Articles | Volume 15, issue 4
Nat. Hazards Earth Syst. Sci., 15, 895–904, 2015
Nat. Hazards Earth Syst. Sci., 15, 895–904, 2015

Research article 23 Apr 2015

Research article | 23 Apr 2015

Forecast-based financing: an approach for catalyzing humanitarian action based on extreme weather and climate forecasts

E. Coughlan de Perez1,2,3, B. van den Hurk2,4, M. K. van Aalst1,3, B. Jongman1,2, T. Klose5, and P. Suarez1 E. Coughlan de Perez et al.
  • 1Red Cross/Red Crescent Climate Centre, The Hague, the Netherlands
  • 2Institute for Environmental Studies (IVM), VU University, Amsterdam, the Netherlands
  • 3International Research Institute for Climate and Society, Earth Institute, Columbia University, Palisades, NY 10964-1000, USA
  • 4Royal Netherlands Meteorological Institute, De Bilt, the Netherlands
  • 5German Red Cross, Berlin, Germany

Abstract. Disaster risk reduction efforts traditionally focus on long-term preventative measures or post-disaster response. Outside of these, there are many short-term actions, such as evacuation, that can be implemented in the period of time between a warning and a potential disaster to reduce the risk of impacts. However, this precious window of opportunity is regularly overlooked in the case of climate and weather forecasts, which can indicate heightened risk of disaster but are rarely used to initiate preventative action. Barriers range from the protracted debate over the best strategy for intervention to the inherent uncomfortableness on the part of donors to invest in a situation that will likely arise but is not certain. In general, it is unclear what levels of forecast probability and magnitude are "worth" reacting to. Here, we propose a novel forecast-based financing system to automatically trigger action based on climate forecasts or observations. The system matches threshold forecast probabilities with appropriate actions, disburses required funding when threshold forecasts are issued, and develops standard operating procedures that contain the mandate to act when these threshold forecasts are issued. We detail the methods that can be used to establish such a system, and provide illustrations from several pilot cases. Ultimately, such a system can be scaled up in disaster-prone areas worldwide to improve effectiveness at reducing the risk of disaster.

Short summary
How can we use weather or climate forecasts to avoid disasters? This article offers a framework for determining when it is "worth" taking action to try to avoid a potential disaster. Considering forecast probabilities, actions, and funding constraints, we propose a novel forecast-based financing system that would automatically trigger action based on forecasts of increased risks.
Final-revised paper