UN to tackle finance question in disaster risk deal

Countries are set to sign a disaster risk reduction deal in Sendai next week, with important links to climate adaptation

Sendai airport after the 2011 Tohoku earthquake and tsunami (Pic: Flickr/Roberto de Vido)

Sendai airport after the 2011 Tohoku earthquake and tsunami (Pic: Flickr/Roberto de Vido)

By Megan Darby

Negotiators are flocking to Sendai, Japan to strike a global deal to help prevent death and damage from earthquakes, storms, flooding and other natural disasters.

With the UN estimating 87% of natural disasters are climate-related, the deal could help countries adapt to the hazards of climate change.

But while there is broad agreement on priorities for the framework, Margareta Wahlstrom, disaster risk reduction (DRR) chief at the UN, said in a statement the issue of financing any deal was as yet unresolved.

“What is left for member states and countries now,” she said, “is to find a common formula for the terms of international cooperation on financing, on how to formulate a common global commitment.”

Wahlstrom also stressed the importance of tackling the underlying drivers of disaster risk, including climate change.

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The deal, due to be finalised on 18 March, is the first of three major UN decisions this year. Sustainable development goals are to be agreed in New York in September, followed by a climate accord in December.

UN secretary-general Ban Ki-moon emphasised the links between these processes in an op-ed this week.

“Helping those who are most vulnerable to disasters is the ideal starting point for the effort to aid all people by establishing universal targets for development and climate change,” he wrote.

Natural disasters cause an average US$315 billion worth of damage to buildings a year, according to the UN’s Global Assessment Report published last week.

With population growth and climate change, this is expected rise to US$415 billion by 2030 unless action is taken.

Investment of just US$6 billion in early warning systems and other preparations could limit the damage by an estimated US$360 billion over the next 15 years.

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Countries will not be required to commit finance under the DRR deal, which is voluntary.

That leaves practitioners eying up other sources of funds, such as the UN-backed Green Climate Fund and private financial institutions.

Ban highlighted opportunities for banks, insurers and pension funds to get involved. At a climate summit he hosted in New York last year, such institutions pledged to mobilise US$200 billion by the end of 2015.

“A decade ago, when the last such gathering was held, the private sector was scarcely represented,” Ban said.

“This time, companies and entrepreneurs will be there in full force to explore a range of valuable opportunities.”

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The introduction of climate change to the discussion brings political risks, and the danger that these talks could become embroiled in the same toxic disputes that have slowed progress on a UN’s climate deal.

Countries vulnerable to climate-related disasters are seeking to introduce language to the DRR deal that would put pressure on rich countries to cough up.

The draft text includes elements borrowed from the climate negotiations, including (in square brackets, meaning it has yet to be agreed) the contentious phrase “common but differentiated responsibility”.

That seemingly innocuous phrase has underpinned bitter battles over who is most to blame for the climate crisis and – crucially – who should pay the costs.

Tom Mitchell, head of climate at the Overseas Development Institute, told RTCC the introduction of such politically charged terminology had increased uncertainty over the DRR deal.

“Nobody is entirely sure how this discussion about finance and common but differentiated responsibility is going to pan out,” he said.

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