Essential Two: Financing and Resources

"Assign a budget for disaster risk reduction and provide incentives for homeowners, low-income families, communities, businesses and the public sector to invest in reducing the risks they face"


An action plan remains just that—a plan—unless it has dedicated resources to ensure that actions related to the Ten Essentials can be carried out. Local governments require capacities and mechanisms to access and manage resources, including for disaster risk reduction, as part of the city’s vision, mission and strategic plans. Resources can come from city revenues, national disbursements and allocations to sectoral departments, public-private partnerships and technical cooperation, and from civil society and external organisations.


Invest in risk reduction measures and awareness campaigns

  • Integrate risk reduction measures into the local government budget to increase the resilience of the city’s economy, ecosystems and infrastructure (i.e. schools, hospitals, critical assets, water supply, drainage, solid waste management).
  • Along with your own funds, seek to access complementary national and provincial funds and programs to support your actions (i.e. urban infrastructure, environmental management and public works).
  • Encourage public and private sector participation in developing awareness campaigns and information that promote resilience actions for the general public, home owners, education and health workers, industry, real estate developers and others.

Ensure a budget for preparedness and response

  • Make provisions in the budget to maintain well-trained and equipped emergency response services, communications, early warning systems and risk assessment capacities.
  • Institutionalize disaster management and actions, with capacity for decision making and access to funds.

Consider establishing a contingency fund for post-disaster recovery

  • Build a contingency fund to meet post-disaster needs with stockpiles for relief assistance, response equipment and vehicles, a reserve for post-disaster interventions and rapid recovery, and assign resources to develop toolkits and standard operating procedures for post-disaster and recovery activities
  • Develop a strategy to access funds from national and international sources, the private sector or individuals to support cash grants, soft loans for restarting livelihoods and to begin more sustainable rebuilding in disaster-affected communities.

Put in place incentives for risk reduction—and penalties

  • Provide incentives for the construction of safe housing and infrastructure and for local businesses that invest in disaster resiliency and risk reduction. For example, apply lower local taxes, offer grant subsidies, and/or partial cost grants for assessing, strengthening and retrofitting vulnerable housing.
  • Support safer standards by providing design options and subsidized actions in high-risk areas. Encourage local businesses, banks and insurance companies to reduce the cost of more sustainable building supplies and support low-income communities with insurance, savings and credit schemes that favor them.
  • Consider penalties and sanctions for those who increase risk and environmental degradation.
  • Give public recognition and/or awards to good city practices that increase safety.

Improve economic performance

  • Identify the concerns and priorities of the economic sector, areas of potential vulnerability such as the location or robustness of its buildings and the sustainability of resources they depend on.
  • Ensure that city plans are risk-sensitive, for example, by identifying areas suitable or not suitable for human settlement and economic development.

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  • Cairns (Australia)

  • Regular Budget for Disaster Preparedness and Response
    The city of Cairns, Australia has an annual operating budget to cover its Disaster Management Unit, Coordination Centre, volunteer emergency services and community awareness programs. Its annual capital budget has, in recent years, covered allocations for building construction, emergency response vehicles and equipment, new risk assessment software, upgrading flood warning network and drainage and flood mitigation investments—a clear demonstration of the city’s commitment to disaster risk reduction. This is complemented by investment and partnerships at national level, for instance, through a review of building codes following Cyclone Yasi in 2011, which also involved built environment professionals, private sector and academic institutions. Read more about their work at:

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  • Manizales (Colombia)

  • Manizales, Colombia Uses Innovative Financial Measures to Promote Disaster Risk Reduction
    The government of Manizales, Colombia has taken innovative financial steps to promote disaster risk reduction, including:

    • Tax reduction for those who implement measures to reduce the vulnerability of housing in areas at high risk for landslides and flooding.
    • An environmental tax on rural and urban properties, spent on environmental protection infrastructure, disaster prevention and mitigation, community education, and relocation of at-risk communities.
    • A system of collective voluntary insurance to allow low-income groups to insure their dwellings. The city government has an agreement with an insurance company and allows any city resident to purchase insurance coverage through municipal taxes.

    For more information consult the 2009 Global Assessment Report on Disaster Risk Reduction (UNISDR), Click on GAR-2009, chapter 6.2

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  • Philippines, China and Sri Lanka

  • Philippines, China and Sri Lanka Support Investments in Disaster Risk Reduction
    Since 2001, cities in the Philippines are required to allocate 5% of their local government budget to a calamity relief fund (CRF). Under the Disaster Risk Reduction and Management Act of 2010, they can spend 70% of this allocation for preparedness and procurement of relief /rescue equipment and stockpiles.
    Sri Lanka’s Disaster Management Ministry announced in 2011 an allocation of Rs. 8 billion for a program to control floods in the capital, Colombo, while launching a secure town planning programme to minimise disasters as part of the Resilient Cities Campaign. The money will be used to clear canals, reconstruct the drainage system and for other measures to prevent floods in Colombo. Under the ‘secure towns’ programme, 15 towns have been selected as disaster-free cities.
    Provincial governors in two of China’s disaster-prone provinces committed additional resources to disaster reduction. Wei Hong, Executive Deputy Governor of Sichuan province, said that 2 billion Yuan will be invested to improve the local geological disaster prevention system. Gu Chaoxi, Deputy Governor of Yunnan province, which is highly at risk for geological disasters, vowed to invest at least 10 billion yuan over10 years in the local disaster prevention and assessment system. The report on Sri Lanka available at:; the report on China:

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