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An Overview of Climate and Disaster Risk Financing Options for Pacific Island Countries

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An Overview of Climate and Disaster Risk Financing Options for Pacific Island Countries An Overview of Climate and Disaster Risk Financing Options for Pacific Island Countries Pacific Resilience Program © Copyright Pacific Islands Forum Secretariat, 2021 All rights for commercial /profit reproduction, in any form, are reserved. PIFS authorises the partial reproduction or translation of this material for scientific, educational or research purposes, provided that PIFS and the source document are properly acknowledged. Permission to reproduce the document in any form, whether for commercial /profit or non-profit purposes, must be requested in writing. Original text: Englishh PIFS Cataloguing-in-Publication data An Overview of Climate and Disaster Risk Financing Options for Pacific Island Countries / [by the] Pacific Resilience Program, Pacific Islands Forum Secretariat. Suva, Fiji : Pacific Islands Forum Secretariat, 2021. 47 pages : col. illustrations ; 30 cm. ISBN: 978-982-101-163-1 1. Risk management—Oceania 2. Climatic changes – Government policy – Oceania 3. Climate change mitigation I. Pacific Islands Forum Secretariat II. Pacific Resilience Program 577.220995 dc23 AACR2 STATE OF PACIFIC REGIONALISM REPORT 2017 FOREWORDFORWARD In light of these mounting challenges, the Pacific In the Pacific we Islandshave longForum known Secretariat that (PIFS), we canfollowing achieve the more together than alone. request of Pacific leaders, continues to focus our expertise and resources to support Pacific island countries to strengthen their resilience to the Our shared historyimplications has countless of a changing examples climate. where PIFS ouris well people have worked side by side to navigateplaced to the act asmany a convenor challenges and a platform inherent to support in living on the vast the sharing and exchange of knowledge. Our efforts ocean that connectsfocus us. on strengthening the coordination between government, civil society and private sector actors Recently through thein pursuit Framework of their respective for Pacific resilient developmentRegionalism, Forum Leaders have reiterated the need for this collectiveobjectives action and needs.to be This adaptable, report, ‘An Overviewinnovative of and inclusive to Climate and Disaster Risk Financing Options for ensure it continues to serve our people. Pacific Islands Countries’, seeks to contribute to Given the nature of current and future threats to the ongoing efforts to improve financial protection PacificThe geopolitical societies, it is abundantly and development clear that protecting context in ofthe the face Pacific of rising isrisks. constantly This report changingprovides an and today the region people, building robust social protection systems, overview of financial products that are available to andfaces strengthening a variety publicof external financial and management internal forcesPacific thatisland are countries. influencing When paired it. effectivelyThey include with climate change, systems,shifts inmust global be at the power heart of and our effortsglobalisation, to build policies ocean to supportmanagement the protection and of conservation, people and the rising inequality, riskadvances resilience inand technology, increase self-reliance. economic and environmentalfundamental reduction uncertainty, of risks, these and products regional can and global conflict. play a role in improving the overall resilience of our The ability of Pacific island countries to effectively Pacific island countries. coordinate and prioritise the range of investments andTo successfullyrisk reduction activities and sustainably required to enhanceaddress Whilethese finance issues alone we mustwill not continuallysolve the problems reflect we on where we are nationaland how resilience we can to health most crisis, effectively climate change continue and face, working it is also cleartogether. that financial instruments and disaster events will be largely dependent on national products can be an effective means to bridge the capacityThis State to assess,of Regionalism understand, reportand anticipate helps usgap do between that by vulnerabilities providing anda geopolitical resilience-building analysis of the trends, interrelated threats. In the immediate term, this objectives. Contingent financing arrangements, understandingthreats and can opportunities help Pacific governments, facing the people, region’s the ability political to transfer and risk, development and the accessibility ambitions. of It should serve andas abusinesses conversation to anticipate starter changing about risks the and strategiesput finance we for increasedcan employ national to risk build retention, a stronger are the and increasingly inresponsive place contingency region. measures I trust to reduce it will exposure also helpto imperative inform thefor Pacificthinking governments, of individuals communities, and organisations who shocks. Over the long-term, this understanding will and businesses as they seek to offset rising annual ultimatelysubmit policyshape and initiatives determine howthrough Pacific our island annual costs Pacificand losses. wideThe reportpublic buildsconsultation on an initial process. countries prioritise and design public policy and account of financial protection products that was investAs I inhave risk management. said before, if our collective actionsshared dowith not Forum impact Economic positively Ministers on at the their lives of people in the meeting in 2017. Pacific island then countries we are continue heading to bear in thethe brunt wrong direction. This report encourages us to ‘think big’ with of the devastating impact of climate change-related I commend the report for wide use as a resource to disasterregard eventsto the reflected journey in aheadthe damage and itand helps loss ushelp map build outthe resilience our steps of our along region. the way. incurred. For example, the 2015 Tropical Cyclone PamThe in Framework Vanuatu had estimated for Pacific damage and Regionalism losses of envisages a region of peace, harmony, security, social about 64% of its 2013 GDP, and Fiji about 31% of its 2014inclusion, GDP due andto Tropical prosperity Cyclone Winstonso that in all2016. pacific people can lead free, healthy, and productive lives. TheseWorking estimates together do not capture I am confidentthe full extent thisof the can be realised. non-economic losses experienced for the loss of life, Secretary General or the indirect long-term impacts of such unpreceded Pacific Islands Forum events on the communities, ecosystems or economy. Meg Taylor, DBE Meg Taylor DBE, SECRETARY GENERAL, PACIFIC ISLANDS FORUM An Overview of Climate and Disaster Risk Financing Options for Pacific Island Countries |Pacific Resilience Program 3 State of Pacific Regionalism Report 2017 1 Acknowledgements This report has been compiled through research conducted by the Pacific Islands Forum Secretariat (PIFS) through the Pacific Resilience Program (PREP). The PREP involves a series of national projects based in the Republic of the Marshall Islands, Samoa, Tonga and Vanuatu as well as regional projects managed by the Pacific Community (SPC) and PIFS. Funding for the PREP project in PIFS is provided by the World Bank through the International Development Association and the Global Environment Facility Special Climate Change Fund. The report is the result of extensive research and consultation undertaken in 2019 and 2020. We acknowledge with gratitude the enduring effort of Daniel Lund, the author of this report and former Resilient Development Advisor for the PREP project. This report has benefitted from the extensive inputs and support provided by colleagues at the World Bank and we would like to thank Habiba Gitay, Luis Alton, Akosita Drova, Ulle Lohmus and Katherine Baker. The PIFS would like to thank the many individuals and organisations who were consulted to support the content and analysis in this report. Finally, sincere gratitude is expressed for the guidance and encouragement provided by Mosese Sikivou, PREP Regional Coordinator, Exsley Taloiburi, PIFS Climate Finance Advisor/Resilience Team Leader, and Zarak Khan, PIFS Director of Programmes & Initiatives. 2 4 An Overview of Climate and Disaster Risk Financing Options for Pacific Island Countries |Pacific Resilience Program Acronyms and Abbreviations ADB Asian Development Bank CAT-DDO Catastrophe Deferred Drawdown Option CCRT Catastrophe Containment and Relief Trust CERC Contingency Emergency Response Component (IDA) CERF Central Emergency Response Fund (UN) CDF Contingent Disaster Financing (ADB) CRW Crisis Response Window (IDA) DRCF Disaster Rehabilitation and Containment Facility (Fiji) DREF Disaster Relief Emergency Fund (IFRC) ECAL Environment and Climate Change Adaptation Levy (Fiji) FbA Forecast-based Action FJD Fiji Dollars FRDP Framework for Resilient Development in the Pacific: An Integrated Approach to Address Climate Change and Disaster Risk Management 2017 – 2030 GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery IBRD Internal Bank for Reconstruction & Development (part of the World Bank) IDA International Development Association (part of the World Bank) IMF International Monetary Fund IOM International Organization for Migration IRM Immediate Response Mechanism NDRF Natural Disaster Rehabilitation Facility (Fiji) PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative PCRIC Pacific Catastrophe Risk Insurance Company PICs Pacific island countries PIFS Pacific Islands Forum Secretariat PREP Pacific Resilience Program PRGT Poverty Reduction and Growth Trust
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