A comprehensive climate risk management strategy is essential. The effects of human action-driven climate change are eroding the progress made towards achieving the UN’s Sustainable Development Goals (SDGs). Extreme weather events like cyclones, floods and heatwaves are rapidly increasing in rate and severity. At the same time, there are slow-onset events.
Defining climate risk management
Comprehensive Climate Risk Management (CRM) is a systemic framework that seeks to anticipate, avoid and prevent all types of climate risks, as well as to absorb remaining impacts from extreme weather events and slow-onset changes. Thereby, it integrates the two research strands of Climate Change Adaptation (CCA) and Disaster Risk Reduction (DRR) into a sustainable development framework.adaptationcommunity.net
Climate Risk Management response measures
What are the economic impacts of climate disasters?
The socioeconomic impacts of climate change and disasters are immense. Approximately 3.3 to 3.6 billion people live in situations that imminently expose them to climate change. This is roughly 40% of the world’s population. People who live in high-risk areas for climate events like low-lying coastal regions, high mountain areas and in the Arctic have become more risk averse. This is mainly due to the recurrent loss of lives and destruction of assets and properties. Because of this, people become reluctant to invest in resources that benefit human well-being, favouring humans economically.
Similarly, when a country diverts its capital to provide relief for recovery and rebuilding actions, it deprives the opportunity of allocating these funds to economic development. Being exposed to climate risks in susceptible circumstances, along with inadequacy to moderate or manage the adverse impacts leads to disasters and losses. Climate change adversely affects developing economies and emerging market economies. These nations are the least equipped to face these consequences.
Inaction has already cost developing nations a two-fold increase in adaptation expenses in the last ten years. These costs will potentially rise with surging global warming, hitting $300 billion in 2030 and $500 billion in 2050. Hence, climate risk management is fundamental to development. Identifying and lowering the climate risks can save lives, livelihoods, and possessions, thus fostering development. Identifying and lowering the climate risks can save lives, livelihoods, and possessions, thus, fostering development.
International climate risk management Policies and Agendas
International policy agendas have recognised the importance of climate risk management to counter the effects of climate change. These include the Paris Agreement (United Nations Framework Convention on Climate Change, UNFCCC), the Sendai Framework for Disaster Risk Reduction (United Nations Office for Disaster Risk Reduction, UNDRR), and the 2030 Agenda for Sustainable Development.
Climate risk management through mitigation
Climate risk management through adaptation
Aligning adaptation and disaster risk reduction through data
Furthermore, many challenges are hindering its implementation. There is a lack of knowledge, inconsistent interpretation of climate risks, restricted expertise in incorporating climate information into risk reduction strategies, and promoting climate adaptation practices. Besides, other concerns include fragmented institutional systems and funding. Nevertheless, it is pivotal to implement integrated planning as otherwise it can exacerbate the climate crisis.
Residual climate risk management
Despite several effective climate policies, the consequences of climate change impacts and the potential loss and damage from these events, still pose a risk. As per IPCC, 2019, residual risk is the risk that remains, following adaptation and risk reduction efforts. To address this residual risk GIZ’s Global Programme on Risk Assessment and Management for Adaptation to Climate Change (Loss and Damage) (GP L&D) has built a climate risk management (CRM) framework to prevent, reduce, and tackle losses and damages. Thus, the idea of CRM consists of the below mutually reinforcing steps, and it is essential that all the relevant stakeholders from various sectors and levels take part in the formulation of the CRM.
Climate risk financing and insurance
In a similar vein, Global Shield against Climate Risks is a G7 initiative that was officially launched at the COP27 climate conference in 2022. This was established along with the Vulnerable Twenty (V20), which is a group of high-risk nations. The aim is for the industrialised nations to provide easy and quick access to support the poor and vulnerable people and establishments from developing countries during climate emergencies. This will cut disaster effects, save lives and livelihoods, protect the resilience of the economies of these countries, and sustain any progress made. Accordingly, the Shield consolidates acts associated with climate risk financing and a proactive approach through preparedness under one roof.
why Is it essential that we focus on Climate Risk Management?
Climate change reverses the progress of SDGs
The IPCC reports highlight that climate change has altered several oceanic ecosystems in addition to affecting flora, fauna and humans. The Special Reports on Global Warming of 1.5°C has particularly emphasized that confining global warming to 1.5°C can possibly save hundreds of millions of humans from becoming re-impoverished.
Concurrent and frequent climate change effects and disasters have varying cascading effects on human health due to recurrent exposure, compounding vulnerability and augmenting overall risk. The damages to possessions and infrastructure can jeopardise livelihoods, access to stable education socioeconomic status, job security, and aggravate poverty. Climate events like heatwaves destroy crop yields alleviating food shortages and worsening hunger.
A THRIVABLE Framework
The THRIVE Framework examines issues and evaluates potential solutions in relation to this overarching goal of thrivability. It is about making predictive analyses using modern technology that supports environmental and social sustainability transformations.