Disasters will be less devastating if we plan for them

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Gareth Byatt, Risk & Resilience, Independent Consultant, Ilan Kelman, Professor of Disasters and Health, UCL

• The continuing impact of disasters can be mitigated by careful planning and financing.
• Six factors are in play when successfully minimizing disaster-related risks.
• Investment must shift from post-disaster clean-ups to prevention.

In July 2023, a report by the UN agency responsible for disaster risk reduction, UNDRR, emphasized that disaster risks create many negative effects around the world and are undermining sustainable development. Why do disasters keep exacting such a heavy toll on lives and livelihoods, in the world’s largest nations and its small islands, with the poor and the most vulnerable continually being hit the hardest?

Are we resigned to being bystanders as disasters occur, and to keep paying for recovery which often takes longer than it should? Or can we act in unity to stop as many disasters as possible from happening? As we have described recently elsewhere, we have found evidence that disasters can be avoided, and that six principles/factors are typically present when this happens: the right mindset; the right investment/funding; good governance; good data; meaningful inclusion; and meaningful targets. Get these six factors right and everyone benefits.

We minimize flooding hazards with the right mindset towards environmental design. We minimize the impact of earthquakes through good governance enforcing planning and building codes. We implement good heat action plans in cities when we have good data to work with. We minimize wildfire hazards through meaningful inclusion of people working together to stop igniting them. We minimize the burning and clearing of forests and other habitats when we rethink economic principles and set meaningful targets to value natural ecosystems and support good livelihoods for people. The right investment/funding is key to it all.

Show us the benefits

According to UNDRR, only a small amount of funding goes towards disaster prevention. Can the ratio of funding prevention to funding post-disaster clean-ups change? Can we shift the human tendency of waiting until something bad happens before taking action, to one that invests in disaster avoidance, and ties these investments to clear benefits? Do we need to make better cases for investing in disaster prevention, focusing on impactful investment, rather than asking for funding?

We need to make use of evidence to demonstrate meaningful social, environmental and economic benefits to decision-makers and investment fund-holders. If we can’t articulate these, we shouldn’t be asking for investment and funds. The benefits we define need to be agreed through a participatory and inclusive approach; good governance is critical to achieving meaningful targets to work towards. Projects need to be connected together, not siloed. 

Fact- and science-based investment and funding cases to avoid disasters require good data from trusted and reliable sources. Good data is available, but it isn’t always shared for fear of commercial interests being compromised. We need to work out how to share data openly while respecting commercial interests.

Data-gathering includes reviewing the past: Why previous disasters have happened and to consider alternative scenarios of how they might have occurred, and also to understand the “hidden part of history”; the near-misses that we luckily escaped from. 

Armed with good data, we can engage with everyone – communities, businesses, CSOs, NGOs and others – to agree solutions and targets that can deliver meaningful benefits, with good governance and oversight that holds people to account against agreed targets. 

Show us the money

If we demonstrate compelling benefits to investing in disaster prevention, who is best placed to make the needed investments? Development finance is of course important. Private sector finance could be, too. The capital and liquidity of the world’s finance markets is largely untapped for investing to avoid disasters. UNDRR convenes an Investor Advisory Board, comprising influential investors who are committed to help the capital market support disaster resilience. But can more be done?

Fresh economic and investment thinking could generate social, environmental and economic returns for private sector organizations investing in such initiatives. With the right mindset, short-term profitability and cost minimization can be aligned to societal and economic sustainability that generate fair investment returns. 

Future-focused economic policy can help. An example of a tool to consider is negative discount rates. Applying a negative discount rate to a future liability means that it is much cheaper to avoid the liability now, such as through avoiding a disaster, than letting it appear in the future, when the disaster prospectively occurs. They can be thought of as the reverse of interest rates. Negative discount rates can, in situations where it is deemed appropriate, demonstrate the value of investments in disaster prevention today to help society in the future. 

Fresh thinking on trade and commerce has a part to play, too. We can stop forest and land burning if we change the economics of land value and find better solutions for livelihoods and agriculture. If vulnerable land can be valued for the benefits it provides in undisturbed form, local communities would reap meaningful rewards. The same is true for protecting the ocean.

The insurance industry has a part to play in avoiding disasters. Rather than it being asked to pay for the clean-up every time, a new mindset is required. Through finding solutions that encourage preventative action, claims and reinsurance costs can be reduced.

DISCOVER

How has the World Economic Forum helped initiate a more effective response to natural disasters and humanitarian crises?

In our research into avoiding disasters, we keep seeing that success comes when a broad cross-section of people shares a common mindset to find a way. Sound economic and investment principles can support this progressive stance, where everyone cares for everyone, and we are better positioned to avoid disasters and put a stop to suffering.