaptation to climate change, resilience to disasters. We will develop and implement holistic disaster risk management at all levels in line with the Sendai Framework. In this regard, we will support national and local capacity for prevention, adaptation and mitigation of external shocks and risk management,” it says.
It acknowledges how development finance can “contribute to reducing social, environmental and economic vulnerabilities and enable countries to prevent or combat situations of chronic crisis” related to conflict or disasters, and commits to promoting innovative financing to tackle risks.
It also notes that creditors have moved to ease repayments via debt rescheduling and cancellation following earthquakes, tsunamis and the Ebola crisis in West Africa.
UNISDR advocates a range of finance and development measures. Among them are risk-informed foreign direct investment; maintaining supply chains to ensure that trade continues to flow and investments are protected in the face of disasters; a stronger insurance system covering more people and communities to lessen the economic impact; and donor policies and projects that by design reduce disaster risk.
Ms. Wahlström underlined the benefits of direct private and public investment in risk reduction: “Annual investments of US$6 billion in appropriate disaster risk management strategies could generate benefits worth US$360 billion.”
UNISDR is working with partners to scale up safety nets for those most affected by disasters, and to leverage financial instruments such as insurance to help countries, businesses and households to manage impact. It also helps strengthen early warning systems essential for saving lives, livelihoods, and assets, and promotes risk-sensitive investments in urban and rural infrastructure, including healthy ecosystems.
“With such partnerships for action and recognition of the risk and costs of disasters in the post-2015 development agenda we can turn around the creation of new disaster risk and build communities that are safe, prosperous and sustainable,” said Ms. Wahlström.