Climate and disaster risk financing instruments: an overview

This document provides a brief overview of the instruments that are available and may be considered as part of the CDRF strategy. As climate change increases the frequency and impacts of large scale natural hazards, it is critical that governments put in place or update actionable, comprehensive, transparent and inter-ministerial disaster risk management (DRM) plans. For these plans to be implementable and cost-effective, governments should include a climate and disaster risk financing (CDRF) strategy as an integral component of their DRM plan. While finance is necessary to effectively manage disaster risks, it is not sufficient. DRM plans must also integrate (and resource) risk assessment, institutional capacity building, risk reduction and mitigation, and emergency preparedness. DRM plans should also take into account long-term climate risk, and provide adequate resources for adaptation.